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Tomas Valasek of the Centre for European Reform has written an excellent and gloomy analysis of the wider damage caused by David Cameron's botched negotiations. One point is that Britain's likely absence from European economic decision-making will tilt the balance towards French etatism. Another is that small countries will be eezed by big ones when decisions are made on an intergovernmental basis, rather than through EU institutions. Many from the EU-10 think that they are not welcome (at least from a French point of view) in the real core of Europe.

"My view is a little bit more cynical," said Philip Whyte, a senior fellow at the CER. "What does the deal really mean? It means tighter policy coordination and the application of fiscal rules throughout the eurozone.

Charles Grant of the CER, suggests that France and Germany may decide to pursue deeper fiscal integration in the eurozone via a new treaty that would include current members and aspiring "pre-ins". "Although Europe is facing this new division between the euro countries and the non-euro countries, which is important, a large number of the central European countries should be on the integration side of that division ... But those countries will have to accept the Germanic view of the world in terms of fiscal discipline and austerity."...

"Fiscal austerity in the eurozone has now become part of the crisis rather than a solution to it," says economist Simon Tilford. The debt burden of troubled eurozone countries is growing faster than their economies. "So this is the absolute worst of all worlds: fiscal austerity, contracting economies and a dramatic increase in the burden of the debt relative to the size of the economy ...

As Simon Tilford, from the CER, pointed out, with debt brakes being written into national constitutions, austerity is being "hard-wired" into the framework of the EU.

"Cameron hat mit Kanonen auf Spatzen geschossen. Er hat die anderen verärgert, ohne für Großbritannien etwas zu gewinnen", urteilt Simon Tilford, Chefökonom des CER in der britischen Hauptstadt. ...

Katinka Barysch of the CER says "Now that the government talks about new treaties and institutions, it looks more in charge. Politically, the strategy is working: almost two thirds of Germans now approve of Merkel's management of the euro crisis."

Simon Tilford, chief economist at the CER, told me: "I find it very hard to understand why the exercise of this veto is some kind of victory for the City. I don't think that's shared unanimously across the City."

"The agreement hard-wires pro-cyclical fiscal austerity into the institutional framework of the eurozone, with no quid quo pro to move gradually to debt mutualisation." said Simon Tilford from the CER.