Europe
EU split on response to financial crisis
The EU Commission yesterday put forward new legislative proposals to deal with the financial crisis. Meanwhile, Paris is considering a 300bn euro EU fund to bail out banks when an individual country cannot cope. Christine Lagarde, French Finance Minister, in an interview with Newsnight suggested that Europe needed better co-ordination and sharing of information between member states in the wake of the financial crisis.
The WSJ and FT report that Germany and Britain have dismissed France's plans, while Ireland's new bank guarantees drew criticism from other European officials, putting the EU increasingly at odds with itself as its governments struggle to ensure the soundness of their banking systems. In an interview with the WSJ, German Finance Minister, Peer Steinbrück, said the crisis was US-centered and suggested European governments would be overreacting if they were to pursue coordinated plans for bank bailouts. "To put it mildly, Germany is highly cautious about such grand designs for Europe," he said. "Other countries are free to think about it. I just don't see any German interest in it."
Berlin does not wish to see a Europe-wide financial regulator, though it supports a package of EU-wide banking regulations proposed yesterday. The EU Commission's proposals include plans to force banks to tie up more capital to cover risky operations, and to limit how much they can lend to one party. Banks that sell securitised products or repackaged debt will have to share the risk with buyers. To achieve this, the bank will retain a stake of at least 5% in the products.
President Barroso also called for "a further strengthening of the supervision structures at the European level". Barroso said he was working with French President Nicolas Sarkozy, and the European Central Bank to present proposals to leaders of the big four European powers at a meeting set for this Saturday.
The Commission has also proposed that the EU would follow other parts of the world, such as the United States, in changing rules on fair-value accounting. A requirement that companies regularly restate the value of assets on their balance sheet to reflect changed market prices has been widely blamed for exacerbating the credit crisis. In addition, EU finance ministers are to adopt common principles on "golden parachutes", according to Le Figaro. They are set to review the rules on rates of pay in the financial sector, considered to be too focussed on the short term, later in the year.
Ambrose Evans Pritchard notes in the Telegraph "As events now unfold with vertiginous speed, we may find that it destroys the European Union... After years of acquiescence, the markets have started to ask whether the euro zone has the machinery to launch a Paulson-style rescue in a fast-moving crisis... We are fast approaching the moment when events decide whether Europe will bind together to save monetary union, or fracture into angry camps. Will the Teutons bail out Club Med? If not, check those serial numbers on your euro notes for the country of issue. It may start to matter."
Le Figaro EU Observer Euractiv WSJ IHT IHT-Barroso BBC Reuters Telegraph Evans Pritchard EUobserver AFP AFP2 Beursduivel Telegraph Telegraph 2 Times FT BBC-Mardell Bloomberg Reuters Irish Independent European Voice FT Irish Times Guardian Independent Irish Times Guardian Le Figaro Economist
Sarkozy wants to make the Irish revote in 2009;
Dehaene says Irish parliament should ratify Lisbon Treaty
The Irish Prime Minister, Brian Cowen, was received by Nicolas Sarkozy on Wednesday to discuss the Irish position on the Lisbon Treaty. Le Figaro reports that Sarkozy revealed his aim of postponing the introduction of the Treaty by a year. As a result, it would come into force at the end of 2009 or on 1 January 2010. Le Figaro states: "In light of this, the President of the European Council considers that the Irish - 53.4% whom voted 'No' in June - should go to the polls once again in autumn 2009."
The Independent reports that EU Commissioner Vivian Redding claims that if Ireland does not hold a second referendum on the Lisbon Treaty small countries "could lose" their EU Commissioner.
Meanwhile, De Standaard reports that yesterday, at a conference of the European Policy Center, Jean-Luc Dehaene, former Belgian Prime Minister, declared that the Irish government should simply ratify the Lisbon Treaty without a referendum before the EU elections, as the legal ground on which Ireland has to hold a referendum is disputable. Dehaene is quoted as saying: "whoever thinks that a vote in parliament is less democratic then a referendum has a lifelong problem with democracy". By proposing this, Dehaene aims to prevent the EU elections turning into a referendum on the Lisbon Treaty which could lead to shifting party loyalties.
Le Figaro Independent De Standaard
Shadow Europe Minister: Conservatives "absolutely committed" to forming a new group in European Parliament
At an Open Europe fringe event at the Conservative Party conference, Shadow Minister for Europe Mark Francois yesterday reiterated the Party's intention to withdraw from the European People's Party (EPP) in the European Parliament. He said that the Conservatives are "absolutely committed to form a new grouping", after the elections for the European Parliament in June next year. Echoing William Hague's remarks from earlier in the day, Francois restated the Party's ambition to hold a referendum on the Lisbon Treaty, if the Treaty has not come in to force by the time the Conservatives take office. Francois added that in the event that the Treaty has been ratified by that time, the Party would consider the Treaty to lack the "democratic consent" of the British people and would engage in some "difficult discussions with EU partners" over the document's validity in the UK. However, Francois said it was too early to say exactly what policy the Conservatives would pursue in such a scenario, not least since it could weaken the negotiation position in future negotiations with EU partners.
No link
Cameron tells Conservative MEPs: sign our code of conduct or don't stand
David Cameron said in his speech to Conservative Conference yesterday, "We've drawn up a hard-hitting code of conduct for our MEPs. With European elections next year, the message to them is simple: If you don't sign, you won't stand."
He added, "And while we're on this subject, there's one other thing that destroys trust in politics. And that's parties putting things in their manifesto and then doing the complete opposite. Next year in those European elections we will campaign with all our energy for that referendum on the European constitution that Labour promised but never delivered."
Green Party MEPs top in transparency league
The Cumbria News and Star quotes Peter Cranie, an MEP candidate for the Green Party in the North West, as saying "Open Europe recently conducted a survey on parliamentary transparency on expenses and pay. The Green Party scored highest, with 100 per cent for transparency."
France receives informal backing for EU helicopter pool
EUobserver reports that at an informal EU defence ministers meeting in Deauville yesterday, France obtained the backing of several member states for a trust fund to upgrade Europe's helicopter fleet to make up for shortfalls in helicopters and transport aircraft needed for EU deployments abroad. The idea is being pushed forward by the French EU Presidency, which hopes to see several concrete initiatives adopted on November 10 at a formal meeting of EU defence ministers.
ECB liquidity injections not working
Banks are re-depositing some of the money injected by the ECB back with the ECB itself - over 100bn euros overnight as of Tuesday, 30 September - as they are worried that the central bank is the last safe place left to stash their cash. An official with the ECB told the EUobserver that "never before" had this happened.
The euro has plunged against the dollar in anticipation of a big drop in ECB rates, reports Le Figaro.
EU to spend millions on 'educational' media campaigns
FAZ reports on the intention of the EU to pay for more EU coverage on radio and TV. It is reported that these measures are not new. For 4 years it has paid for educational programs for journalists, spending 6.4 million euros of taxpayers' money. In addition, it aims to spend 9 million on the "Europe by satellite" program, aiming to provide journalists with images, and 10.7 million euros for "Euronews".
Tim Jenkins from Friends of the Earth writes on the Guardian's Comment is Free site, arguing that the EU Emissions Trading Scheme is "riddled with so many loopholes that, so far, the potential for big cuts in emissions has been lost".
Tension as EU monitors enter Georgia.
EU defense ministers support Bosnia withdrawal.
Polish senator attacks Lisbon Treaty over shipyard row
Polish senator Krzysztof Zaremba has said Poland should not ratify the Lisbon treaty if Brussels forces it to close down shipyards, amid allegations of anti-Polish French and German lobbying.
UK
Britons transfer savings to Irish banks following Irish government's state guarantee
Large numbers of Britons are transferring their savings from British to Irish banks following the Irish government's announcement of a 100 percent guarantee on all savings in the country's six banks. Northern Rock, which neared collapse only a year ago, has also benefited with investors rushing back, safe in the knowledge it has been nationalised. According to the Irish Times, the EU Competition Commissioner has launched a 'thinly veiled attack' on the Irish rescue plan.
Meanwhile, experts last night called for Gordon Brown to make a similar pledge, saying the proposed increase in the guarantee on British accounts from £35,000 to £50,000 was inadequate.
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