Europe Merkel denies French Finance Minister's claims of imminent Greek bailout The Telegraph reports that German Chancellor Angela Merkel has denied claims by other EU politicians that Germany has agreed to a bailout package for Greece. Reports over the weekend have speculated that Paris and Berlin are finalising a package that would see German government-owned bank KfW and French government-owned bank Caisse des Depots purchase around half a €30bn bond issue, with the other half going to private Euro debt investors. However, speaking to ARD Television, Merkel said, "That is definitely not the case. We've got a treaty that does not include any provision for bailing out states. We can best help Greece by making clear that Greece has to do its own homework, just like it is doing at the moment." She added, "There have been absolutely no other decisions taken. I would like to say that quite clearly." In an interview with Europe 1 radio, Christine Lagarde, France's Finance Minister, said, "Greece won't be allowed to sink on the condition it respects its commitments to stabilise its budget." She confirmed that the different rescue options being discussed included "private partnerships, public partnerships, or in some cases both". The WSJ notes that Greek officials have said they expect to seal a deal on the bailout package by Friday. The Telegraph notes that both the Free Democrats and Bavarian Christian Social Union (CSU) in Merkel's coalition have raised doubts over use of KfW for a Greek rescue, viewing any diversion of funds as an abuse of its core role as banker for small family firms. The Bundestag's Finance Committee has also questioned whether it is legal for German state bodies to buy eurozone debt.The Spiegel quotes Professor Paul Kirchhof, a leading German jurist, arguing that bail-out plans are in breach of Germany's constitution, and may trigger court challenges. He said, "I cannot accept that the European administration could agree to break current law." However, the WSJreports that the use of state-owned financial institutions might enable the German and French governments to get around the EU rules that prohibit governments from owning the debt of other member states. Meanwhile, the Observer notes that EU Economic Affairs Commissioner Olli Rehn has flown into Athens to put more pressure on the Greek government to take further steps to cut its debt. Jean-Claude Juncker, President of the Eurogroup of eurozone finance ministers, told Greek newspaperEleftherotypia at the weekend that Greece must not only "take additional actions...[but] must understand that the taxpayer in Germany, Belgium or Luxembourg isn't prepared to correct the mistakes of Greek fiscal policy". The WSJ notes that Juncker, European Central Bank President Jean-Claude Trichet and French President Nicolas Sarkozy have reiterated that turning to the IMF would undermine the credibility of the euro. German Chancellor Angela Merkel is reportedly more open to a deeper IMF role. It notes that the IMF-EU relationship is further complicated by the French Presidential election in 2012. IMF Managing Director Dominique Strauss-Kahn, who is polling higher than Mr. Sarkozy, has said he is considering a run and a big role for the IMF in helping resolve the Greek crisis could help any presidential bid. Business Week notes that billionaire investor George Soros has said that the euro "may not survive" the Greek deficit crisis. A poll for Swedish Television shows that 50% of Swedes are now against the country joining the eurozone. 39% are in favour of joining the euro, while 11% are undecided. When the same question was asked in April 2009, 47% were in favour of the euro, while 45% were against. Meanwhile, Business Secretary Lord Mandelson has reiterated that he thinks the UK will join the euro. He said, "Don't ask me when. It's not going to be soon, but we will do it," according to Saturday's Mail. Le Figaro Telegraph BBC: Hewitt blog Asiaone iMarket News Bloomberg Times WSJ WSJ 2 IHTWeekend FT Mail Mail: Brummer Mail Handelsblatt 2 Irish Independent Guardian El Economista Le Figaro 2 Le Monde City AM EUobserver FT FTD FTD 2 FOCUS Spiegel Bild FTD 3 Bild 2 Die Welt El Pais El Pais 2 FT 2 FT: Munchau FAZ Sunday Telegraph Observer Swedish Television Jean-Claude Juncker: EU has "torture instruments in the cellar" to punish euro speculators Speaking about the added pressure on Greece caused by financial investors betting on a default, Juncker told Handelsblatt that the EU has "torture instruments in the cellar" and is prepared to use them as sanctions against hedge funds and other investors speculating against the euro. He added, "Politics can only be blackmailed to the extent to which it will allow itself to be blackmailed. We have to strengthen the primacy of politics. It must be able to stop the financial markets." The leader of the CSU in the European Parliament, Markus Ferber MEP, has also demanded strict regulations for those speculating against the euro. "Ultimately, one should take away the operating licence of banks who participate in that," he said. European Parliament criticised for handing out cash in envelopes while MEPs vote for increased allowances Saturday's Express looked at the European Parliament's expenditure, noting that last year more than £70,000 was spent on ski holidays for families of Parliament officials and that hundreds of pounds has been handed out in brown envelopes to visitors to cover food and travel with no receipts needed. Open Europe Director Mats Persson was quoted saying: "The European Parliament already has a terrible reputation for wasting taxpayers' money. Now we hear that citizens' cash is being handed over, ready-packaged, in brown envelopes without a second thought." Meanwhile, the NOTW reported that MEPs have awarded themselves £12 million in extra allowances including an additional £1,300 a month each to pay staff plus cash to hire another 150 aides to cope with the increased workload created by the Lisbon Treaty. The increase will come on top of the £15,447-a-month they get to pay assistants, a "general allowance" worth over £44,000 a year, and a £265-a-day "subsistence allowance" when they are at Parliament. Mats was quoted saying, "The last thing taxpayers want to hear is that Euro-MPs are getting even more money." Open Europe is also quoted by Spanish newssite InterEconomia. NOTW Express Express: Leader InterEconomia EU spends millions on dubious culture projects The Sunday Express reported that the European Commission is spending millions of euros of taxpayers' money on "meaningless" cultural projects. The European Joysticks Orchestra has been handed more than £50,872 to compose works, host concerts and train teachers in the "art" of creating music using the computer device. The European Laboratory for Hip Hop Dance will net £44,931 of taxpayers' cash to "improve the recognition and visibility of hip hop dance in Europe" and "encourage connectivity between hip hop artists". The article notes that more than £15.5 million has been spent on similar projects. Open Europe's Stephen Booth is quoted saying, "Despite the worst recession for generations, the unaccountable EU institutions continue to fritter away money in a completely nonsensical manner." French-German strategy paper sets out eurozone 'economic government'; EU 2020 Strategy will force member states to present annual economic plan to EU Der Spiegel looks at the plans for a eurozone 'economic government', outlined in a German-French strategy paper, prepared by Finance Ministers of both countries. According to the plans, the European Council and the European Commission would have the mandate to monitor the competitiveness of countries more intensely "in order to keep the eurozone together". The supervision would also be extended to countries such as Denmark and the Baltic countries which have linked their currencies to the euro. Member states would receive warnings from the Commission "when their economic policies threaten the functioning of the monetary union" and the European Commission would be allowed to intervene much earlier than currently is allowed. The proposals will be discussed at the next meeting of eurozone finance ministers. Meanwhile, the EU's economic development plan, Strategy 2020, will be announced this Wednesday, reports the Dutch press. Het Financieele Dagblad predicts that the package will introduce new requirements on member states to present an annual economic plan to the EU, separate from the annual budget plan that they already submit. Member states will be set goals and receive warnings for non-compliance. According to the article, Commission President Barroso also wants to link the new EU 2020 strategy to the Stability and Growth Pact. La Razon notes that the two main goals of the plan will be the creation of 5.6 million new jobs and the achievement of 2% yearly GDP growth by 2020. Spiegel Het Financieele Dagblad La Razon Germany warns of excessive UK influence in EU diplomatic service The Guardian reports on a leaked diplomatic note from Germany, attacking UK attempts to dominate the EU's fledgling External Action Service (EEAS) and EU foreign policy under EU Foreign Minister Catherine Ashton. The note concludes, "Excessive GB participation [in the EEAS] is evident. Over-proportionate GB influence on the establishment [of the EEAS] and staffing is to be avoided." German and French unnamed sources are complaining that four of the 12 staff appointed to Baroness Ashton's office are British. British officials are also heading several key departments including the EU's intelligence cell, its military staff, and overseeing recruitment to what are to be more than 130 EU embassies abroad, as well as providing Robert Cooper as the EU's top foreign and security policy strategist. European Voice reports that Ashton appointed Poul Skytte Christoffersen, Denmark's Ambassador to the EU, as her special advisor on Friday. The Sunday Telegraph reported that a widely held belief in Brussels is that Lady Ashton has become the "fall guy" in bureaucratic warfare unleashed by the Lisbon Treaty. It quoted one French official saying, "We have fought tooth and nail for nine years to get the Lisbon Treaty, or some form of EU Constitution. Can this really be what it is about?" Government report: EU subsidised biomass fuel could be worse for the environment than fossil fuels The Times reports that according to a new Government report, government biofuel targets could actually be less environmentally friendly than using fossil fuels, as they require millions of acres of forest to be cleared for plantations. The report also notes that some of the most commonly-used biofuel crops fail to meet the minimum sustainability standard set by the European Commission. The Times continue to note that: "The EC has conducted its own research, but is refusing to publish the results. A leaked internal memo from the EC's agriculture directorate reveals its concern that Europe's entire biofuels industry, which receives almost £3 billion a year in subsidies, would be jeopardised if indirect changes in land use were included in sustainability standards". Times EurActiv France Open Europe Research Van Rompuy accused by governments of 'power grab' The Telegraph reports that national governments are worried over signs that Herman Van Rompuy is looking to expand his position. The EU President's candidature was reportedly backed by Germany and France on the proviso he would play the role of an EU 'chairman' rather than a high profile political figure. However, diplomats in Brussels are increasingly agitated over an apparent "mission creep", such as that exposed in a recent letter sent to EU leaders, outlining his intent to usurp national governments at G20 summits, "allowing me to effectively and forcefully represent the EU's positions in this important forum." According to the FT Brussels Blog Van Rompuy has also let on that he believes the eurozone should have a single representation at the IMF. Telegraph FT: Brussels blog Van Rompuy speech German MEP warns that Olaf appointment of director breaches EU law German daily the Spiegel reports that MEP Inge Gräßle has pushed for an examination of anti-corruption law within the EU, following the appointment of an interim director of the EU's anti-corruption department, the Olaf, without the approval of the European Parliament. According to EU law, the post has to be filled by somebody agreed on by the European Commission, Council and Parliament, yet the appointment was made solely by the Commission and the interim manager may be in the post for over a year. Saturday's Spiegel reported that the new Justice Commissioner Viviane Reding has announced that the data retention directive needs to be "put on the stand" before the German Constitutional Court decides on it this Tuesday. She said one had to find "the right balance" between the fight against terrorism and the protection of the private sphere, and asked "Do we really need all this data?", perhaps "less intrusive measures could be taken to achieve the same goal". This week Michel Barnier will make his first visit to London as Commissioner for internal market and financial services to discuss key issues. City AM note that: "The Commissioner's appointment spooked the City back in December as the French President, Nicolas Sarkozy, used it as a platform to crack down on bonuses, tax havens and the excesses of financial capitalism". City AM Le Monde Sunday Telegraph Iceland attempts to find a last-minute solution to 'IceSave' debt stalemate ahead of a potentially destabilising referendum on how to repay the £3.5 billion owed to the UK and Netherlands. Times Telegraph: Hannan blog FT In an opinion piece in the Guardian, Mary Kaldor remarks that the EU is "besieged by regulation culture and market obsession, forgetting its original purpose: peace", she continues, "The political reforms in the Lisbon treaty were supposed to help Europe to act in a more united way - instead, as has become painfully obvious, it has proliferated ineffective voices. We now have a president of the council, a Spanish presidency, a foreign minister, a president of the commission, not to mention Chancellor Merkel and President Sarkozy." Cinco Dias report that the EU has suggested that internet piracy laws could be disproportionate and could conflict with various existing Community Directives. Dimitri Medvedev will go to France, and discuss Russia's membership to the WTO and Medvedev's proposal for a new European Security Pact. UK A YouGov poll for the Sunday Times puts the Conservatives on 37%, as against 35% for Labour -- the closest gap between the parties in more than two years. The Lib-Dems are at 17%.
Monday, 1 March 2010
It quotes another European diplomat saying, "The French, Spanish, Barroso, Van Rompuy, everybody it seems, can pull a fast one and Ashton does not have the authority to stand up to them. The argument that she might be boring but has powers of quiet persuasion simply do not wash any more. If this is the best Britain can offer then your country is in deep trouble."
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