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Germany stands firm on joint IMF-EU bailout "as a last resort" ahead of summit;
German calls for Treaty change could lead to EU "economic governance"
The BBC reports that German Chancellor Angela Merkel has told the German Parliament, ahead of the EU leaders' summit tonight, that she will insist that the IMF is involved in any potential bailout of Greece, saying: "The German government will press for emergency aid combining IMF and joint bilateral aid from the eurozone but I say again, only as a last resort". Italian Economy Minister Giulio Tremonti also said that Italy's preferred option for aid to Greece would be a combination of EU and IMF support.
Greece is not formally on the agenda of tonight's summit but European Commission President Jose Manuel Barroso said it would be difficult to avoid the subject, telling the European Parliament: "What is at stake is the essential principle of financial stability that is at the centre of the euro, and the euro is the most important creation of the European project".
Handelsblatt quotes Merkel telling the Bundestag: "I will stand up for necessary [EU] treaty alterations so that we can fight against undesirable developments better." The Telegraph reports that any German participation in a Greek bailout would come in exchange for new Treaty powers of economic enforcement for Brussels. It quotes one senior diplomat saying, "Stronger economic governance will have medium-term implications for everyone, including Britain. There is a German argument about the need for treaty change, no one else wants it".
The BBC Today programme reports that French and Spanish calls for a eurozone summit ahead of the leaders' summit are unlikely to result in a meeting, with Germany unwilling to meet unless an agreement is assured, and Dutch PM Jan Peter Balkenende telling the Dutch parliament that a meeting was "too risky," according to Reuters.
Lorenzo Bini Smaghi, an Executive Board member of the ECB, has criticised Germany's stance towards an IMF bailout of Greece in an interview with Die Zeit saying, "If the IMF steps in, the image of the euro would be that of a currency that is able to survive only with the external support of an international organisation."
De Standaard quotes Erik Nielsen of Goldman Sachs saying that Greece would get €20 billion if it went to the IMF. El Pais reports that Spain's PM Jose Luis Zapatero has said that Spain is willing to contribute its share to any financial mechanism which was agreed for Greece. The article notes that Spain's contribution would be around nine percent, or about €2-3 billion.
The Times quotes former Belgian PM Guy Verhoftstadt warning that the debate in Germany over Greece is "polluting the atmosphere and creating anti-European feeling," adding: "In the space of a few weeks we are destroying all our efforts to bring Europe closer together."
Writing in the FT Paris correspondent Ben Hall argues, "Concern about Berlin's self-interest has spread well beyond Paris to other capitals, particularly since the Greek debt crisis began. But it is France that is fretting the most, because for half a century it has used its special relationship with Germany to multiply its own influence in Europe and beyond. That is no longer the case. German selfishness exposes French selfishness."
Meanwhile, the euro fell to a ten-month low against the dollar yesterday amid uncertainties on aid for Greece and as credit rating agency Fitch downgraded Portugal's credit rating to AA- from AA.
FT: Hall BBC: Today Times FT FT: Leader FT: Marsh Telegraph Irish Times: Beesley FT 2 FT 3 Irish Times EUobserver Economist: Charlemagne notebook BBC BBC 2 European Voice Süddeutsche Zeitung Die Welt Handelsblatt Le Monde Le Monde 2 Le Figaro Le Figaro 2 WSJ Independent City AM IHT IHT 2 Reuters Times 2 FT 4 FT 5 Telegraph Irish Times EUobserver Spiegel El Pais Cinco Dias La Razon Welt Handelsblatt El Pais 1 El Pais 2 Standaard La Stampa ANSA Reuters Italia El Pais 3 Bild Zeit Reuters 2 Reuters 3 FT Deutschland Frankfurter Allgemeine Zeitung Nouvel Obs Volkskrant
Budget sees UK's EU contribution rise to £6.4 billion
The Telegraph reports that figures published in yesterday's UK budget show that the UK's contributions to the EU have increased from last year's estimates. Last year's budget estimated the UK's contributions at £5.6billion for this year, but that has been increased to £6.4 billion this year and will rise to an estimated £7.6 billion in 2010/11. The £6.4 billion cost this year is more than twice the £3.1billion contributed last year.
The article quotes Open Europe Director Mats Persson saying, "It's extraordinary that when virtually every single government in Europe is forced to cut its public expenditure the EU sees fit to increase its own." The increase follows Tony Blair's agreement to a reduction in Britain's annual rebate in 2005, in exchange for a 'health check' of the Common Agricultural Policy.
UK opt-out from EU's 48-hour week could be under threat as Commission reopens Working Time Directive
The Mail reports that the Government has vowed to fight any new attempt to scrap Britain's opt-out from Europe's maximum 48-hour working week contained in the Working Time Directive (WTD). The European Commission has launched a new review of working time rules, almost a year after MEPs tried to abolish the opt-out when the WTD last came up for renegotiation.
The Commission is not necessarily targeting the opt-out, but MEPs voted in December 2008 by 421-273 to scrap it - after EU governments had already agreed to keep it. The subsequent legal 'conciliation' between MEPs and governments failed to settle the issue, and the opt-out was saved on that occasion by default.
The Commission and member states want to amend the WTD in order to resolve issues surrounding how on-call time is classes as working time, following various rulings by the European Court of Justice. However, changing the Directive leaves MEPs with the opportunity to make amendments aimed at scrapping the UK's opt-out from the 48-hour week.
Sarkozy vows to block EU agriculture reform
The Telegraph reports that French President Nicolas Sarkozy has threatened a new political war over plans, led by Britain, to cut EU farm subsidies, the large majority of which go to French farmers. "I am ready to head into a crisis in Europe sooner than accept that the Common Agricultural Policy be dismantled," he said. "I will not let our farms die."
In a letter to the Telegraph, Ronald Stewart-Brown of the Trade Policy Research Centre argues that, rather than leaving the EU, an alternative to full EU membership could be a "bilateral customs union agreement with the EU. It would preserve free movement of goods, albeit at the cost of staying in the EU tariff band for most merchandise trade, and could attract the happy label: 'Staying in Europe for trade'."
In an article on EurActiv about the EU's Capital of Culture project, Open Europe's research on EU communication policy is cited, and former Director Lorraine Mullally is quoted arguing that "taxpayers should not be footing the bill for vain PR exercises to make us love the European Union."
Cathy Ashton gets support for 'blueprint' on new EEAS
EU Foreign Minister Cathy Ashton's 'blueprint' for the new European External Action Service (EAS) was finalised yesterday after an agreement was struck with the European Commission. Contentions over who would be in charge of development policy, and the development budget, have been decided in a compromise, with the EAS involved in three of the five steps of the planning cycle for development, while the Commission is in charge of two.
EUobserver notes that Cathy Ashton's hopes that agreement with MEPs and member states would be reached by the end of the month are unlikely. Potential clashes over staffing regulations may now see it delayed to summer or early autumn.
Irish Times EUobserver European Voice EurActiv Le Monde
Justice Commissioner hints at EU system to track bank transactions
The IHT reports that the European Commission said yesterday that it wanted to develop its own system to track terrorist finances and that such a system would require the United States to contribute information on American citizens' financial transactions. Last month, the European Parliament blocked a provisional deal, the so-called SWIFT agreement, between the EU and Washington to permit the continued US use of EU citizens' data, over privacy fears.
EU Justice Commissioner Viviane Reding said that any future agreement on financial data "would explicitly provide US reciprocity should the EU set up its own terrorist-finance tracking program." A pledge from the Americans to support a European system would provide "confidence in a new round of negotiations with our US partners," she added.
European Voice reports that several MEPs have accused the Commission of a lack of transparency, saying they are still waiting for answers about biofuels and their impact on land use two months after the deadline for a Commission response.
An editorial in the WSJ looks at the EU's emissions trading scheme for carbon and argues that it is "a cautionary tale in how quickly environmental policy engineering degrades into rent-seeking for the fortunate few."
The WSJ reports that the Commission is moving to propose legislation this year that will push most derivatives trading through clearing houses, and it wants to create an EU-wide market for clearing as part of that legislation.
Süddeutsche Zeitung reports that the Nabucco pipeline, which will bring gas from the Caspian to central Europe, will not be ready before 2018, according to Günther Oettinger, the European Energy Commissioner.
The Irish Independent reports that the EU has told Bank of Ireland that it will need to agree to the sale of assets in Britain in order to receive approval of its state-aid restructuring plan.
Poland's Prime Minister Donald Tusk told EUobserver that the EU's 2020 growth strategy is at risk of losing Polish support, arguing that the strategy should use existing EU instruments such as cohesion funds, rather than targets on research and development, and green investment.
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