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German short-selling ban continues to cause market turmoil;
Barroso and Barnier hint that EU will follow Germany's lead
The Guardian reports that Germany's decision to ban naked short-selling is continuing to cause market turmoil with sharp falls in shares and instability for the euro. Die Welt quotes German Finance Minister Wolfgang Schäuble saying, "I am convinced the markets are really out of control". The WSJ notes that French Finance Minister Christine Lagarde confirmed yesterday that she hadn't been informed before Germany's decision.
City AM reports that European Council President Herman Van Rompuy has said that EU finance ministers will discuss Germany's short-selling ban on Friday as part of a 'Task Force' meeting, which will also look at proposals on how to toughen EU budget rules and improve economic governance. "These measures will be even more efficient if they are coordinated at European level. It is important that member states act together and that we design a European regime," said European Internal Market Commissioner Michel Barnier, according to the WSJ. Il Sole 24 Ore quotes Commission President Jose Manuel Barroso saying, "The Commission has urged the Committee of European Securities Regulators (CESR) to assess as soon as possible whether conditions similar to those which led German authorities to take this decision have arisen elsewhere in Europe".
The Telegraph quotes Hans Redeker, currency chief at BNP Paribas, saying, "As a German citizen, I wish to apologise for the stupidity of my government." He added, "Angela Merkel needs the support of the Left so she has given in to a witch-hunt against banks and speculators." On his FT Brussels blog, Tony Barber argues, "The German announcement underlines how the eurozone's leaders, after finally appearing to get on top of events with the financial stabilisation plan unveiled on May 10, are once again misjudging the dynamics of the crisis."
Writing in the FT, columnist John Gapper looks at the EU's proposed rules on hedge funds and private equity and suggests that, "Having established the principle that the EU can impose hedge fund rules on the UK, what could come next? EU politicians were making noises yesterday about transmuting the German attack on short-selling into pan-European regulation. All this will encourage funds based in London that do not raise much from EU investors to move offshore since, unlike banks that threaten to leave town but rarely do so, hedge funds are mobile."
Telegraph Sun FT FT 2 FT 3 Reuters France 24 IHT Today programme FT: Brussels blog EUobserver European Voice El Pais El Pais 2 FAZ Il Sole 24 Ore Die Presse Die Welt Spiegel Die Welt: Comment WSJ WSJ: Weyer WSJ: Editorial WSJ: Analysis Mail Mail: Brummer Guardian Guardian: Roberts' blog City AM City AM: Heath City AM 2 City AM 3 City AM: Wheeldon Express City AM 4 Independent City AM FT: Gapper
New Europe Minister fails to offer assurances on referendum on future Treaty change
Speaking to the BBC Today programme new UK Europe Minister David Lidington, when asked whether the UK would oppose any proposals from Germany for a Treaty change to strengthen the eurozone, said: "I think we'll look at what the Germans propose, at the moment there've been some initial reports but nothing specific".
When asked whether the UK would have a referendum on such a Treaty, even if it did not directly affect the UK, Mr Lidington said: "the first thing we've got to establish is what it is that the German Chancellor has in mind and the Prime Minister will be discussing that with her tomorrow. I don't think that there's a great appetite, not just in Britain, but in the rest of the European Union for further Treaty change after the very long, drawn out, controversial process of Lisbon, but the position of the coalition Government, both parties in it, is very very clear on this. Which is that, first of all, if there were to be a proposal for a Treaty change, that is something that requires unanimity so the British Government would have the absolute right of veto, and secondly, if the British Government were disposed to go along with a Treaty change we have it written into the coalition agreement that any further Treaty change which involved a transfer of powers or competence to the European level would involve a [referendum]."
When asked if that assurance of a referendum would apply if the Treaty did not directly affect the UK, he said: "we'd have to see what the wording of any hypothetical Treaty would be in order to make that judgement."
German Finance Minister determined to go ahead with financial transaction tax without global agreement or the UK
AFP reports that German Finance Minister Wolfgang Schäuble is pressing for the EU to go ahead with a tax on financial transactions if an agreement on a global tax cannot be reached. He told a German parliamentary committee that "If we can get that through on the global level, then good. That would be ideal. If that does not work, then we must look to the European Union." He added, "And if we have a problem with Britain, then I think we should try it with the eurozone." In an interview with the FT, Schäuble said that it is "very likely" that there would be no agreement at the June G20 summit in Canada and "then the debate will take off again to see if it is possible to do it in Europe."
The frontpage of Handelsblatt reports that German Chanchellor Angela Merkel has made a dramatic U-turn on the introduction of the tax. The article notes that as late as Sunday she was still against but yesterday she said "taxation is needed, whether it is a financial activity tax or a financial transaction tax".
FT: Analysis Business Week D Radio WSJ Business Week 2 AFP 2 AFP Sueddeutsche Handelsblatt Spiegel Business Week D Radio AFP Cost Estimations
EU finance ministers meeting tomorrow to discuss potential Treaty change to strengthen eurozone
The front page of the Times carries the headline 'The Euro is in danger', citing German Chancellor Angela Merkel's words yesterday that the consequences of a failure to deal with the crisis in the eurozone would be "incalculable". Handelsblatt reports that the French are angry at her comments, which have seen the euro slump in market trading today. French Finance Minister Christine Lagarde told RTL Radio: "The euro is a solid and credible currency. I absolutely do not think that the euro is in danger."
The Times reports that European finance ministers will meet tomorrow for more emergency talks on the crisis and are expected to hear calls from Germany for changes to the Lisbon Treaty to give Brussels powers to co-ordinate national budgets. Le Monde reports that recent European Commission's proposals aimed at giving the EU budgetary supervision powers are creating concerns within the French Parliament. The UMP group chief Jean-François Copé has said he's "hostile" to the idea. EurActiv France quotes the President of French Senate Gérard Lacher saying that the proposals are "constitutionally inapplicable".
In an interview with the FT German Finance Minister Wolfgang Schäuble says: "When we introduced the euro in the 1990s, Germany wanted a political union and France did not. That is why we have an economic union without a political union. Political union naturally means a bit of federalism in the German sense of federal. It means that one can no longer take certain decisions on a national level. That is very hard for the UK. It's often not so simple for France, but France finds it easier to take European decisions."
Hans-Werner Sinn, President of the German Economic Institute IFO, has heavily criticised the eurozone bailout package, saying it was "one of the most seriously wrong decisions in the history of the German Federal Republic", reports Handelsblatt.
The Telegraph reports that six members of the FDP in Germany's ruling alliance are to vote against the EU bailout package in tomorrow's vote in the German Parliament, meaning Chancellor Merkel must reach out to Social Democrats and Greens to secure a safe majority. Bloomberg reports that German FDP MP Frank Schäffler has said he'll quit as the party's deputy spokesman on the Parliament's Finance Committee over the government's support for the bailout package.
An analysis piece in FAZ suggests that, as a result of the crisis, the EU runs the risk of losing the trust of its citizens, adding: "the politically crucial question in the next months is whether this trust will survive the crisis." The article argues that the change in the mood of populations would have serious implications for the cohesion of the EU: "It would mean that in the future we will not speak of deepening, but rather of deconstructing the union."
Mail Irish Times Times Times 2 Times 3 Times 4 Reuters FT AFP Irish Independent Handelsblatt European Voice FT: Analysis EUobserver BBC Guardian WSJ FAZ Independent Le Figaro Il Sole 24 Ore AFP Handelsblatt Bloomberg EurActiv France
Eurozone comment round-up
A leader in the Times under the headline, "Will the Euro survive?", argues: "A threat to the euro is not a threat to Europe, after all. EU members should not confuse defence of the euro with the interests of a successful union of 27 countries with shared values and trade."
Writing in the New Statesman, Newsnight's Economics Editor, Paul Mason, looks at the eurozone crisis and argues "The eurozone has staved off crisis by ripping up its rules, defying its own ideology on the promise of a future consolidation into a fiscal superstate. Yet the path to that superstate cannot lie through electoral consent; it never has, not even in the good times."
A leader in the Spectator argues: "The momentum of Europe's sovereign-debt crisis is driving in one direction: towards a break-up of the euro. If that happens, it is more likely to begin with Germany withdrawing from the single currency than with the Greeks being evicted."
Times: Leader Times: Maddox Times: Emmott New Statesman: Mason Spectator: Leader Guardian: Garton Ash
Conservative MEP says there is "no chance" of rejoining EPP
The Parliament reports that Conservative MEP Struan Stevenson has said there is "no chance" of Conservative MEPs rejoining the EPP grouping in the European Parliament. The article quotes Open Europe Director Mats Persson saying, "We encourage the new UK government to push for genuine EU reform, including repatriating powers from Brussels. Most importantly, the coalition must break with the Labour government's record, and be fully honest with voters about when powers are being transferred from Westminster to Brussels - and take the voters' side in opposing such moves."
Meanwhile, a leader in Le Monde argues that the "Tories' manifesto pledged to repatriate powers from Brussels, notably with regard to employment law: this issue is now off the table...It's one of the concessions that Nick Clegg - a fervent European who worked for Commissioner Leon Brittan before being elected to the EP in 1999 - has obtained from his coalition partner. It's not the only one, though. Mark Francois, former shadow Europe minister, has also been sacrificed on the altar of the new coalition. This proclaimed Eurosceptic has given way to David Lidington, a pragmatic politician who will take care of tempering the anti-Brussels ardours of the new Foreign Secretary William Hague".
Independent The Parliament Euractiv FT El Pais OE press release
Fresh attempt to scale back European Parliament's 'travelling circus' fails
The Parliament reports that an amendment proposing to reduce the European Parliament's Strasbourg sessions has been defeated. The proposal, put forward by the ECR group, was voted down by 380 deputies in Strasbourg, with 265 voting in favour and 24 abstentions.
The Irish Times notes that yesterday the European Parliament voted in favour of increasing MEPs' allowance for assistants by €1,500 per month, bringing the allowance up to a total of €19,040 per month, to compensate for the increased workload brought about by the Lisbon Treaty.
EU Climate Commissioner ready to consider any option to fix ETS
Handelsblatt reports that EU Climate Commissioner Connie Hedegaard has said that the market in the EU's emissions trading scheme does not provide enough incentives for investments in green technologies, particularly following the fall in the cost of emissions permits since the economic crisis. The article reports that the Commissioner considers no issues to be 'taboo' in considering ways to improve the system, including better taxation of emission trading or a price target imposed by the EU. The article adds that on 11 June, EU environment ministers will discuss increasing the EU's emissions reduction targets from 20% by 2020 to 30%.
The WSJ reports that tens of thousands of public workers gathered in the Romanian capital yesterday to protest planned government wage cuts meant mandated by the IMF, threatening to call a general strike if the cuts went ahead.
WSJ El Pais EUobserver EurActiv BBC Irish Times
The FT reports that a small band of Scottish fishermen has won a three year battle with the European Commission after an administrative error in 2007 erroneously reduced their fishing quotas.
At this week's EU-Latin America Summit, the EU has signed its first 'Association Agreement' with the Central America region, including the countries: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. Bilateral agreements were also signed with Peru and Colombia.
EurActiv.es 1 EurActiv.es 2 Reuters BBC WSJ
The Guardian reports that Germany's birthrate has slumped to its lowest level ever, falling below a replacement rate that would keep the population stable.
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