| Open Europe |
Europe
Merkel says 'future of Europe' is at stake as she urges Bundestag to approve Greek bailout;
EU Commissioner: "We knew that Greece was cheating"
Greek PM George Papandreou has vowed to push through austerity measures in the face of fierce protests, which resulted in the deaths of three bank workers in Athens yesterday. The Times quotes Greek President Karolos Papoulias saying, "The big challenge we face is to maintain social cohesion and peace. Our country came to the brink of the abyss. It is our collective responsibility to ensure that we don't step over the edge."
German Chancellor Angela Merkel yesterday urged German MPs in the Bundestag to approve the country's €22.4bn contribution to the Greek aid package, split over three years. "We are at a crossroads. What is at stake is no more or less than the future of Europe," she said. "This must be done to avoid a chain-reaction to the European and international financial system, and contagion to other eurozone states. There is no alternative."
The leader of the Social Democrats, Frank-Walter Steinmeier, refused to guarantee his support for the rescue package yesterday and left the issue open. He criticised Merkel for acting indecisively, while also arguing that German banks should shoulder part of the cost of the bailout. "The costs of this crisis cannot again be one-sidedly dumped on the German taxpayer," he said. Il Sole 24 Ore and Handelsblatt report that the SPD are threatening to vote against the bailout package unless the government endorses the introduction of a tax on financial transactions, so that the banks take on some of the costs of the crisis. Die Zeit quotes Steinmeier saying, "Up until now, no government has gambled away so much respect and trust in Europe, in such a short space of time, as this one."
Die Welt notes that in a provisional vote among the governing CDU's MPs, the President of the Bundestag, Norbert Lammert refused to agree upon the proposed version of the aid package.
EUobserver notes that, in a reference to his former protégée Angela Merkel's reluctance to come to Athens' aid, former German Chancellor Helmut Kohl said, "I have no understanding for the current debate about Greece. For people who act as if Greece has nothing to do with them." He was addressing 800 guests, including Chancellor Merkel, who were celebrating his 80th birthday.
El Pais reports that European Commissioner for Trade, Karel De Gucht, revealed yesterday that all EU leaders were aware of the fact that the Greek government was providing false data when it applied to join the euro. "We knew that Greece was cheating", he said, adding that "it was clear as soon as they joined that there was something wrong [with their figures]". The FT reports that the euro crisis is causing the European Central Bank to "think the unthinkable" as it mulls the option of purchasing government bonds directly.
Meanwhile, the WSJ's New Europe blog notes that amid the Greek debt crisis, support for adoption of the euro in Poland fell below 50% once again from the highest-ever reading last year, according to a survey by the Warsaw School of Economics.
WSJ Times Telegraph FT Sun IHT IHT2 FT 2 Times 2 Telegraph 2 FT 3 Independent EUobserver EUobserver 2 FT 4 WSJ: Annunziata WSJ: New Europe blog Times 3 El Pais Il Sole 24 Ore Handelsblatt EFE
Gisela Stuart: "EMU was a political project imposed on unenthusiastic electorates by political leaders in a hurry";
Eurozone comment round-up
Writing in Die Welt, Gisela Stuart, a German-born Labour MP who sat on the Convention on the European Constitution, argues, "EMU was a political project imposed on unenthusiastic electorates by political leaders in a hurry. However, it was based on some very bad economics and ultimately bad economics leads to bad politics which we are beginning to see."
She writes, "There are only two 'solutions' to the current mess. First, is a continuous transfer of funds from the current account surplus counties (in effect the German-bloc). A one-off payment (even if spread over three years) will not work: it would have to be an annual payment in perpetuity, on lines similar to the transfers from west to east Germany after unification... The second 'solution' would be a massive devaluation of the euro...For obvious reasons, neither of those 'solutions' will happen, or if they did would involve economic, financial (and possibly political) disaster in Germany." She adds, "There is no way out of this mess that will not be painful for all countries within EMU as well as the wider world."
A leader in the Times notes that "An area with a single monetary policy can ultimately work only with a single budgetary policy. It requires taxpayers in countries with prudent fiscal policies to rescue countries that are profligate. That is unfair and undemocratic. It leads to centralised government taking decisions without reference to national electorates. That prospect is fortunately not one that faces Britain, outside the euro. Nor must it ever."
In the Sun, Trevor Kavanagh looks at the UK election and argues, "Britain at least still has the freedom and economic independence to choose its destiny - if it wants to. Astonishingly, Nick Clegg still wants us to join the accursed Euro, despite all the evidence that it was doomed from the start. If we give his Lib Dems a big enough say today, he could end up Foreign Secretary in a Lib-Lab government. That's a recipe for disaster."
Handelsblatt comments on the riots in Athens, arguing: "the question is, whether the aid package will in the end find a receiver...It looks like the patient doesn't want the drug".
On his FT blog, Tony Barber argues, "One reason why the eurozone is sliding into ever deeper trouble is because its political and bureaucratic elites do not like, do not understand and have no wish to understand financial markets".
Sun: Kavanagh Handelsblatt Leader FT: Rogoff FT: Tett FT: Leader Telegraph: Leader Times: Leader WSJ: Analysis Die Welt: Stuart FT: Barber
European Commission: First thing the UK government must to do is tackle debt
The Telegraph reports that, according to the European Commission, by the end of 2010, Britain will have the highest budget deficit - defined as the annual rate of borrowing - in the EU, at 12 percent of gross domestic product this year. Commissioner for Monetary Affairs Olli Rehn is quoted saying that "The first thing a new [UK] government has got to do is to agree a convincing and detailed programme of debt consolidation. It is by far the foremost challenge for a new government. I trust that whatever the colour of the government it will take this measure".
Telegraph FT WSJ: Wheatcroft Independent Irish Independent
Jeremy Warner: Crisis leaves the City vulnerable to European "land grab"
Writing in the Telegraph, Jeremy Warner argues that the City of London is "under sustained political and regulatory siege" from Europe. He argues, "The banking crisis and the consequent lorry load of new regulation about to be heaped on the financial services industry provides an unprecedented opportunity for land grab... Angela Merkel and Sarkozy have recently demanded that both clearing and trade repositories for European credit default swaps be located in the eurozone. London's booming over-the-counter markets look particularly vulnerable if made subject to central clearing."
Meanwhile. the Times reports that Commission President José Manuel Barroso said that he would act swiftly with further market regulation and accused credit rating agencies of pandering to the market mood. "The Commission will do whatever is necessary to ensure that financial markets are not a playground for speculation," he said. The WSJ reports that later this month officials from EU governments will discuss a Commission draft proposal requiring most trading in currency derivatives to be submitted to clearinghouses.
European Parliament approves its accounts for 2008 but deletes critical comments in MEP's report
European Voice reports that the European Parliament has approved the accounts for the €1.4 billion it spent in 2008, despite admissions that more needed to be done to improve how it uses taxpayers' money. Green MEP Bart Staes, who oversaw the Parliament's report on its accounts, said he was content with the final report, although he admitted that many of the more critical points he brought up "were deleted".
European Voice Tijd The Parliament EP Press Release
The EU needs a new treaty to embark on a common energy policy, former European Commission President Jacques Delors told the European Parliament yesterday.
The European Commission will filter citizens' petitions to make sure that "silly" initiatives like abolishing the EU are blocked, Maroš Šefčovič, a vice-president of the EU executive, told EurActiv.
The WSJ reports that Spanish PM José Luis Rodríguez Zapatero and opposition leader Mariano Rajoy have agreed to clean up Spain's ailing savings banks that control half of the country's lending and deposits.
UK
The final Times/Populus poll puts the Conservatives on 37 percent, up one point on a week ago. Labour is up one point at 28 percent and the Lib Dems down one point at 27 percent.
Posts
