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Wall Street stocks tumble over eurozone contagion fears;
German Parliament approves Greek bailout package
New York's Dow Jones Industrial Average fell by almost 1000 points at one point last night, as fears of contagion from Greece's financial problems grew and caused investors to sell stocks and risky bonds. ECB President Jean-Claude Trichet, said the Bank's governing council had not discussed the option of buying Greek government bonds and gave no signals that further measures were under consideration to intervene in the crisis. His comments sent the euro sharply lower, as well as southern European government bond prices.
In the Telegraph, Ambrose Evans-Pritchard notes that "It is the first time in this crisis that Italy has started to flash warning signs." The Independent reports that credit rating agency Moody's has warned that Italy, Portugal, Spain, Ireland and the UK are at risk from investors turning their backs on government bonds, saying: "the contagion risk could dilute these differences and impose very real, common threats on all of them."
Meanwhile, the Guardian reports that the Greek parliament yesterday approved the three-year €30bn package of austerity measures needed to activate the EU-IMF €110bn bailout. MPs passed the Bill by 172 votes to 121. The article notes that the opposition New Democracy party's refusal to endorse the cuts - saying they will only exacerbate the country's recession - will make it harder for Greek PM George Papandreou to win public approval.
ARD reports that the German Bundestag has approved the Greek bailout package. This afternoon the Bundesrat is expected to approve the law and the German President will then sign the bill. The Social Democrats abstained in the vote. Handelsblatt reports that a lawsuit against the bailout is to be launched with the German Constitutional Court today by four law professors. Le Figaro reports that 48% of Germans believe that Angela Merkel did not effectively manage the crisis.
EUobserver reports that ahead of an extraordinary meeting of eurozone leaders in Brussels today, French President Nicolas Sarkozy and Chancellor Merkel have written a joint letter saying, "For economic and monetary union to remain a success story, dealing with this crisis alone will not suffice...This implies that we reinforce the co-ordination of our economic policies and the internal surveillance mechanism of the euro area so that each country shares responsibility for the stability of the euro." The letter calls for a crackdown on credit rating agencies and to extend the surveillance of member states' economies "to structural issues and competitiveness."
AFP quotes Merkel saying, "Governments must regain their supremacy over the markets, which they no longer have, and for that we need much stricter global rules." She added, "It is a fight of policy against the markets. That is how I see it personally but I am determined - as are my colleagues, I am certain - to win this fight and we will be victorious, I am sure."
Telegraph FT Independent BBC WSJ Mail Guardian Irish Independent WSJ 2 Irish Independent Times FT 2 IHT WSJ 3 Guardian 2 BBC FT 3 FT: Leader Telegraph 2 Independent 2 The Parliament Irish Times European Voice WSJ 4 Irish Independent European Voice European Voice 2 EUobserver EUobserver 2 EurActiv FT 4 Irish Times AFP ARD Tagesspiegel AP AFP Reuters Sueddeutsche Handelsblatt Handelsblatt: Mißfelder Handelsblatt Leader LeFigaro
German Finance Minister: "The European project is not much supported by the public"
The IHT reports that German Finance Minister Wolfgang Schäuble, speaking at the WDR Europa Forum, has said that that if the EU does not provide stability for the euro, "we will have no chance of regaining the trust of the people." He added, "The European project is not much supported by the public. We have to convince people that European unification is in the interests of Europe. I am very worried about Euro-skepticism."
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Eurozone comment round-up
Writing in the Independent Hamish McRae argues that, "Once trust is lost that debts will be met when they fall due, it takes an age to rebuild. That lost of trust has now extended far beyond Greece itself and is spreading further across southern Europe every day... The more I look at the numbers, though, the more I think a formal default [in Greece] is inevitable, with the country having to do some sort of deal with its creditors that pays them less than 100 cents in the euro."
The Economist's Charlemagne column argues that, "the euro will not be saved by rules alone...here is a blunt truth: EU governments are not about to pool their national budgets. A convergence of social contracts--getting Greeks to behave more like Germans--may be the euro's best hope."
The column's blog also argues that if Spain or Portugal needs a bailout, "the next British government might find weary eurozone governments asking why, exactly, one of the big four countries of the EU was so unwilling to spend a single cent on securing the future of the EU."
Writing in Handelsblatt, German CDU MP Philipp Mißfelder, who is also the leader of the Young Christian Democrats, argues that "a European federal state is not the right way...As an alliance of states, the character of the EU as a space of freedom, security and law will be better safeguarded." A leader in the paper argues: "Merkel must tell the truth... two eurozone countries are quasi bankrupt... Merkel must reckon that Zapatero will also soon beg the Eurozone for help, regardless of how long he denies that."
The front page of FAZ features a comment by the paper's publisher Berthold Kohler in which he argues that: "for the set up of a pipeline whereby in the next years dozens of billions of euros will be sent to the southern part of the EU, in order to keep up the fiction of an economic and monetary union, no political majority will be found in Germany." In a separate comment FAZ writes: "in short it can be summarised that the majority opinion of the German population is only being expressed by eurosceptic parties, which are not entering the election in Germany at all."
Independent: McRae WSJ: Editorial Economist: Charlemagne BBC: Flanders blog Economist: Charlemagne notebook FAZ FAZ 2
Merkel: It is a "scandal" that UK is holding up agreement on AIFMD
Reuters reports that German Chancellor Angela Merkel has said she wants the EU's proposed Alternative Investment Fund Managers Directive to be agreed within three weeks, that it is a "scandal" that they are not currently regulated, and blamed the UK for holding up agreement.
Meanwhile EurActiv reports that Uli Fricke, Chair of the European Venture Capital Association, says that a clause in the Directive will mean that small and medium sized enterprises will have to meet additional disclosure criteria if they accept venture capital, forcing them to share details of research investments and business strategies.
He added, "The disclosure rules for venture-backed companies - many of whom are SMEs - put them at a commercial disadvantage compared to competitors who have other sources of funding". A letter to the FT from a private investor argues that the Directive has failed to take account of the interests of small retail investors.
FT Reuters EurActiv OE research OE research: Investment trusts
US Vice-President warns of terrorist risk in failure to agree data sharing agreement
In a speech to the European Parliament yesterday, US Vice-President Joe Biden attempted to gain MEPs' support for the Swift agreement on sharing of information about bank transactions between the EU and US, warning that "The longer we go without an agreement on this issue, the greater the risk of another terrorist attack."
EUobserver European Voice The Parliament
Het Financieele Dagblad reports that the European Alliance of Energy Intensive Industries has attacked EU plans to raise plans to cut emissions by 2020 from 20% to 30%, arguing that it will cause job losses and cuts in production.
The European Commission has approved Gazprom's proposed takeover of Ukraine's national gas company Naftogaz, despite warnings that it would harm the EU's interests.
European Voice reports that EU development ministers will have a meeting with EU Foreign Minister Cathy Ashton on Monday to discuss the proposals for the European External Action Service and its role in EU development policy.
UK
UK election produces hung Parliament
The UK's General Election has resulted in a hung Parliament, with the Conservatives as the largest party. Negotiations will now begin to see who is able to form a Government.
Meanwhile, Green MEP for the South-East Caroline Lucas has been elected to Parliament while UKIP MEP Nigel Farage, who was campaigning in the election, was involved in a light plane crash yesterday, but is now in a stable condition and expected to be held in hospital for a few days.
Sun Times Telegraph Independent Express BBC European Voice Times Telegraph FT Express Irish Times IHT BBC EUobserver EurActiv European Voice BBC The Parliament WSJ WSJ: Nixon WSJ: Editorial Mail Guardian
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