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Eurobonds proposal divides German government;
ECB is considering requesting an increase in its capital from eurozone member states
Ahead of this week's European Council summit, Handelsblatt reports that Germany is not satisfied with the treaty change currently proposed and will aim for a stricter clause. A government spokesperson is quoted saying: "From our perspective, a formulation which makes the connection between financial aid and the requirements for budget consolidation much clearer is desirable." Germany will also aim to state in the changes that the aid can only be used as "ultima ratio" in order "to prevent small problems in a single country activating the mechanism."
Meanwhile, the Eurobonds proposal has revealed open divisions within the German government, as Chancellor Angela Merkel appears to have contradicted comments made by Finance Minister Wolfgang Schäuble suggesting that Germany could accept Eurobonds and push for "a political union" in Europe if certain strict conditions were met. Merkel's spokesman Steffen Seibert is quoted in the Irish Times saying: "The chancellor is convinced that what's necessary now is to act to defend a stable euro. Thoughts about what will be or won't be in 20 years are not on the agenda."
Meanwhile, Reuters reports that the ECB is considering requesting an increase in its capital from eurozone member states. The article quotes a source saying, "The issue is that the ECB is worried about potential losses from its bond buying". The ECB declined to comment. El País reports that Spanish banks are exposed by one third of Portuguese banks - making a total of €75bn.
BBC Independent Le Figaro Reuters 2 Reuters Irish Times Irish Independent Express WSJ WSJ 2 WSJ 3 El Pais 2 FT 3 El Pais 3 Expansion El Pais IHT EurActiv.es Telegraph Mail Times Irish Times 2 Handelsblatt 2 Handelsblatt
Eurozone comment round-up
In Spanish economics paper Expansión, journalist María Mayo notes "the creation of a European agency that issues bonds is the logical next step after the major intervention of the ECB in the debt market [...] After this, in the medium term, could arrive the creation of a European treasury."
A leader in the WSJ argues: "Voters deserve a say on creating a permanent bailout fund [...] But at the same time, we are assured, no messy referendums will be necessary to ratify the change because this amendment won't transfer any new "competences" to Brussels. This is typical Brussels doublespeak. If the EU didn't need new powers to create a bailout mechanism, it wouldn't need to amend the treaty that governs the union [...] At a minimum, the Commission's proposal calls for a serious debate with the 330 million citizens who will ultimately foot the bill".
In the Irish Times, Brussels correspondent Arthur Beesley argues, "If the very decision to revise the treaty reflects German judicial power, the Irish judiciary may yet have an important say on the matter. The final text and the revision procedure will be agreed by EU leaders at their summit on Thursday and Friday, but that's only the first step". "The ultimate decision may rest with the courts", he notes.
Speaker of the Slovakian Parliament Richard Sulik argues in an opinion piece for Slovakian economic daily Hospodarske Noviny that "the time is ripe for Slovakia to stop blindly trust in what eurozone leaders say and prepare a plan B. This is the re-introduction of the Slovak koruna." Sulik notes that Slovakia made great efforts to join the euro because it was promised "a stable currency and solid rules." However, he writes, "two years later, it is sad to see that the rules are not the same for everyone, not to say that they do not exist at all."
El Pais: Carnero Expansion: Mayo FT: Sri-Kumar WSJ: leader Irish Times: Beesley FT: Spiegel FT: Monti EUobserver AFP: Sulik
MEPs secure £91,000 tax-free expenses for next year
The Telegraph reports that, following a decision by the European Parliament's Bureau, MEPs will automatically be given £90,876 in tax-free "daily subsistence" and "general expenditure" allowances next year - an increase of 2.3%. The article notes that MEPs will be allowed to use this money without having to provide any proof of expenditure. MEPs will also get a 2% pay rise taking their annual salary to £80,829 next year. As a result, UK MEPs will next year earn £15,000 more than MPs in the House of Commons. Open Europe's Siân Herbert is quoted saying: "MEPs are already entitled to generous expenses, far more than their national counterparts. This really does not represent good value for taxpayers. The sheer amount of money on offer to MEPs increases the incentive to make as much out of the system as possible."
Meanwhile, FT Deutschland reports that, according to a European Parliament inquiry, 2,000 out of 4,500 top EU officials take overtime compensation if they work more than 37.5 hours a week, with no real control mechanism in place to record the working hours. German MEP Ingeborg Gräßle is quoted saying that "with this information the myth of the hard-working Commission official has died" and that she had "no understanding for compensatory time taken off by people in leadership positions".
EUobserver reports that European Parliament President Jerzy Buzek has confirmed that an investigation is underway after a woman claiming to work as his advisor asked one of Poland's richest men for a "donation."
EUobserver Telegraph FT Deutschland
Swedish unions: Swedish government must use the euro crisis to put a check on the ECJ
On Swedish news site Europaportalen, chief legal counsel of the biggest Swedish Union LO, Claes-Mikael Jonsson, argues that the Swedish government should use negotiations over EU Treaty changes in the wake of the euro crisis to introduce checks on the European Court of Justice. He argues that, at the moment, "EU law can be used against almost all laws in member states and it takes precedence over national law...EU leaders need to create a constitutional council with representatives from the member states. A member state could then appeal against a ruling by the ECJ in order to get an issue of high national importance tested in a political context."
Barnier: Banks' threats to leave City amount to "blackmail"
Michel Barnier, EU Commissioner for the Internal Market, yesterday told the Commons Treasury Select Committee that EU financial regulation and new EU rules for bank remuneration would not lead to businesses leaving the City of London. "I would not be overly impressed by the blackmail exerted in which this kind of risk is mentioned. I very much doubt there will be a flight of talent towards Asia or elsewhere." However, he also said, "I can't say no one is going to leave Paris, Frankfurt or London to go off to Singapore or Switzerland. They too however have reason to be attentive to what the major financial powers of the world decide together."
Euractiv reports that the European Commission confirmed yesterday it had reached an agreement with Poland on allowing countries that have already reformed their pension systems greater leeway over fiscal policy.
EUobserver reports that, in a joint letter, France, Germany and Poland have urged EU Foreign Minister Baroness Catherine Ashton to personally take charge of plans to strengthen military cooperation between EU member states and between the EU and NATO.
EUobserver reports that a self-funded group of former EU officials and NGO, media and PR-sector workers has created an EU version of WikiLeaks, called BrusselsLeaks. The article notes that BrusselsLeaks will not publish sensitive EU-related documents itself, but will check their authenticity and pass them on to the media.
The Courrier International reports on the scandal involving Kalina Ilieva, who chaired the Bulgarian Agriculture Ministry's department in charge of distributing CAP funds despite holding a false degree.
European Voice reports that yesterday EU foreign ministers agreed to impose sanctions on senior politicians in Ivory Coast following an attempt by President Laurent Gbagbo to stay in power despite losing an election last month to Alassan Ouattara.
Italian Prime Minister Silvio Berlusconi will face confidence votes in both Houses of the Italian parliament today.
Corriere della Sera BBC: Today BBC: Today 2 Independent: Leader Le Figaro: Rousselin
The Irish Times notes that Irish bank AIB has backed down from paying €40m in bonuses to executives after Irish Finance Minister Brian Lenihan warned that the government would not provide additional State aid to the bank if it did so.
Irish Times Irish Independent: Oliver FT Telegraph Expansion
An article in the Mail reports that Financial Services Authority Chief Executive Hector Sants has said that the supervisory report on the near collapse of the Royal Bank of Scotland two years ago cannot be made public due to EU rules establishing that individuals and companies involved in the investigation must give their consent to do so.
El País reports that an investigation is under way into the Sindicato Independiente de Trabajadores de Cádiz, a local trade union in Andalucía which released certificates for fake training courses. The Spanish Guardia Civil is trying to ascertain whether the body received EU funds to organise the courses.
The Telegraph reports on a leaked EU document which states the EU's "readiness, when appropriate, to recognize a Palestinian state" increasing the international pressure on Israel following the effective collapse of direct Middle East peace talks last week.
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