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German coalition split over increasing size and scope of eurozone bailout fund;
EU minister to discuss revised funding formula to boost lending capacity
The FT reports that EU finance ministers will today discuss French-backed plans to give the European Financial Stability Facility (EFSF) new powers to buy bonds from struggling eurozone countries. They will also discuss the possibility of increasing the EFSF’s lending capacity. European Commission President Jose Manuel Barroso has angered German Chancellor Angela Merkel by calling for a deadline of the next EU summit, in just over two weeks time, to reach agreement on extending the remit of the fund, which also has the support of the ECB.
The FTD notes that EU leaders will discuss a reworking of the EFSF’s rules in order to allow the fund to be primarily guaranteed by triple A rated countries, freeing up more of the €440bn made available last year. Under the current rules, the fund cannot lend much more than €250bn and maintain its AAA rating but the article notes that revising the funding formula would put a bigger burden on the triple A countries, such as
However, the Telegraph reports that the German coalition is split over the bailout fund, quoting Guido Westerwelle, German vice-Chancellor and head of the FDP, saying that there “is no need to talk about increasing” the size of the bailout fund or extending its powers. An FDP spokesman confirmed that Chancellor Merkel’s coalition partners would oppose any extension of the fund’s size or scope. The Sunday Telegraph quoted Merkel saying that any “further package of measures” would have to include more EU economic oversight and stricter conditions on recipient countries.
Meanwhile, Reuters reports that Slovak Finance Minister Ivan Miklos has called for the restructuring of Greek debt, describing the bailout of the country as a “fatal mistake”. The WSJ notes that this week will see a series of government bond sales from
FT Telegraph Irish Times Swedish Radio FT Deutschland FT Deutschland 2 FT Deutschland 3 FAZ FTD 4 Bloomberg EurActiv.es FT 2 FT 3 FT 4 Independent El Pais IHT Sunday Telegraph WSJ FT 5 BBC: Today Reuters.de Jornal de Negocios FTD Reuters El Pais
Ministers reject Barnier’s proposed joint EU guarantee on banking deposits
Handelsblatt reports that EU ministers have unanimously rejected plans drawn up by Michel Barnier, the Commissioner for Internal Market and Services, on a joint liability scheme to guarantee bank deposits across the EU. The plan would have made EU states liable for each other’s bank deposit guarantee schemes.
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Former Treasury official appointed EU ambassador
David Cameron has appointed senior Treasury official, Jon Cunliffe, as the next ambassador to the EU. Mail on Sunday columnist James Forsyth noted that Cunliffe takes a tough approach to EU affairs and was one of the most vigorous opponents to Tony Blair’s ambition to take
Douglas Carswell’s blog Mail on Sunday: Forsyth
Irish Foreign Minister Micheál Martin has announced he will vote against a motion of confidence in Prime Minister Brian Cowen’s leadership of Fianna Fáil at tomorrow’s parliamentary party meeting, the Irish Times reports.
Eurozone comment;
Trevor Kavanagh: Rather than storing up trouble for the future by allowing
In the Telegraph, Ambrose Evans-Pritchard argues that German Chancellor Angela Merkel “has two viable options. She can choose to save monetary union, first by doubling the size of the EU bail-out fund and halve the interest rate charged so that the debt-stricken states can recover; and then by acquiescing in fiscal federalism and a pooling of debts – what McKinsey’s chief in Germany calls a ‘spiral into a Transferunion’…Or she can pull the plug, by quietly signalling to the Verfassungsgericht that Berlin would not be too angry if the eight judges declared the EU’s rescue machinery to be unconstitutional, ending EMU as we know it.”
In the Sun, Trevor Kavanagh argues that rather than storing up trouble for the future by allowing China to bail out struggling euro states they ought to default instead. In the Times, former editor of the Economist, Bill Emmott argues “
Telegraph: Evans-Pritchard Times: Emmott WSJ: Stelzer FT: Münchau Telegraph: Letters
New code of conduct for EU Commissioners will not bar immediate entry into lobbying industry
FAZ reports that, despite continued criticism from the European Parliament and the public, a draft of the new code of conduct for former members of the European Commission will not bar them from working as lobbyists immediately after the end of their term.
The Sunday Express reported on the uncompleted European Parliament visitor centre which is already £6.7m over budget and three years behind schedule. Open
Saturday’s Express reported that over £250m a year is used to subsidise
The European Parliament will award €5,000 in four categories to journalists who have covered major issues at European level or “promoted better understanding of EU institutions or policies”.
European Parliament press release
In an interview with Le Monde, French
Le Monde Coulisses de Bruxelles
The Independent on Sunday featured an interview with Stuart Wheeler, who will take over as Treasurer for UKIP in March.
FTD reports that
On Friday, the Commission announced a ban on Icelandic mackerel in response to an escalating dispute over fishing limits.
Writing on Conservative Home, Stephen Hoffman of the Freedom Association argues for reform of the European Arrest Warrant.
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