| Open Europe |
Europe
ECB buys more Portuguese debt as bond yields soar
The ECB returned to the bond markets on Friday as Portugal’s cost of borrowing surged to 7.58%,a spread of 4.38% over German bunds. The FT Alphaville blog notes that interest rates are now above the level at which Greece entered into bailout negotiations.
Over the weekend it emerged that Anglo Irish Bank and the Irish Nationwide Building Society, were behind the €16bn spike in overnight borrowings last week. A source close to the transaction said that it was a result of the plan to wind down the two lenders, adding that the overnight facility “gives the banks the freedom to have the assets at their disposal immediately if there is a quick sale”.
Meanwhile, Athanasios Orphanides, a member of the ECB's Governing Council, has warned that there is a “particular urgency” to the situation in Portugal. "The longer our political leadership delay agreeing on a framework that will ensure stability, the greater is the threat that we may have another crisis similar to what we experienced in 2010," he added. Reuters reports that Jean-Claude Trichet, President of the ECB, warned on Saturday that increasing wages in the eurozone “would be the stupidest thing to do” given the inflationary pressures.
On Friday, Spain approved a law which will force Spanish banks to increase capital holdings to 8% of risk weighted assets by September or face partial nationalisation. However, unlisted cajas have been granted until next March to organise stock market floatations.
FT Weekend reported that the new EU proposals to force bondholders to share the pain of any future bank recapitalisations risks singling out some investors for losses while leaving other creditors of traditionally equal stature in an insolvency untouched.
In the Telegraph Ambrose Evans-Pritchard argues that “the reality of Germany's 'rescue policy' is to extract subsidy from the periphery by lending to Greece and Ireland at rates far above its own borrowing cost, widening the gap between core and periphery yet further”.Separately the FT Deutschland reports that the German government fears that there will be too much transparency in the next round of banking stress tests and may not publish all the results.
FT FT 2 WSJ Times FT Weekend FT Weekend 2 FT Weekend 3 FT Alpahville EurActiv WSJ Reuters FT Money Supply WSJ El Pais Le Parisien: Strauss-Kahn Expansión Expansion 2 Europe 1: Trichet Reuters Irish Independent FT: Münchau Irish Times
Merkel’s party suffers historic defeat in regional election
German Chancellor Angela Merkel's governing CDU party suffered a heavy defeat in a regional election in Hamburg yesterday. Preliminary results gave her party 22% of the vote, compared with 48% for the opposition Social Democrats - the worst result for the CDU in Hamburg for more than 50 years. FT Deutschland’s Andreas Rinke notes the result could negatively impact on the “much more important” elections in Saxony-Anhalt, Baden-Württemberg and Rheinland-Pfalz to be held in March.
FT WSJ Le Monde Times El Pais IHT Guardian Welt FT Deutschland
Lord Leach: “It must be better to control one’s own monetary destiny”
In a letter to the FT Open Europe Chairman Lord Leach argues that those who disagree with the view that Britain would have better survived the crisis if it were in the eurozone must always point to what did not happen: “We did not have the hyper-bubble that Spain and Ireland had as a result of interest rates that were too low; and we did not find ourselves unable to react quickly with monetary easing when the banking crisis hit”. He adds that although neither side is 100% right, “it must be better to control one’s own monetary destiny”.
FT
The front page of German newspaper Bild reports that Open Europe has discovered that the EU has funded a Spanish sex shop, with money coming from the European Social Fund. The shop received €611.15 in order to "improve the employability of the unemployed".
No link
Justice Secretary rules out UK withdrawal from European Convention on Human Rights
Speaking on the BBC’s Andrew Marr show yesterday, Justice Secretary Ken Clarke said there was no question of the UK withdrawing from the European Convention on Human Rights. However, he said that the Government will use its chairmanship of the Council of Europe in November to try to redefine the remit of the Strasbourg-based Court and reduce the number of judges. The Independent reports that the Justice Secretary and the Deputy Prime Minister Nick Clegg will also set up a commission to examine the possibility of drawing up a new British Bill of Rights.
In an op-ed in Le Figaro, the speaker of the lower house of the French Parliament Bernard Accoyer argues that elected MPs should remain the last guarantors of fundamental rights, noting that ECHR rulings “are imposed on states, without the latter being able to challenge or durably ignore them. The Convention doesn’t allow for real democratic arbitration.”
Independent BBC: Today BBC: Clarke Sun Express Saturday’s Mail Express Telegraph: Moore Le Figaro: Accoyer Mail TelegraphGuardian Express Times
Labour weighs up calls for referendum on EU membership
Saturday’s Independent reported that Labour are considering calling for an ‘in or out’ referendum on the EU. Wayne David, the shadow minister for Europe, said on the issue: "The Labour Party is having a fundamental policy review and this is one of the things that will be considered." He was "still to be convinced," he said, but some Labour figures believed a referendum would "lance the boil" of Euroscepticism.
Independent
EU struggles to speak with one voice on Libyan crisis
While several member states – including the UK – have condemned Tripoli’s action, Italian Prime Minister Silvio Berlusconi said on Saturday that he did not feel he should “disturb” Libyan leader Moammar Gaddafi with calls for restraint, while Czech Foreign Minister Karel Schwarzenberg warned that Gaddafi’s fall would be a “catastrophe”. Meanwhile, EUobserver reports that, in a letter to EU High Representative Baroness Catherine Ashton, France and five other member states have suggested that the EU give less money to its post-Soviet neighbours to the advantage of Mediterranean countries following the recent uprisings.
De Telegraaf reports thatLibya has threatened to end cooperation with the EU on immigrationif they continue to support protestors. In October the EU offered Libya €50m to combat illegal immigration.
Meanwhile, The Times notes that the EU is preparing a ‘Marshall Plan’ for the Middle East. Measures could include loans, visa concessions, election assistance and support for an investigation into police abuses during the uprisings.
Telegraaf France Soir Le Vif La Stampa EUobserver BBC: Today AFP BBC: Today 2 EUobserver 2 Times: leader IHT Presseurop blog: Feehily EurActiv European Voice EUobserver
Denmarkwill seek to limit EU pay during its Presidency in 2012
Danish Politiken reports that on average, salaries across Europe have fallen by 5%, while for EU officials they have increased by 5%. One in five EU officials has an annual salary of 1 million Danish kroner, around €135,000, or more. Between 1,100 and 1,600 make more than the Danish PM. The Danish government has said that it will try to limit wages during it’s EU Presidency in 2012.
Politiken
In the Sunday Telegraph, Christopher Booker noted that “To meet the EU’s targets, we now have to show that every year more of our rubbish is recycled: hence the growing plethora of bins and bags which causes such confusion and ill-feeling.”
Sunday Telegraph: Booker
EU electoral mission to Mexico “an exercise of shamless complicity”
In an opinion piece in El Pais, ProfessorSergio Aguayo Quezada of the research institute El Colegio de México argues that the EU’s electoral observation mission to Mexico in 2006 “was an exercise in shameless complicity and concealment of an election plagued with irregularities”, after EU officials declared the election to be “transparent” despite widespread allegations of fraud. The article notes that €2.47m was spent on the mission.
El Pais: Aguayo Quezada
A leader in El Pais argues that the French and German rejection of the desperate Spanish proposal to make an English only patent, [has impeded] a patent that would be truly competitive on a global scale”.
El Pais: leader
The FT reports that Britons may be allowed to take a special “English-only” entrance exam to work in Brussels, in an effort to boost the dwindling number of British officials at EU institutions.
FT
The Mail on Sunday reported that the amounts of EU farm subsidy payments made to the Royal family will be kept secret to comply with a European Court of Justice ruling on data privacy.
Mail on Sunday
Die Presse reports that the Austrian government has failed to reach agreement on whether to implement the EU data retention directive and now risks being fined by the EU.
Die Presse ORF
The Sunday Telegraph reported that the EU is set to grant Indian skilled workers between 35,000 and 50,000 visas a year across the 27 member states as part of a trade deal currently being negotiated with India. Up to 20,000 visas would reportedly be provided by the UK.
Mail on Sunday
The IHT reports that the Commission is coming under pressure to maintain the ban of liquids in air passenger hand luggage. The ban is due to be lifted in two months.
IHT
The Commission has criticised Bulgaria and Romania for the slow progress made in reforming national judiciaries and demanded that they adopt additional anticorruption measures, reports Expansion.
Expansion
New on the Open Europe Blog
Labouring under a misconception: suggestions that the EU is low on voters’ list of priorities are misguided since EU laws and regulations have such a large impact on many aspects of British life and politics.
Open Europe Blog
Posts
