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Europe
FAZ: Guarantees for eurozone permanent bail-out fund might reach two thirds of German budget;
Eurozone finance ministers hesitate on size of temporary eurozone bail-out fund despite growing worries over potential Portuguese bail-out
A leader in FAZ notes that the guarantees for the eurozone’s post-2013 permanent rescue fund, the European Stability Mechanism, could reach an estimated size of “about two thirds of the [German] federal budget. Only a year ago it would have been unimaginable that Germany would even bail out troubled countries, let alone to such an extent. The Bundestag still needs to approve the increase. This would mean further loss of sovereignty."
The article goes on to argue: "It should be remembered that [German Chancellor] Angela Merkel had initially proposed that the permanent bail-out scheme be funded through contributions of private creditors, not of Germany [...] What does Merkel get in return for in the negotiations on reform of EMU? The answer should be read in the stars."
A separate article in the paper also notes that, for the first time, the German government has admitted that the eurozone’s proposed permanent rescue fund would involve an extra burden for Germany. Finance Minister Wolfgang Schäuble is quoted saying: "Indeed, our total contribution would need to become a lot higher."
In an interview with Euractiv Deutschland, German Professor Markus Kerber, who has filed a lawsuit against the eurozone bail-outs at the German Constitutional Court, has warned that, by agreeing on the ESM, "EU leaders have empowered themselves to let the German taxpayer guarantee in an unlimited way decisions that are being taken by Brussels. Treaty change is not only problematic in a Constitutional way. It also endangers sovereignty of the German Parliament."
Meanwhile, yesterday eurozone finance ministers delayed making any decisions on increasing the size of the eurozone’s temporary bail-out fund. Dutch Finance Minister Jan Kees de Jager suggested that this was not an immediate priority, arguing that “the shape and size of the bail-out fund is neither the problem nor the solution for the crisis.”
Pressure continues to grow on Portugal with the yield on five-year bonds reaching above 7% for the first time. The FT quotes Gary Jenkins, head of fixed-income at Evolution Securities, saying: “Unless there is a comprehensive agreement soon [on the rescue fund], then it becomes more probable that investors will turn away from Portugal and the EU will have no choice but to bail it out.”
Portuguese Finance Minister, Fernando Teixeira dos Santos said: "A country on its own cannot face up to the challenges posed by this crisis. We have to do our bit but we also need European efforts to stabilise the euro.” In an interview with Diario Economico, Portuguese Central Bank Governor Carlos Costa has said that Portugal has already entered recession.
IHT IHT 2 Expansion WSJ 2 FT Jornal de Negocios Les Echos FAZ WSJ: Lagarde Irish Times EUbusiness Irish Independent Irish Times 2 FT: Money Supply blog WSJ: Nixon Irish Independent: McWilliams FT: Spiegel FAZ: Leader Euractiv Deutschland: Kerber FAZ: Stelzner
EurActiv reports that Britain is seeking an opt-out from common EU rules on public accounting systems, statistics, forecasting practices and many other stages in the budgetary process.
EurActiv
Merkel’s aide set for Bundesbank Presidency
The German government is expected to appoint Jens Weidmann, Chief Economic Advisor to German Chancellor Angela Merkel, as President of the German Bundesbank. Handelsblatt reports that German opposition MP Frank-Walter Steinmeier has warned that the appointment of a "bureaucrat with official instructions from the Chancellor's office" would endanger the independence of the Bundesbank.
Le Monde FT WSJ IHT Handelsblatt
Osborne refuses to sign off EU accounts for 2009 in symbolic move
The UK, Netherlands and Sweden yesterday refused to sign off the EU’s 2009 accounts, due to concerns about waste and transparency, by abstaining in a routine vote. The move was purely symbolic. The three countries also issued a statement calling on the Commission to publish full reports on how subsidies are spent in every member state. Currently only four member states do this – the three signatories plus Denmark.
NOS Elsevier FT Express
The Mail reports that Andrew Cooper, who is expected to be announced as a new senior aide to David Cameron today, argued in 2000 that the “ultimate modernisation” for the Conservatives would be to become pro-euro.
Mail
Euractiv Deutschland reports that due to a controversial agreement between the European Parliament and a private pension fund for MEPs – the so-called second pension fund – European taxpayers might be ultimately liable for the pension fund’s bailout; necessitated by a deficit of around €84.5m, due to failed speculative investments. The unclear legal basis of the fund had attracted criticism from the European Court of Auditors as early as 1999.
Euractiv Deutschland
Writing in the Mail, Andrew Alexander argues that the allusions to the UK’s or Parliament’s ‘sovereignty’ during last week’s debate on the ECHR and prisoners’ voting rights missed the point because “such sovereignty has not existed since we became members of the EU […] in 1973.” He suggests that a serious chance to redress the balance lies in “cancelling or indefinitely postponing” upcoming EU legislation in the field of employment law.
Open Europe research Mail: Alexander
The European Commission is taking a tougher line on the Polish government over its failure to produce a detailed plan to reduce its budget deficit to 3% of GDP by 2012. Media sources speculate that Polish Finance Minister Jacek Rostowski is trying to negotiate an extension until 2013, but Commissioner for Economic and Monetary Affairs Olli Rehn has said that given the good state of the Polish economy there is “no reason to delay.”
Rzeczpospolita TVN24 Dziennik.pl
A draft version of the European Commission’s '2050 Roadmap', seen by EUobserver, proposes reducing carbon emissions by 25% over the next decade, 5% more than current targets. The report claims that this target can be met if member states comply with existing commitments to increase energy efficiency by 20% by 2020.
Euractiv Euobserver
The BBC reports that yesterday the European Parliament endorsed new rules that will give stronger compensation rights to bus and coach passengers across the EU starting from 2013.
BBC
El Mundo reports that EU Foreign Minister Catherine Ashton has announced that Tunisia will be given €17m immediately, and a further €258m over the next three years, to support democratic reforms.
El Mundo
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