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Irish stress tests expected to show that banks need €30bn in capital
The results of the Irish banking stress tests are due out this afternoon and are expected to show that banks need €30bn in capital to cover their potential losses. This is mostly down to the continuing exposure to the bust real estate market. According to PA 5.7% of all homeowners are at least three months behind with their mortgages, representing possible losses of €8.6bn to Irish banks. Anglo Irish Bank also announced losses of €17.7bn this morning. This is despite receiving almost €30bn from the Irish government. Trading on the Allied Irish Banks, Bank of Ireland and Irish Life & Permanent is suspended until Friday. On his BBC blog, Robert Peston suggests that total loans by taxpayers (or institutions backed by them) around the eurozone to Irish banks is €208bn.
The Telegraph reports that Portugal has no more than €5bn in cash, meaning it may be able to cover bond repayments in April but not in June, making a bailout inevitable sometime between the two. Separately, the WSJ reports that EU leaders have agreed on a set of nine indicators for gauging economic imbalances across Europe.
Meanwhile, speaking in Norway, European Council President Herman Van Rompuy praised the “sound fundamentals” of the eurozone economies, citing average growth of 2% percent and average deficits of 4.5%. However, FAZ carries the headline “High growth in the Euro-core, crisis in the periphery," adding that the proposed increase in ECB interest rates “will only increase the debt burden of periphery countries.” Conversely, writing in the FT Juergen Stark, member of the ECB executive board, warns that if the ECB does not raise interest rates, peripheral economies would face higher borrowing costs due to a massive inflation risk.
Open Europe blog FT FT:Stark FT Money Supply Bloomberg FT 2 FT Alphaville FT Alphaville 2 FT Alphaville 3 FT Alphaville 4 IHT WSJ Guardian Irish Times BBC: Today BBC: Peston BBC Telegraph WSJ 2 WSJ: Smith FT 4 FT Money Supply European Voice European Voice 2 BBC: Mason WSJ 3 Il Sole 24 Ore SZ Van Rompuy speech FAZ New StatesmanIrish Independent El Pais El Pais 2 El Pais 3El Pais: editorial
German Foreign Minister facing increasing party pressure over handling of eurozone crisis
FT Deutschland reports that Guido Westerwelle, German Foreign Minister and leader of the Free Democratic Party (FDP), Chancellor Angela Merkel’s coalition partner, is coming under severe pressure because of the euro crisis. Jörg-Uwe Hahn, President of the FDP in Hessen, is quoted saying, “We have betrayed our liberal principles in the euro crisis…I don't know why Germany should pay €22bn of capital into the eurozone bailout fund.” Other senior party figures said yesterday that Westerwelle is “wholly unsuited” for his job.
FTD Irish Times
Cameron urges EU leaders to liberalise and deregulate
The FT reports that David Cameron is to write to fellow EU leaders urging them to “unleash the forces of enterprise”. Cameron’s pamphlet, “Let’s choose growth”, includes a chart showing the relative decline in the economic standing of EU states, to the extent that it forecasts that France and Italy will drop out of the world’s top 10 by 2050. He calls for the liberalisation of the market in services, the acceleration of trade deals with countries like India, Canada and Japan, and a lifting of the regulatory burdens on business, including the establishment of an EU-wide patent.
FT
UK net contribution to the EU nearly doubles to £9.2bn
The Telegraph reports that British taxpayers contributed an average of more than £300 each to the EU last year, almost twice as much as in 2009, according to official figures published yesterday. The British net contribution to the EU institutions increased from £5.3bn in 2009 to £9.2bn last year, according to the Office for National Statistics. Open Europe’s Stephen Booth is quoted saying, “At a time when the Government is trying to cut national spending, it makes no sense to increase our contributions to a bloated EU budget that is in desperate need of reform.”
Telegraph
UK to clash with Commission over extra €1.9bn in funding for EU satellite project
European Voice reports that national transport ministers are expected to clash with the European Commission today over the cost and uses of the EU’s troubled satellite project, Galileo. The Commission is requesting an additional €1.9bn for the deployment of the project, which has already been plagued by delays and cost overruns. Austria, the Netherlands and the UK are against the funding increase, but other countries with big satellite industries – France, Germany, Italy and Spain – are supportive of extra funding. The article notes that ministers want a bigger say for national security experts over how Galileo’s police, border control and other restricted services will operate, but the Commission envisages stronger powers for itself.
European Voice Open Europe blog Open Europe research
Another MEP resigns over allegations of corruption
EUobserver reports that Austrian centre-right MEP Hella Ranner resigned on Tuesday following media allegations that she was planning to pay back a business debt using money set aside for parliamentary expenses.
EUobserver European Voice Europolitics
EU mortgage law to hit first-time buyers, says industry
An EU directive to be unveiled today will introduce more stringent rules on mortgage lending within the EU in an attempt to tackle credit market risks. Despite a year-long consultation with mortgage lenders, industry representatives have said the Directive on Credit Agreements Relating to Residential Property will make it harder for financial institutions to lend and for buyers to borrow, hurting first-time buyers.
EurActiv Telegraph
EurActiv reports that due to concerns over terrorism, a majority of EU member states are rallying behind UK proposals to extend the collection of air passenger data to include intra-EU travel and not merely flights to and from third countries.
EurActiv
The Guardian reports that Ryanair will introduce a €2 surcharge on all bookings made from 4 April to fund the costs it is incurring under an EU regulation on passenger compensation, claiming that over the past year it suffered costs of more than €100m to comply with the regulation.
Independent Guardian Irish Times
Writing in Le Monde, French Liberal MEP Sylvie Goulard argues: “In Paris, some people pretend to ignore the discontent of a growing number of MEPs towards the [European Parliament’s Strasbourg] seat. They invoke the symbol…In the EU at 27 and 60 years after the first European Community, this argument has less impact. Even some German MEPs no longer see it as a sufficient reason to justify costly trips, both in terms of time and efficiency.”
Le Monde: Goulard
New on the Open Europe Blog
Law of Averages: why Van Rompuy’s talk of eurozone averages is misleading
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EUtopia 2050: EU proposes banning all petrol cars from city centres by 2050
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