Tomorrow, from 1.30pm – 3.00pm, Open Europe will be holding a panel debate in London on new EU proposals to regulate short selling. The panel includes: Syed Kamall MEP; Sam Jones, Financial Times; Andrew Baker, Chief Executive, Alternative Investment Management Association; Olga Petrenko, the European Securities and Markets Authority; and Michael Treip, Financial Services Authority. Places are limited. If you wish to attend, please RSVP to Sarah Hodges on shodges@openeurope.org.uk or 0044 20 7197 2333. S&P downgrades Portugal and Greece due to permanent bail-out fund agreement The WSJ reports that Portugal’s government deficit in 2010 may end up being €2bn higher than originally predicted as the Portuguese government has not accounted for all the money it has used to recapitalise its banks. Similarly, Kathimerini reports that Eurostat also found a €500m shortfall in Greek pension funds, while the Greek accounts found a €900m surplus, this discrepancy could push the Greek deficit over 10% of GDP. Writing in the WSJ, Pedro Passos Coelho, leader of Portugal's centre-right Social Democratic Party, states that he rejected the recent round of austerity measures in the Portuguese parliament “not because they went too far, but because they did not go far enough”. He also argues that the reforms up to now fail to get to “the heart of Portugal's main economic challenge, which is to ensure that growth goes hand in hand with fiscal discipline”. Separately, Open Europe’s briefing on the size of a Portuguese bailout is cited on the Economist Bagehot blog. The Irish Independent reports that the Irish government could be required to provide a cash injection for those banks that fail the national stress tests, in order to hold them over until private funding can be found. FD reports that European Budget Commissioner Janusz Lewandowski yesterday reiterated his support for an EU tax, and said the UK and Dutch rebates should be challenged. Solvency II could put European banks’ funding at risk German banking supervisor warns of “transfer of powers” to EU level Eurozone comment round-up The Irish Independent notes that following the outcome of the Irish banking stress tests, due out tomorrow, the Irish government may seek to force losses on bondholders in Anglo Irish. “That would be a supremely logical thing to do, but it still runs into the objection that it sets a precedent which the ECB, for one, would find dangerous,” the paper argues. An article in the Independent notes that, according to the UK Office for National Statistics, the net transfer of funds from the UK to EU institutions rose from £5.3bn in 2009 to £9.2bn in 2010, increasing to £230 for every household in the country. The UK’s General Medical Council (GMC) has called for minimum standards for doctors across all 27 EU states and urgent checks on differences in medical qualifications or insufficient language skills, which could put patients at risk. In a submission to the European Commission, the GMC warns that EU rules “should not be at the expense of patient safety”. France says US and UK proposals to arm Libyan rebels prohibited by UN resolution Italian news agency AGI reports that Italy’s Foreign Minister Franco Frattini has criticised the EU for being “motionless” with regard to migrants arriving in Italy from North Africa. “We need [the EU’s] political intervention, not money…let’s have some planning at the European level which allows us to address the issue of solidarity among [EU] countries. This is a job for the EU”. German doctor abducted to face murder trial in France The FTD’s Wolfgang Münchau argues there is an opening to the right of Angela Merkel’s CDU for a party that will tap into German anger towards financial transfers in the eurozone. The front page of the Mail reports that UK Agriculture Minister Caroline Spelman and Conservative MEPs led moves to reject the European Parliament’s call for a ban on or, failing that, clear labelling of products from cloned animals. The lack of agreement means that no controls will be put in place. A draft European Parliament report prepared by French socialist MEP Pervenche Berès proposes “a European Treasury, tax harmonisation, euro bonds and increased EU expenditure to finance investments in research and development, infrastructure and energy projects”. The US and EU have begun formal negotiations on measures aimed at protecting personal information which is shared under counter terrorism agreements, the US Justice Department said in a statement yesterday. In Kosovo’s capital, thousands protested yesterday against the EU's law enforcement mission Eulex, which recently arrested Kosovar rebels for war crimes committed during the 1998-99 war of secession from Serbia, reports EurActiv. MEP claims he is innocent of corruption, just guilty of vanity Permanent euro bail-out fund failing before starting?Open Europe Europe
Standard & Poor’s yesterday downgraded Portuguese and Greek sovereign debt by one notch and kept them both on negative outlooks. S&P cited the rules of the permanent bailout fund (ESM) – which could force investors to accept losses should a country not be able to pay back its debt - agreed at last week’s EU summit, as the reason for the downgrades. On his BBC blog, Robert Peston notes that Germany’s determination to “punish reckless sovereign borrowers, has had the effect of making it more likely that Portugal will have to tap the eurozone and the IMF for emergency funds.”
FT FT Money Supply FT Alphaville FT Alphaville 2 FT Alphaville 3 WSJ WSJ 2 City AM IHT El Pais EUobserver Guardian WSJ: Real Time Brussels blog Irish Independent Economist: Bagehot Le Figaro BBC: Peston FT 2 WSJ 3 WSJ: Coelho Kathimerini FT 3 WSJ 4 Handelsblatt FT 4 EurActiv Guardian: LeaderGuardian Irish Independent 2 EUobserver 2 BBC: Peston 2 Handelsblatt 2 FAZ
FD
Bloomberg reports that a potential conflict between the so-called Basel III liquidity requirements for banks and the EU’s Solvency II framework for the insurance sector could put European banks’ funding at risk. Under the Basel III rules, European banks are being required to sell more long-term bonds to boost their liquidity. However, European insurers – who usually are the biggest buyers of such debt – might be unable to increase their purchase of long-term bonds, since the EU’s Solvency II, due to be implemented in 2013, makes them more expensive to hold.
Bloomberg
Börsen-Zeitung reports that Jochen Sanio, the President of German Banking Supervision Authority (BaFin), has criticised the "transfer of powers" that is taking place from Germany to the new EU financial supervisors. Sanio suggests that regulations developed by the European authorities will become binding and will need to be implemented by Bafin directly, without having to first be implemented by German lawmakers. He warns of a "regulatory wave of frightening proportions".
Börsen Zeitung Open Europe report
A leader in the FT argues that rather than placing the burden of supporting troubled banks on struggling peripheral countries or the ECB, “Much better would be to prepare orderly bank restructurings: no Irish, Greek or Portuguese bank is systemically important on a European scale.” Also writing in the FT, Martin Wolf argues, “This is, alas, a ‘transfer union’. But those transfers occurred years ago, when these loans were made. It would be helpful – and honest – for the German government and the governments of other creditor countries to tell their people that they are rescuing their own savings in the guise of rescuing peripheral countries. The alternative is to write off loans and recapitalise their banks directly. To admit this would be to admit their policies have been at fault. That would surely be helpful.”
FT: Editorial FT: Wolf Reuters: Saft El Pais: Roldan Mones Irish Independent: Editorial
Independent
Guardian Telegraph GMC statement
Following yesterday’s summit on Libya, the Guardian reports that the US and Britain have raised the prospect of arming Libya's rebels if air strikes fail to force Libyan leader Muammar Gaddafi from power. However, France and Italy have disagreed with this interpretation of the UN resolution. Asked about the possibility of arming the rebels, the French Foreign Minister, Alain Juppé, said: “I remind you it is not part of the UN resolution – which France sticks to – but we are ready to discuss it with our partners.”
AGI Guardian Times: Leader Times FT Irish Independent Irish Times EUobserver BBC: Robinson Telegraph
The BBC reports that a German man abducted and found outside a French court in 2009 will be put on trial for murder. Dieter Krombach, 75, was cleared of killing his 14-year-old stepdaughter in Germany but later convicted in France in 1995 in his absence. The victim’s father, Andre Bamberski, is accused of Krombach’s kidnap. AFP notes that France’s request for Krombach to be extradited under an EU Arrest Warrant in 2004 was refused by the Germany authorities, which said the case had been dismissed. Le Point reports that, despite protests from Mr Krombach’s lawyers about his abduction and the conflict between German and French legal jurisdiction, the French courts have refused to refer the case to the European Court of Justice.
BC Aljazeera Le Point AFP
Irish Times: Editorial
Mail IHT EUobserver
EP Press Release
WSJ
EurActivNew on the Open Europe blog
Open Europe blog
Open Europe blog
Thursday, 31 March 2011
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