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Domestic political feud threatens to derail Portuguese bail-out talks
The political feud between the two leading parties in Portugal reached new heights over the weekend, ahead of the visit of EU, IMF and ECB officials to negotiate the bail-out on Tuesday. José Sócrates, Portugal’s caretaker Prime Minister, argued on Sunday that the opposition party had no policies, only “a box of surprises full of vague ideas and empty words”. The leading parties had agreed to negotiate the bail-out together in order to guarantee cross party consensus, however, Socrates and Pedro Passos Coelho, leaders of the governing and main opposition party respectively, are said to barely be on speaking terms.

It is widely reported that the €80bn bail-out will involve significant austerity measures and labour market reforms, as well as a privatisation scheme to raise funds. Meanwhile, UK Shadow Chancellor Ed Balls suggested that the UK should not contribute to the bail-out of Portugal, despite the agreement being signed by the outgoing Labour government. Balls said “I think this is a crisis of the eurozone and the clear bulk of the financing should come from the eurozone.”

Der Spiegel reports that Professor Markus Kerber, who has already challenged the legality of the previous bail-outs in the German Constitutional Court, will now take the same course of action over the Portuguese bail-out. Open Europe’s Raoul Ruparel appeared on LBC on Sunday discussing the Portuguese bail-out and the future of the eurozone.

On the Spectator Coffee House blog, Open Europe’s Mats Persson argues that more bail-outs are not the “solution to the problems of the eurozone as a whole. It is finally starting to dawn on people that a large amount of the debt circulating the system will never realistically be repaid…All this means that the government is putting British taxpayers’ money on the line, but the UK remains exposed to meltdowns in the eurozone in future. This is the worst of all worlds. Rather than propping up this failing bail-out orthodoxy, the UK needs to push – strongly – for a restructuring of Portuguese debt, in combination with a recapitalisation of exposed banks and a limited cash injection.”

Eurozone finance ministers continue to play down fears that Spain may be the next country to need a bail-out. “The risk of contagion has lessened…Not that our worries have passed, but we're on the right track" German Finance Minister Wolfgang Schaeuble said Saturday. However, writing in the FT, Wolfgang Munchau argues that Spain will need a bail-out eventually due to the “high external indebtedness, the fragility of the financial sector and the probability of further declines in asset prices”.

According to a poll published by Bild am Sonntag, 50% of Germans are in favour of the Portuguese bail-out while 45% are against, in addition 90% of respondents expect other countries to need a bail-out.
FT WSJ Irish Times WSJ:Stelzer City AM FT:Munchau WSJ 2 Irish Times 2 Guardian Diario Económico Jornal de Negocios BBC EUobserver EUobserver 2 Le Monde: Tusk Irish Independent Les Echos EUobserver: Waterfield BBC: Hewitt Irish Independent: Creaton Spectator: Persson Il Sole 24 Ore Sunday Irish Independent Times Times 2 Times 3Times 4 FT Weekend FT Weekend 2 Telegraph El Pais FT Weekend 3 Telegraph 2 FT Weekend 4 Mail on Saturday SunTelegraph:Heffer Telegraph:Montgomerie Saturday's Express Saturday's Express 2 AFP Independent on SundayIndependent on Sunday: McRae Sunday Times Sunday Times 2 Sunday Times 3 Sunday Telegraph Observer Sunday Times: Leader Sunday Telegraph: Lilico Sunday Telegraph: Stevenson Telegraph: Bootle Dow Jones HandelsblattBloomberg

Germany considers reinstating border controls with Italy over policy on African migrants;
France and Italy to launch joint sea and patrols

German officials have raised the possibility of reinstating border controls following Italy’s threat that it would issue temporary travel visas to around 25,000 migrants who have arrived from Africa, reports Deutsche Welle. France announced that it will launch joint sea and air patrols with Italy to help prevent boats arriving. El País quotes Italian PM Silvio Berlusconi saying that, in the absence of a concrete response from the EU, “it is better to separate from each other so that everyone can follow his own fears and egoisms”. La Stampa quotes Italian Interior Minister Roberto Maroni saying, “We’ll see if European unity and solidarity do exist, or if Europe is only a geographical expression.”

Meanwhile, at a press conference on Friday, the head of EU border control agency Frontex, Ilkka Laitinen, said that Frontex will seek to strengthen its capabilities, which could include having its own ships and helicopters and developing "crime prevention” strategies, such as screening migrants to identify suspected criminals.
Deutsche Welle BBC La Stampa Il Sole 24 Ore Sky Italia Straneuropa EUobserver Le Monde: Editorial EurActiv.fr El PaisEl Pais 2 El Pais: editorial Europa Press

Germany’s regional banks likely to fail EU stress tests

The European Banking Authority unveiled on Friday the details of the new round of EU-wide stress tests in which 90 European banks will participate. As expected, the core Tier One capital ratio has been set at 5%, lower than the 6% imposed on Irish banks during Ireland’s national stress tests. German regional banks – the Landesbanken – are among the institutions most likely to fail the tests, since the EBA has announced that its definition of “capital” will exclude most of the so-called “silent participations”, a type of subordinated debt provided to Landesbanken by German state governments.FAZ reports that German Finance Minister Wolfgang Schäuble has said that German banks which fail the tests will not get any money from the Government.
FT Alphaville WSJ EurActiv European Voice FT Weekend Telegraph Times Handelsblatt: Leader FAZ

NRC Handelsblad reports that a new EU proposal to recognise rulings of judges in all EU member states is facing resistance in the Dutch Parliament, over concerns that Dutch citizens may be subject to wrong or corrupt rulings.
NOS

A referendum on whether Iceland should repay the money which the UK and Dutch governments paid out to cover potential public losses from the collapse of Icesave, was rejected by the Icelandic public for a second time. Britain will now sue Iceland for failing to pay the debt, while the vote could create difficulties for Iceland in its bid to join the EU and the eurozone, reports SVD and the Mail.
Independent SVD FT EurActiv European Voice EUobserver Mail El Pais

MEPs have voted against a series of measures which could have seen salaries frozen and travel allowances cut, reports the Telegraph. Spanish daily ABC cites Open Europe in an article noting that the annual cost to taxpayers of MEPs and their staff moving to the European Parliament’s second seat in Strasbourg every month is about €200m.
ABC Telegraph

The BBC reports that a study by 200 European experts has revealed that nitrogen pollution from farms, vehicles, industry and waste treatment is costing the EU up to £280bn a year. According to the report, livestock farming is one of the biggest causes of nitrogen pollution and agriculture as a whole produces 70% of the nitrous oxide emissions in Europe.
BBC

Commission review highlights flaws of European Arrest Warrant
The Sunday Telegraph reported that the European Commission’s third review of the European Arrest Warrant (EAW) – to be published this month – has acknowledged that the system has "remaining imperfections, notably when it comes to its implementation at national level". According to the report, problems with the EAW include "detention conditions in some member states combined with sometimes lengthy pretrial detention for surrendered persons.” The article also quoted EU Justice Commissioner Viviane Reding noting that the EAW “has been used effectively to catch criminals but it's meant for major crimes, not for someone who has stolen a bicycle.”
Sunday Telegraph

Writing in the Sunday Telegraph, Christopher Booker compares “the futility of wind farms with the ongoing collapse of the euro” and argues: “When we embark on a course of action which is unconsciously driven by wishful thinking, all may seem to go well for a time, in what may be called the ‘dream stage’. As reality presses in, it leads to a ‘nightmare stage’ as everything goes wrong, culminating in an ‘explosion into reality’, when the fantasy finally falls apart”.
Sunday Telegraph: Booker

The German government has announced that, if requested, it will take part in a humanitarian mission in Libya as part of an EU force.
Coulisses de Bruxelles Economist: Charlemagne blog Deutsche Welle IHT

The Sunday Express reported that the cost of long-haul flights are expected to increase as flights that land and depart from EU airports will be covered by the EU’s Emissions Trading Scheme (ETS) from January 2012, adding an estimated £1.24bn to the industry’s costs in 2012.
Sunday Express

The European Commission is expected to publish the Single Market Act on Wednesday. The act will, among other initiatives, revive the idea of ID cards, reports EurActiv.
EurActiv European Voice

The Telegraph reports that migrants from EU member states are committing more than 500 crimes a week in Britain, yet EU rules on freedom of movement only allow the deportation of those sentenced to at least two years in prison, after serving the sentence.
Telegraph

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