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ECB slams EU leaders’ talk of a possible Greek debt restructuring
The ECB yesterday hit back at suggestions from EU leaders that there could be some form of restructuring of Greek debt, highlighting a behind the scenes row between the ECB and European politicians. The FT reports that, earlier this month, Jean-Claude Trichet, ECB President, walked out of a meeting with Jean-Claude Juncker, Prime Minister of Luxembourg, after Juncker brought up the possibility of a ‘soft restructuring’ of Greek debt. Jürgen Stark, another ECB executive board member, warned that following a restructuring, Greek bonds would no longer be eligible for use as collateral in exchange for lending from the ECB – without which the Greek banks would most likely fail. FAZ argues that the ECB is acting in its own self interest as it would face huge losses from a restructuring given its large holdings of Greek debt.
Europolitics reports that, during a debate in Brussels, Deutsche Bank's Chief Economist Thomas Mayer lashed out at the ECB saying that delaying the possibility of restructuring until 2013 was not "credible" and that the EU was "sweeping things under the carpet and sending the bill to the taxpayer".
The Greek press reports that Greek Finance Minister George Papaconstantinou has announced large layoffs in the public sector, a freeze on hiring for 4 years, severe pension cuts and the hiring of private sector firms to oversee the privatisation programme. Separately, Bild reports that the German share of the €700bn permanent eurozone bailout fund (ESM) could be up to €190bn.
FT Irish Times CityAM Expansión Les Echos FT 2 FT 3 Telegraph Reuters 1 Reuters 2 Reuters 3 Reuters 4 Handelsblatt Telegraaf Telegraaf Z24: Nijhous NOS FAZ Eleftherotypia Kathimerini Naftermporiki Vima Nea Guardian SVD IHT Europaportalen Reuters FT 4 Irish Times 2 Irish Times 3 Irish Times 4 Irish Independent Le Figaro WSJ: Smith WSJ: Dalton WSJ: Barley Bild Europolitics Handelsblatt
Dominique Strauss-Kahn resigns as Head of IMF
Following yesterday’s resignation of IMF Chief Dominique Strauss-Kahn, French Economy Minister Christine Lagarde is increasingly emerging as his possible successor, notes El País. Les Echos reports that Dutch Central Bank Governor Nout Wellink has said that ECB President Jean-Claude Trichet would be a “formidable” candidate for the post, while former UK Prime Minister Gordon Brown’s candidacy is losing momentum. An editorial on the front page of Le Monde notes that Strauss-Kahn’s resignation increases uncertainty over the future of the eurozone because it arrives “at a time when [Jean-Claude Trichet] another key tutelary figure of the [European] monetary union is about to retire.”
FT EurActiv European Voice European Voice 2 Guardian BBC BBC: Today EUobserver EUobserver 2 EurActiv France Les Echos Les Echos 2 CityAM El País
EUobserver reports that Norio Maruyama, Japan’s ambassador to the EU, has said that EU Foreign Minister Baroness Catherine Ashton’s proposal to lift the EU’s arms embargo on China was a “mistake” and caused “concern” in Japan.
EUobserver reports that EU member states have agreed to impose a visa ban and asset freeze on Syrian leader Bashar al-Assad and nine other regime members.
On Conservative Home, Martin Callanan, the leader of the Conservative MEPs, writes that two of the EU’s central projects, the euro and the Schengen border-free zone, are in “turmoil”. In reference to the EU budget Callan cites Open Europe’s research on wasteful EU spending.
Open Europe research Conservative Home: Callanan
European Voice reports that France and the UK are leading calls to freeze the EU's 2012 budget. Christine Lagarde, France's Finance Minister, has said any increase in the budget “should certainly not be even at the level” of this year's 2.9% increase on the EU's 2010 budget.
European Voice
The WSJ reports that Polish Finance Minister Jan Vincent-Rostowskihas said that Poland may not adopt the euro by the end of the next term of the ECB President, which is due to expire in 2019. Finance ministry officials had previously discussed the possibility of Poland joining the single currency between 2014 and 2016.
WSJ
The FT reports that eight countries have lodged formal complaints with the Commission, on the grounds of ‘subsidiarity’, over its plans for an EU-wide Common Consolidated Corporate Tax Base.
FT
Yle reports that there are currently six potential members of the next Finnish coalition government. The parties will meet today and tomorrow to begin discussions on forming a coalition, however, given the size of the group no deadline for completion of the talks has been set. Election expert Risto Uimonen is quoted arguing that having six parties in a coalition would make it incredibly difficult to enact a programme for government.
Yle Yle2 Yle3 Helsingin Sanomat Helsingin Sanomat2
A study by the OECD measuring rates of childlessness in women born in 1965 has found that many EU countries have among the highest in the developed world – Italy came top with 24%, followed by Germany and Finland on 20%, and the UK on 19%.
Mail
In the Guardian, Timothy Garton Ash writes that “Only the US has sufficient clout with the Egyptian military to prevent them strangling their country's new democracy at birth [which] cannot, however, grow without access to European markets, education and support across the Mediterranean.”
Open Europe research Guardian: Garton Ash
According to new EU competition rules being drawn up by the Commission, regional and city authorities will no longer face scrutiny for illegal state assistance for small-scale public services such as local cultural centres, swimming pools or crèches.
EurActiv
Writing on Conservative Home, Mark Seddon, the Director of The People’s Pledge, argues for a referendum on EU membership.
Conservative Home: Seddon
The WSJ reports that in a speech to Chinese students in Shanghai yesterday, European Council President Herman Van Rompuy made an indirect criticism of China's exchange-rate policy. “Nonappropriate exchange rates contribute to internal imbalances as [well as] external ones,” he said.
WSJ
A new report published by CONCORD Europe titled, “Challenging Self-Interest – Getting EU aid fit for the fight against poverty” argues that there is a trend in EU aid in which member states’ own interests are put before the goal of eradicating poverty.
Open Europe research SVD ActionAid
ORF reports that the Austrian government has protested against EU’s data retention directive.
ORF
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Half time score on EU short selling regulation: Common sense 1, Political motives 1
Open Europe blog
True Finns continue to rise
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