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EU far from finding solution to Greek crisis;

EU Finance Ministers finalise €78bn bailout of Portugal

On the day when EU finance ministers met to discuss possible solutions to the eurozone sovereign debt crisis German Chancellor Angela Merkel moved to rule out a debt restructuring before 2013 – when the permanent eurozone bailout fund comes into force. Merkel said that restructuring “would raise incredible doubts about our credibility if we were to simply change the rules in the middle of the first programme”, adding that it would discourage investors from buying European government bonds.

However, Jean-Claude Juncker, Prime Minister of Luxembourg, said that allowing Greece more time to repay its debts was a possibility, but only after it had demonstrated more progress at tackling its fiscal deficit and ramping up privatisations. German Finance Minister Wolfgang Schäuble suggested that “If [there was] an extension, then all [debt] would be renewed”, not just official EU loans, adding “[we must avoid] giving relief to private creditors at the expense of the taxpayer.” Austrian Finance Minister Maria Fekter took a stricter line stating that Greece must keep its promises, saying “if you deceived in order to enter the eurozone, now you’ll have to work”, according to Eleftherotypia. Meanwhile, both Juncker and Schäuble confirmed a decision on a second Greek bailout will not be made until the next EU summit at the end of June.

EU finance ministers did yesterday finalise the details of Portugal’s €78bn bailout. The loans will last for seven and a half years and will have an interest rate of 5.7%. The loans will be split equally between the eurozone-only European Financial Stability Facility, the EU-wide European Financial Stabilisation Mechanism and the IMF. The UK liabilities under the package will be £4.2bn (in loan guarantees). A statement by the EU also announced that Portugal would embark on an ambitious privatisation programme.

The Irish Independent quotes the IMF saying that the Irish government has hit all the targets set for it so far under its EU-IMF bailout.
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Merkel already seeking replacement for Strauss-Kahn

Following the arrest of IMF Chief Dominique Strauss-Kahn, EUobserver reports that Germany is pushing for the IMF chairmanship to remain in European hands. German Chancellor Angela Merkel is quoted saying: “I think that in the current situation, when we have a lot of discussions about the euro, Europe has good candidates to offer." Merkel’s statements have been criticised by Luxembourg’s Prime Minister Jean-Claude Juncker, who said: “As long as [Strauss-Kahn] has not stepped down – and I'm not suggesting he should – I don't want to comment on it. I think it's indecent that some governments already started this morning that debate.” Several candidates have already been put forward as Strauss-Kahn’s possible successor, including former German Finance Minister Peer Steinbrück, Poland's Central Bank Governor Marek Belka and French Economy Minister Christine Lagarde.   
FT FT: Munchau WSJ: Hannon EUobserver El País Le Monde Evening Standard Irish Times Handelsblatt Handelsblatt 2 FAZ: Welter TVP Gazeta Wyborcza FT: Stephens New Statesman: Reid-Henry

UK and Germany want to limit powers of EU financial supervisor

FTD reports that a conflict is brewing in the EU over the newly created European Securities and Markets Authority (ESMA), with Germany and the UK concerned that it may be taking on too much power. The newspaper has seen a confidential discussion paper by member states which argues in favour of giving member states the final decision over which derivative contracts need central clearing – at the moment this decision rests with ESMA. However, it‘s unclear whether the UK and Germany have enough support from other member states to block the proposal, which will be decided by majority voting.
Open Europe research FTD

In an interview with Italian newspaper Libero, Italian Foreign Minister Franco Frattini has said that Italy is in favour of giving the EU a single permanent seat in the UN Security Council.
Libero: Frattini

La Repubblica reports that yesterday Italian Central Bank Governor Mario Draghi’s candidacy for the ECB Presidency was given unanimous backing by eurozone finance ministers. Draghi’s appointment will almost certainly be confirmed at next month’s summit of EU leaders, as there are no other candidates running for the post.
Il Sole 24 Ore Repubblica Le Monde EurActiv France WSJ WSJ Editorial European Voice

Following more criticism of Baroness Ashton’s record as head of the EU’s External Action Service, the EEAS’s Chief Operating Officer David O’Sullivan said that the EU's ability to speak with one voice on foreign policy was ultimately dependent on member states, and that the EEAS could only act as a "facilitator", adding that “the high representative has difficulty expressing a common European view if one doesn't exist”.
EUobserver

De Standaard reports that European Council President Herman Van Rompuy has thanked Chinese President Hu Jintao for Chinese support during the Eurozone debt crisis, saying: "I express my appreciation for the strong trust which China has shown in the eurozone, both through direct investments as through the policy of investments of reserves".
Standaard

The Tax committee of the Swedish Parliament has announced that it is opposed to European Commission proposals for a Common Consolidated Corporate Tax Base (CCCTB). This follows similar announcements last week by the UK and Germany. 
Riksdagen Press Release

According to Yle, the Social Democrats are ready to join the next Finnish government, but want to include the Left Alliance – the fifth largest party – to get a wider support for its policies. Jyrki Katainen, in line to be the next Finnish Prime Minister, welcomed the Left Alliance to join government discussions. A final decision on who will form the government is expected on Wednesday.
Yle

The European Commission has stated that the Swedish border checks are in line with EU laws since they are neither systematic nor permanent, in response to claims by the Danish government that it is merely replicating Swedish border checks, according to Politiken. Meanwhile, EUobserver reports that Danish officials are willing to meet with Brussels officials to discuss its proposed border checks and to bring them in line with EU law.
EUobserver Politiken Politiken2 Sydsvenskan

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