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FSA Chief: New UK finance watchdog “essentially a supervisory arm of a European regulatory regime”
City AM reports that Financial Services Authority CEO Hector Sants yesterday unveiled the new Prudential Regulatory Authority, which will take over a portion of the FSA’s functions next year. Sants said that the PRA would be “essentially a supervisory arm of a European regulatory regime”. He added that the PRA will try to influence regulations through dialogue with the European Banking Authority (EBA), one of the EU’s three new financial supervisors, but many in the City have questioned how effective the UK’s lobbying effort can be while its regulatory bodies are being overhauled.
Open Europe research City AM
France and Germany at odds over permanent eurozone bailout mechanism;
Spanish local elections could reveal pile of ‘hidden debt’
The FT reports that France and Germany are at loggerheads over the role of private creditors in potential sovereign defaults under the regime establishing the European Stability Mechanism (ESM), the eurozone’s post-2013 permanent bailout fund. Germany is insisting that the treaty establishing the ESM contains a legal requirement which states that the ESM must include some form of private sector involvement in any disbursement of financial aid, with France pushing for a political rather than legal agreement. Germany is reportedly supported by Austria, Finland and the Netherlands, while France has the backing of the rest of the eurozone countries.
The WSJ reports that EU leaders are not backing down in their row with the ECB over potential restructuring of Greek state debt, as they believe the ECB will not fulfil its threat to stop accepting Greek debt as collateral if there were any form of restructuring as such a move would bankrupt Greek banks and threaten financial stability.
A new journal article from CQ Global Researcher, titled “Future of the Euro”, cites Open Europe’s briefing on a Portuguese bailout and quotes Open Europe’s Raoul Ruparel saying: “Greece and Ireland are already bailed out and look like they won’t be able to finance themselves next year,” meaning that a debt restructuring is the only real long term solution. Meanwhile, EUobserver reports that the local elections in Spain, expected to result in a heavy defeat for the governing Socialist party, will also expose a pile of 'hidden debt' held by regional and municipal authorities, adding billions of euros to Spain’s official debt figures.
FD reports that the Greek crisis has led to a clash in the Dutch Parliament between Dutch Prime Minister Mark Rutte and Geert Wilders, whose PVV party supports the minority government despite being in opposition, with Wilders calling for the Dutch government to stop sending money to Greece. The article suggests that the row ultimately risks bringing down the minority government.
Meanwhile, The Parliament reports that UKIP MEP Marta Andreasen has urged the Commission to explain where the money will taken from should a country fail to pay back loans given by the €60bn European Financial Stabilisation Mechanism, which is backed by the EU budget and therefore all member states.
FT FT 2 WSJ Telegraph WSJ 2 CityAM Economist Welt: Leader FAZ: Leader FT 4 FT 5 EurActiv Irish Independent Les Echos EUobserver 2 FD Powned TV Telegraph: Warner WSJ: Mattich WSJ: Fidler WSJ: Philippe EUobserver
EUobserver reports that thousands of protestors continue to take to the streets in Spain ahead of this weekend’s regional and municipal elections to express their disillusionment with the political establishment, and to protest against political corruption and extremely high rates of youth unemployment in particular.
El País El Mundo EUobserver IHT FT 3
Speaking at a debate in Brussels on Wednesday, German Finance Minister Wolfgang Schäuble noted that “the problem is that EU institutions are disconnected from citizens. They are perceived as distant and technocratic. We need to continue to reach out to citizens, but not in bureaucratic Brussels speak.”
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Emerging economies oppose European IMF Chief;
FAZ: Why is Germany not supporting a more market-friendly voice than Lagarde?
EUobserver reports that a number of emerging countries – including Brazil, Turkey, Russia and China – have voiced opposition to a European succeeding Dominique Strauss-Kahn as IMF Chief. Turkish Ambassador to the EU Selim Kuneralp is quoted saying: “The feeling of a desire for change among the emerging economies is evident and obvious. People do not want to continue with this sharing of posts between the US and Europe."
Meanwhile, Les Echos reports that German Finance Minister Wolfgang Schäuble has said that the EU will soon present a single candidate for the IMF top post. Support is building for France’s Economy Minister Christine Lagarde. After Sweden’s Finance Minister Anders Borg, yesterday Italian Prime Minister Silvio Berlusconi also said in a communiqué that Lagarde would represent “an excellent choice,” while the FT quotes German government officials saying that Lagarde is considered “a good candidate” in Berlin.
In the Independent, Sean O’Grady notes: “Impressive as she is, [Christine Lagarde] is, I think, like the other European candidates, too steeped in the EU establishment and too much part of the French elite to be able to abandon the euro as an article of faith. For a clear-headed, dispassionate Singaporean, let us say, the decision on recommending that Greece leaves the euro would be a much less traumatic affair.” A leader in FAZ asks "Why Lagarde?" and argues: "She's the main advocate of unlimited state bail-outs. Why is Germany not supporting a more market-friendly voice?"
EUobserver BBC BBC: Mason BBC: Flanders Coulisses de Bruxelles Independent Independent : McRae Le Point Le Figaro Le Figaro 2 Le Figaro: de Capèle Libération EurActiv France FT WSJ FT 2 Reuters Italia Les Echos Les Echos 2 Telegraph Independent: O’Grady Times Irish Times Times: Wheatcroft CityAM: Heath Guardian: Kettle Guardian FAZ: Göbel Wiwo
Discussing the UK’s aid and development spending on the BBC’s Question Time programme, former Labour Home Secretary Jack Straw argued that, while the majority of funding went to good causes, there had to be greater transparency for the benefit of taxpayers, and that “there is a big question mark about how some EU aid has been spent and some of what is called general budgetary aid.”
BBC: Question Time Open Europe Research: Aid Open Europe Research: ENP
Les Echos reports that Norway has decided to freeze the remaining 235m Kroner of a 248m Kroner (more than €30m) grant for environmental and health projects to Greece, arguing that the Greek government has failed to comply with the conditions attached to receiving the money.
Les Echos
The Express reports that the EU’s proposals to restrict the use of plastic shopping bags by introducing either a ban or a tax have been criticised by retailers.
Express
The Times reports that a cross-party group of more than 30 MEPs will call for a ban on European financing, through the European Investment Bank, of mining projects in protest at Glencore’s operations in Africa.
Times
The FT reports that, despite changes to the UK’s rules on tax avoidance in 2006, the European Commission has said that “the UK is still not complying with EU law on freedom of establishment and free movement of capital.” This could mean the UK being taken to the ECJ.
FT
Ta Nea reports that a 2007 leaked telegram from US Secretary of State Condoleezza Rice shows that Americans were instructed to approach EU Economic and Monetary Affairs Commissioner Olli Rehn, who was Commissioner for Enlargement at the time, in order to pursue a US agenda with strong emphasis on Turkey’s accession to the EU.
Nea
New on the Open Europe blog
Is the European Stability Mechanism another €700bn bazooka pointed in the wrong direction?
Open Europe blog
Proposal to relax EU state aid rules: Some common sense from the Commission
Open Europe blog
Swedish Finance Minister explains why Gordon Brown is not fit for IMF chairmanship… Ouch!
Open Europe blog
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