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German governing coalition at risk over government support for Greek bailout;
Osborne: “I wouldn’t expect Britain to be involved” in a second Greek bailout
Greek daily To Vima reports that Germany is willing to offer further assistance to Greece, but only under “strict conditions” according to Finance Minister Wolfgang Schäuble. The article also suggests that since Greece has failed to meet the terms of its bailout it may not receive the next tranche of funds on time despite needing them to cover immediate funding gaps.

The front page of Handelsblatt reports that the German coalition government is looking increasingly fragile as more and more MPs reject the possibility of a second Greek bailout. The article notes that "the office of the Chancellor is alarmed" that despite having a 21 seat majority in the Bundestag, the government may not be able to get majority support for a second Greek bailout, or even for the creation of the permanent eurozone bailout fund. German Finance Minister Wolfgang Schäuble has warned that if Germany does not approve the proposed measures it "could endanger the whole European project." Separately, a poll conducted by Forsa has revealed that 70% of Germans believe their government sends too much money to the EU, according to Freitag.de.

Meanwhile, FD reports that Dutch MPs were called back from a Parliamentary recess to have a ‘behind-closed-doors’ session on the state of the Greek crisis.Elsevier reveals that they were told that the Netherlands might have to lend more money to Greece through a second bailout package.

PA reports that Chancellor George Osborne has said that the UK should not be involved in any second bailout of Greece. On BBC Newsnight yesterday Osborne said: "I don't think the issue arises for Britain because the original bailout for the Greeks just involved the eurozone. Britain was not involved in that and I wouldn't expect Britain to be involved again".

The FT reports that Antonio Borges, Director of the IMF’s European department, has called for Greece to extend its privatisation plans, saying the current plan to sell €50bn worth of assets represented “probably less than 20 per cent of all the assets that Greece could privatise”.

Meanwhile, the IMF’s latest report on Europe has warned that problems in the EU could still spread beyond the peripheral economies, it reads: “Contagion to the core euro area, and then onwards to emerging Europe, remains a tangible downside risk” from the eurozone crisis. The report called for “unrelenting” reforms to minimise this risk.
Vima 1 Vima 2 Ta Nea Eleftherotypia Bloomberg Reuters Handelsblatt Der Spiegel Bild FD Elsevier FAZ FT Irish Times Irish Times 2 FT 2 WSJ FT 3 WSJ 2Economist Economist 2 Economist: Charlemagne IMF report El Pais CityAM Independent BBC Sveriges Radio EUobserver Reuters El País Freitag.de

EU interior ministers agree to limited revision of Schengen rules
EU interior ministers agreed yesterday to clarify the conditions under which national governments can temporarily re-introduce border checks within the Schengen area. EU ministers agreed that national governments would not be allowed to re-instate border controls unilaterally, but several countries – including Germany and France – voiced opposition to the Commission being given a greater role in deciding when border checks could be re-introduced, reports the Guardian. The modifications to the Schengen treaty could be approved at next month’s European Council summit, notes the BBC.

At yesterday’s meeting French Interior Minister Claude Guéant said that the decision to re-establish border controls “must not be left to each one’s discretion…We don’t want less Europe, we want more Europe.” Danish Interior Minister Søren Pind said that Denmark is only planning to strengthen customs controls in order to counter criminal activities and will not re-introduce border checks for people, as was reported yesterday. However, Italian news agency AGI reports that European Commission President José Manuel Barroso will send a letter to Danish Prime Minister Lars Lokke Rasmussen, warning that Denmark’s planned customs checks would amount to a violation of EU rules on the free movement of goods and services.

Meanwhile, the Independent notes that Home Secretary Theresa May has made clear that the UK will not participate in an EU-wide ‘burden sharing’ of migrants from Tunisia and Libya.
BBC EUobserver Les Echos FT EurActiv Express Guardian Europaportalen Sveriges Radio IHT Independent Telegraph Le Figaro Le Figaro: Rousselin EurActiv France El País El País: Torreblanca El País: Editorial Le Monde BBC Radio 4: Report AGI

True Finns refuse to join new Finnish government
Yle reports that the True Finns have announced that they will not form part of the next Finnish government, following the decision taken by the Finnish parliament to support the Portuguese bailout. True Finns leader Timo Soini said, “It would have been nice to be part of the government but you cannot betray yourself”, following their election campaign centred on resisting more European bailouts. The True Finns will now be the largest opposition party.
SVD Yle Yle2 Yle3 Helsingin Sanomat FT Reuters EUobserver 2 Le Monde

Sarkozy: France wants to keep the CAP budget “to the euro”
In an interview with AFP, EU Budget Commissioner Janusz Lewandowski argued: “In order to ensure better financing of [numerous EU policies] we need to modify the proportions within the EU budget…The downwards trend of the share of the Common Agricultural Policy (CAP) should continue.” However, Le Monde quotes French President Nicolas Sarkozy saying: “No one must imagine that we will let the CAP be destroyed…My capacity to accept a compromise on this red line is zero plus zero…France wants to keep the CAP budget to the euro.”
EurActiv France Les Echos AFP Le Monde Europolitics

Oborne: British taxpayers may get back only a small fraction of the money they committed to the EU bailouts
On his Telegraph blog, Peter Oborne notes: “The Irish bailout has so far cost Britain some £7bn (more, in fact, as we also loaned them money on a bilateral basis) while Portugal has cost a further £4.2bn, though the final sum has yet to be agreed. It is highly unlikely that the British taxpayer will ever again see more than a small fraction of the money we have committed to these two bankrupt countries”.

In the FT, Simon Tilford of the Centre for European Reform argues: “The EU will try to get away with ‘soft’ restructurings, involving a combination of longer maturities and lower interest rates. But this will not work and by 2013 there will be no viable alternative to ‘hard’ restructurings (default), comprising debt write-downs of 50% or more. Unfortunately, in the case of Greece and Portugal at least, even this will not guarantee continued membership of the euro.”

Writing in FAZ Holger Steltzner argues that "the French model of case by case politically steered decision making has trumped the German one of basing decisions on strict rules” when it comes to eurozone monetary policy.
FT: Tilford WSJ: Mattich FT Editorial FT Letter: Mackie WSJ: Tupy EurActiv: Borrell Telegraph Telegraph blogs: Oborne FAZ: Steltzner Handelsblatt

The FT reports that EU member states have reached a compromise on the proposed regulation of short selling and Credit Default Swaps (CDS). They have agreed to ban naked short selling, but with the provision that the ban can be rescinded if it affects liquidity in markets for government debt, and they agreed not to place any restrictions on the sale of naked CDS.
FT EurActiv

FAZ reports that German Finance Minister Wolfgang Schäuble is now systematically monitoring his staffers faxes, emails and phone calls, following last week’s leaked rumour that Greece would be planning to leave the euro.
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German MEP Silvana Koch-Mehrin has resigned her post as Vice President of the European Parliament following claims she plagiarised her PhD thesis.
BBC

The FT reports that the expected appointment of Mario Draghi as President of the ECB has lead a dispute over the composition of the bank’s leadership, since the ECB’s Governing Board already has another Italian member. Jan Kees de Jager, the Dutch finance minister, said on Thursday his country was reviewing Draghi’s candidacy, saying, “What is important to us is the balance in the ECB board. We are worried about this.”
FT Rheinische Post Leader

Europe’s nuclear safety regulators failed to reach an agreement yesterday on the structure of European nuclear stress tests, specifically on whether they should include terrorist attacks and other man-made disasters. Germany, Italy and Sweden support extended stress tests while France and Britain do not.
EUobserver EurActiv Express

The WSJ reports that new EU regulations will treat information of location as private data, making it equivalent to other personal details, which will mean that companies such as Apple and Google will no longer be able to hold the data indefinitely and may have to make it anonymous.
WSJ