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IMF Chief arrested ahead of key eurozone meeting;
Greek, Irish and Portuguese debt forecast revised upwards
The arrest of Dominique Strauss-Kahn, Head of the IMF, over the weekend has created widespread confusion ahead of today’s talks on the Portuguese bailout and the ongoing Greek crisis. The talks are expected to continue as planned with Deputy Managing Director Nemat Shafik taking Strauss-Kahn’s place. The meeting should yield a final decision on the Portuguese bailout but a decision is not expected on a possible second Greek bailout.
The FT reports that tensions are already mounting between the IMF and the socialist Greek government over the privatisation plan of €50bn of state assets. The IMF is pushing for a wider scope and an accelerated timetable, while there is also talk of the EU potentially taking over the process, all of which are seen as politically unacceptable for the Greek government. Die Welt reports that, according to IMF sources, parts of the organisation are unsure whether a second Greek bailout would be the correct decision. The article quotes an IMF negotiator saying, “there is disappointment about the Greek reform program, about the failing privatisation and about the failure to reduce the deficit."
Kathimerini reports that the next tranche of Greek aid cannot be paid out since Greece has failed to meet the original bailout conditions and that a new set of criteria will need to be drawn up and approved to ensure that Greece can access the funding. Meanwhile, Het Financieele Dagblad reports that the Netherlands has threatened to halt this process if Greece does not succeed in significantly cutting its budget deficit. Separately, Bild reports that a secret German government working paper suggests that the permanent eurozone bailout mechanism could cost Germany €100bn if it was used to capacity.
On Friday, the EU released its spring economic forecast, highlighting the expected debt and deficit levels EU member states. The figures show that the predicted debt levels for Greece, Ireland and Portugal are now much higher than previously forecast. Meanwhile, the data also highlighted the significant divergence in economic growth between France and Germany and the peripheral economies.
FT FT 2 WSJ EUobserver BBC: Hewitt Coulisses de Bruxelles Le Figaro Telegraph Guardian Guardian 2 Times Irish Times Sunday Telegraph Independent on Sunday FT 3 FT 4 Express WSJ 2 WSJ 3 WSJ 4 BBC El País Saturday’s Guardian Saturday’s Mail Saturday’s Telegraph Saturday’s Express Reuters Sunday Telegraph 2 Kathimerini Vima Naftemporiki Welt Telegraaf FT Weekend FT Weekend 2 FT Weekend 3 FT Weekend 4 Saturday's Mirror Der Spiegel Open Europe blog
Bloomberg reports that the EU’s statistics body Eurostat has revealed that the controversial currency swaps which Greece undertook with Goldman Sachs in 2001 actually involved 13 different contracts and amounted to a loan of €2.8bn, making them much more numerous than originally thought. The ECB has also moved to dismiss a lawsuit by Bloomberg seeking the disclosure of documents showing how Greece used these swaps to hide the true extent of its debt problem.
Bloomberg Zero Hedge
In a letter to Danish Prime Minister Lars Lokke Rasmussen, European Commission President José Manuel Barroso has warned that an infringement procedure could be opened against Denmark if the Danish government pushes ahead with plans to re-introduce permanent customs controls at its borders with Germany and Sweden.
Le Monde Saturday’s Guardian Saturday’s Mail Saturday’s Independent Saturday’s Independent Sunday Telegraph: Alexander Politiken Politiken2 SVD Dagens Nyheter
Pressure mounting on Ashton to step down as EU Foreign Minister
The Sunday Times reported that European ministers, diplomats and other officials are challenging the authority of Baroness Ashton, the EU’s Foreign Minister, “in the hope of driving her from office.” The article noted that French President Nicolas Sarkozy is said to have confronted her over her statements about the Franco-British initiative in Libya and Steven Vanackere, the Belgian Foreign Minister, this month said Ashton had prepared a “rather disappointing” analysis of foreign policy challenges.
Sunday Times
Iain Martin: Euro crisis presents an historic leadership opportunity for David Cameron
In Saturday’s Mail, Iain Martin argued that, “In the wake of the euro crisis, the EU will be split in two and have to be reshaped in some way…Surely we can wish our neighbours luck with their project while, as the head of the non-euro group, demanding a much looser set of arrangements for ourselves…The euro crisis is creating a great deal of frightening uncertainty – but it also presents an historic leadership opportunity for David Cameron.” Saturday’s Telegraph argued that, in the wake of the eurozone and Schengen crises, “Europe is back on the agenda with a vengeance.”
Writing in the Sunday Telegraph, Martin Vander Weyer, Business Editor of the Spectator, argued that the EU “urgently needs two things: a strategy to deal with the debt crisis in which no options are ruled out, and a new set of leaders.”
Saturday's Mail: Martin Saturday’s Telegraph: Editorial WSJ: Stelzer Saturday’s Times: Editorial FT Weekend: Editorial Sunday Telegraph: Weyer Independent: King FT: Editorial WSJ: Editorial FT: Munchau SVD
UK and France at odds over European Parliament’s Strasbourg seat
Le Monde reports that Prime Minister David Cameron and Lib Dem leader Nick Clegg last week wrote a letter to the leaders of Conservative and Lib Dem UK MEPs, Martin Callanan and Fiona Hall, pledging to take the issue of reducing European Parliament sessions in Strasbourg to next month’s meeting of EU leaders. In response, France has complained about the UK Government’s “inimical and aggressive gesture.”
The Parliament Le Monde
The Sunday Express reported that Tim Farron MP, the president of the Liberal Democrats, has said Britain’s relationship with the EU had become so “poisonous” that voters deserved the chance to express their views in a referendum on membership of the bloc.
Sunday Express
FT Weekend reported that UK Treasury Minister David Gauke told the House of Commons that the UK will not support German-backed plans for the creation of a single, publicly owned European credit rating agency.
FT Weekend
The Sunday Express reported that the European Arrest Warrant is costing taxpayers over £90m a year in extra policing costs.
No link
Stern reports that ECB President Jean-Claude Trichet has warned that Western countries are not sufficiently prepared for a new financial crisis, saying that “citizens won't allow a second time that governments spend 27% of GDP in order to prevent a breaking down of the financial system.”
Stern
An article in the WSJ notes that the EU’s accession to the European Court of Human Rights could be used to the advantage of defendants in antitrust cases against the European Commission to overturn fines for anti-competitive behaviour.
WSJ
EUobserver reports that China has announced that it will retaliate against the European Commission’s decision to impose anti-subsidy duties on Chinese exports of high-end glossy paper used for magazines and catalogues.
EUobserver FT WSJ
The EU is considering broader economic sanctions against Belarus after a Minsk court sentenced opposition leader Andrei Sannikov to five years in prison, reports the WSJ.
EUobserver WSJ
UK
The BBC reports that David Cameron personally intervened in the setting of new UK carbon reduction targets due to be announced tomorrow. In a concession to business, it has reportedly been agreed that the targets will be reviewed if European nations backslide on their own climate commitments.
BBC
The Sunday Telegraph noted that David Cameron has been told by Conservative Party members in a new poll to sort out the economy, stand up to Europe and take a hard line on immigration if he wants to win an outright majority in 2015.
Sunday Telegraph
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