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New poll: True Finns the biggest party following its decision not to partake in government over Portugal bail-out
Following the decision by the True Finns not to take part in a new Finnish government, over disagreement about the country’s contribution to the Portuguese bail-out, the party now has support from 22.4% of the population according to a recent poll, making it the largest party for the first time, reports Yle. Separately, Yle reports that the exact composition of the new coalition government in Finland will be announced this afternoon, with the Left Alliance – the fifth largest party which is taking part in the talks – saying that it remains opposed to the bail-out of Portugal.
Open Europe blog Helsingin Sanomat Yle Yle2 Vasabladet

Eurozone leaders admit there could be a restructuring of Greek debt
Following a two day meeting, eurozone leaders have for the first time publicly admitted that a Greek debt rescheduling or ‘soft’ restructuring – an extension in the time Greece has to repay its debts – may be possible, but only after Greece demonstrates further progress and conviction with its economic reform programme. Jean-Claude Juncker, Prime Minister of Luxembourg, said, “If Greece makes all these unpleasant efforts...then we’ll have to see whether we can’t proceed to a soft restructuring of Greek debt, [but] I am opposed to a large restructuring.” Olli Rehn, EU Economic and Monetary Affairs Commissioner, confirmed this, saying “a voluntary extension of loan maturities…could be examined”.

Reuters reports that, according to Greek government sources, the government would be open to a rescheduling of Greek debt. The FT notes that, to investors, a rescheduling is no different to a default, based on the standard definitions. PA reports that ECB Chief Economist Jürgen Stark told a conference that a Greek restructuring would be a "recipe for catastrophe", and blamed "vested interests" in Britain and the US for fuelling market pressure on the country.

Meanwhile, To Vima reports that the leading Greek opposition party, which has been vocally opposed to the government’s economic reform programme, is coming under international pressure to create a political consensus on how to tackle the crisis. The paper also reports that German Chancellor Angela Merkel will push Greece to increase its retirement age in line with the rest of Europe and reduce the holidays which workers receive, saying, “workers in Greece, Spain and Portugal cannot be retiring earlier than in Germany”, adding, “we cannot have a single currency yet some take lots of holidays and others very few”.

The Irish Times reports that Irish Finance Minister Michael Noonan has warned that the EU is risking the success of the Irish bailout programme by not reducing the interest rates charged.
FT FT 2 Irish Independent Nea Eleftherotypia Vima CityAM Reuters EurActiv European Voice Independent El País IHT IHT 2 Telegraph Irish Times Reuters Handelsblatt Handelsblatt 2 FT 3 FT 4 Irish Times Irish Independent 2 FT Editorial FT: Wolf WSJ: Nixon Irish Independent: Myers Irish Times: Editorial Irish Times: Beesley Irish Times: O'Brien IHT: Davidoff Guardian: Elliot FAZ FAZ: Seltzner

De Telegraaf leads with the story that Geert Wilders has accused the Dutch government, to which his PVV party offers qualified support, of “scaremongering” over the extent to which the Dutch economy is exposed to the Greek debt crisis in order to gain public support for the bailout.
De Telegraaf

Ashton says EU aid policy in the Mediterranean will be “bigger, bolder”;
Military chiefs join Liam Fox in putting pressure on UK’s aid budget
EUobserver quotes EU Foreign Minister Cathy Ashton saying that she is working on a new strategy to support the EU’s southern neighbourhood in North Africa and the Middle East. “It's new, it's bigger, it's bolder. It will, I hope, be a recognition that the European Union takes its responsibilities in its neighbourhood seriously,” Ashton said.

Deutsche Welle quotes Open Europe’s Pieter Cleppe saying, “The EU has spent over €13bn between 1995 and 2013 on funding in the region but it consistently put [its own] security ahead of democracy.” The article cites Open Europe’s report on EU aid to its Mediterranean neighbours, which noted that the now-toppled regimes in Egypt and Tunisia were allocated a combined total of €169m in budget support, representing around 80% of the EU's overall funding for those countries. This, despite Commission demands that any recipient should meet “strict” criteria on good governance and administration.

Meanwhile, the Times reports that senior British military figures have backed Defence Minister Liam Fox’s criticism of David Cameron’s plans to enshrine Britain’s foreign aid spending in law at 0.7% of GDP. Cameron told MPs that he would not back down from the promise he made in Opposition. “It is the Government’s policy, it will happen,” he said. The UK currently spends around 18% of its aid budget via the EU.
Open Europe research Open Europe research 2 Times Times: Thomson DW EUobserver

EurActiv reports that yesterday EU finance ministers finalised the deal reached last week to ban naked short-selling on shares and bonds but not Credit Default Swaps (CDS). However, member states can ask for the ban to be lifted if it is seen to bring down liquidity in government bond markets. The proposal will now form the basis for a discussion in the European Parliament which is likely to seek for stricter controls on CDS.
Open Europe research FT EurActiv European Voice Reuters

Denmark to demand a rebate from next long-term EU budget
Berlingske reports that Danish Prime Minister Lars Løkke Rasmussen has written to European Commission President José Manuel Barroso, saying that Denmark will demand a rebate worth €940m (7bn Danish kronor) from the next long-term EU budget, due to run from 2014 to 2020. Unlike Sweden, the UK and the Netherlands, Denmark doesn’t have a rebate from the EU budget at the moment.
Berlingske

The FT reports that EU Internal Market Commissioner Michel Barnier has said that he plans to insert tough new liquidity measures for banks in the EU’s new Capital Requirements Directive, which will implement the global Basel III banking regulations.
FT

Il Sole 24 Ore reports that Italian Economy Minister Giulio Tremonti has threatened to veto the reviewed version of the EU Directive on the taxation of savings income unless sanctions for governments and operators who “systematically” fail to comply with EU rules are introduced.
Il Sole 24 Ore Europolitics

The European Commission is set to propose a package of measures aimed at boosting the protection of EU citizens who become victims of crime in another member state, aiming to stop the discrimination of victims on the basis of their nationality.
El País EurActiv

The Express reports that the European Investment Bank, set up to aid development in the EU and emerging nations, has issued a £11m loan to revamp a four-star, beach-front complex in Morocco owned by wealthy foreign bankers. Because the loan is ultimately underwritten by member states, if it is not paid back, UK taxpayers will be liable for 16%. However, if the project succeeds, the repayments will go to the EIB.
Express

UK

UK Energy and Climate Secretary Chris Huhne yesterday announced ambitious climate targets of reducing carbon emissions to 50% of 1990 levels by 2027. The Times notes that the plans will allow the Government to scrap the new emissions target within three years if other European countries fail to take similar action.
EUobserver Independent Times Telegraph Guardian: EditorialMail

World

Pressure mounts on IMF Chief to resign
It is widely reported that pressure is mounting on IMF Chief Dominique Strauss-Kahn to quit following his arrest over an alleged sexual assault in New York. US Treasury Secretary Tim Geithner has said that Strauss-Kahn “is obviously not in a position to run the IMF.” Austrian Economy Minister Maria Fekter also said yesterday that "considering the situation, that bail was denied, [Strauss-Kahn] has to figure out for himself that he is hurting the institution." Spain’s Economy Minister Elena Salgado suggested that Strauss-Kahn should think about the “extraordinarily serious” nature of the charges and make his decision accordingly.
BBC EUobserver El País Guardian FT WSJ

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The True Finns continue to rise
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Open Europe blog