Greek PM survives confidence vote, focus shifts to next week’s austerity vote Open Europe’s Mats Persson appeared on BBC Newsnight discussing the Greek crisis, arguing that Greece will eventually default even with a second bailout package, particularly given the rising political tensions both in core countries (in response to the continuing bailouts) and in peripheral countries (in response to the massive austerity measures). Mats also appeared on BBC Newsnight. Open Europe’s Raoul Ruparel appeared on Bloomberg TV’s Countdown programme this morning discussing the prospects of an eventual Greek default. Open Europe’s finding that by 2014, following a second Greek bailout of €122bn, 64% of Greek debt would be held by the EU/IMF/ECB is cited by various articles in theTelegraph, by Bloomberg, CNBC, Welt, Business Insider, FT Adviser, Zerohedge, by columnist Andrew Alexander in the Mail, Washington Post, San Francisco Chronicle, Isotimia, Les Echos, L'Echo Belgique, De Tijd, Rzeczpospolita and Gazeta GieÅdy Parkiet. In theWSJ, Alen Mattich cites Open Europe’s estimate that by 2014, following a second bailout, each eurozone household will underwrite €1,450 in Greek debt. Raoul is quoted in the Guardian arguing that the EU should at least consider a plan for how a country would leave the eurozone in an orderly fashion. Open Europe’s Pieter Cleppe appeared on Sky TV and Swedish TV SVT, discussing the findings. José Manuel Barroso, President of the European Commission, said that he would bring forward a €1bn payment of EU cohesion funds if Greece passes its new austerity package. Meanwhile, in its latest regular assessment of Spain, released on Tuesday, the IMF praised the current government for cutting the country’s budget deficit, restructuring the banking system and agreeing a draft reform of the pension system. However, the report called for further measures, especially on the “weak productivity growth and the dysfunctional labour market”. MEPs to release secret report on expenses abuses Danish Radio has a feature on Open Europe’s research into the ECB’s exposure to weaker eurozone economies. It quotes the Chief Economist of Sydbank, saying he “fully agrees” which the report’s conclusion that the ECB could need to be recapitalised should Greece default. A YouGov poll for the Sun has found that 48% of British voters would choose to leave the EU, while 35% would vote to stay in. Les Echos reports that, after a new poll showed that opposition to the single currency has reached a record high among the Danes, Danish Prime Minister Lars Lokke Rasmussen has said that it would not be appropriate to call another referendum on Denmark’s euro entry. Commission proposes cutting 5% of EU staff EurActiv reports that, despite a failure to reach a global deal, Commission President Jose Manuel Barroso will push ahead with proposals for a Financial Transaction Tax, from which the EU hopes to raise €200bn for additional spending. Eurozone comment round up On his Coulisses de Bruxelles blog, French journalist Jean Quatremer calls German Chancellor Angela Merkel “the sick man of the euro” and argues: “It was Berlin which, with its hesitations, turned the Greek debt crisis…into the eurozone crisis…One thing is certain: had [former German Chancellor] Helmut Kohl acted the same way, terrified by his public opinion, the euro would have never come to light.” Writing in theWSJ, Spain’s Finance Minister Elena Salgado argues that “Spain's banks aren't going bust. On the contrary, Madrid's financial sector reforms are a model for Europe and the world”. In an opinion piece in the Times, Former Chancellor of the Exchequer Alistair Darling argues, “Far better for the eurozone — and I mean the eurozone, not the EU…[is that] the richer, stronger economies who have benefited from the euro should help out their weaker neighbours…That means making the political argument: if they want a single currency, they’ve got to make it work”. The FT reports that Poland, where 90% of electricity is coal-generated, has blocked attempts to toughen the EU’s carbon emission targets. Meanwhile, the Guardian reports that Conservative MEPs are also opposing the plan, defying the UK Government’s pledges, due to the lack of a worldwide agreement. Conservative Home reports that, following a question by Conservative MP Anne Main, it has been revealed that the Government has no record of the number of non-British EU nationals who claim benefits in the UK. Quoted in Die Welt, Belgian Liberal MEP Guy Verhofstadt warned that “If European governments do not agree to automatic sanctions in the case of new debt, the European Parliament will reject the legislative text reforming the Stability Pact.” In response to the Danish border problem, Commission President Jose Manuel Barroso seeks a temporary solution at community level. EUobserver quotes him, saying that a reintroduction of mutual border controls “would reinforce mutual trust and reduce unilateral measures by member states.” EUobserver reports that EEAS chief operating officer David O’Sullivan said in a conference between EU and Asian leaders on Tuesday, that “We are not going to see a dramatic shift to an integrated [EU] foreign policy for many decades." EUobserver reports that Ukraine's EU ambassador, Kostyantyn Yeliseyev, has said that Kiev will be seeking a stronger "accession perspective" in the preamble to its Association Agreement with the EU. Abandon Ship: Time to stop bailing out Greece?Open Europe Europe
The reshuffled Greek government survived a confidence vote last night, as expected, winning a majority of 155 to 143. However, attention now turns to the more important vote on the new austerity package expected on 28 June, with the pay out of the next tranche of bailout loans by the EU and IMF conditional on the approval of this package. Mass protests continued outside the Greek parliament during the vote and look set to continue until a decision has been reached on the new austerity package. Speaking ahead of the confidence vote, Greek Finance Minister Evangelos Venizelos said he would look to speed up the implementation of the austerity measures and warned the parliament that "the austerity plan and implementing legislation must already be passed [by 3 July] so as to convince our partners that we are serious and credible as a government, as a parliament, and as a country."
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The front page of the Independent reports that MEPs will today order the release of an internal report compiled by the European Parliament’s chief internal auditor Robert Galvin in 2008. The Galvin report details the widespread abuse of expenses by MEPs, who have tried to keep it secret despite an ECJ ruling calling for its disclosure. The report includes examples such as payments made to national political parties and a series of bonuses awarded to MEPs' assistants between three and 19.5 times their normal salary.
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EUobserver reports that the Commission is to propose cutting 5% of jobs in the EU institutions as part of its plans for the next long-term EU budget, due to be unveiled by the end of the month. An EU official is quoted saying, “You could imagine that member states will ask for 10% or more. If you go for 10%, that would harm the functioning of core institutions.”
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Writing in the FT, columnist Martin Wolf discusses four arguments used to support a second Greek bailout arguing, “The question about the prospects for Greece is not whether the country will default…When an outcome is inevitable, it is necessary to plan for it. In this case, that outcome seems to most informed observers inevitable. I can see little merit in having Greece default to the public sector years of agony hence rather than to the private sector soon. The best policy is to act pre-emptively. One aspect of such pre-emption would consist of acting to shore up other fragile eurozone members and financial systems more strongly than now”.
WSJ: Mattich FT: Wolf CityAM: Salter FT: Barber FT: Prat-Gay WSJ Heard on the Street WSJ: Salgado FTD Times: Darling BBC: PestonCoulisses de Bruxelles
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Thursday, 23 June 2011
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