In an interview with the FT, Chancellor George Osborne said that he was “very worried” about the eurozone crisis but emphasised that he has faith in the eurozone’s ability to “get a grip” on the crisis. Osborne also suggested he is attempting to balance taking part in negotiations with keeping “Britain out of the Greek mangle”. Crucially, he also said, “I think we have to accept that greater eurozone integration is necessary to make the single currency work and that is very much in our national interest…We should be prepared to let that happen.” Shadow Chancellor Ed Balls accused Osborne of showing a lack of leadership over the debt crisis, adding that Britain has a “direct interest in getting this call right”. Anthony Browne: National parliaments across Europe are dumping “their Euro-federalist baggage” Commission’s draft rules on bank capital limit national regulators’ flexibility to set national standards Eurozone comment round-up In an op-ed in Les Echos, the leader of France’s Front National Marine Le Pen argues that the only solution to the eurozone debt crisis is “the restoration of monetary freedom. It will allow states to pursue an exchange rate policy adapted to their needs, to the benefit of exports and growth.” In City AM, Anthony Browne warns: “If the wheels come off the euro bandwagon, then we will suffer from the economic shockwaves. Eurozone leaders are going to be looking for scapegoats to punish – and there will be none more delicious than those Anglo Saxon bankers. The crisis is a eurozone problem, but the consequences will be ours.”Open Europe Europe
New on the Open Europe blog
Thursday, 21 July 2011
Germany and France reach “common position” ahead of eurozone summit;
Osborne: “Greater eurozone integration necessary” and in UK’s “national interest”
Following a meeting last night, German Chancellor Angela Merkel and French President Nicolas Sarkozy are reported to have reached a “common German-French” position on the second Greek bailout, according to Merkel’s spokesman. The position is said to have been supported by ECB President Jean-Claude Trichet, while Reuters reports that German officials have confirmed that the ECB will accept a ‘selective default’ if the EFSF, the eurozone bailout fund, is allowed to purchase government bonds. Details of the agreement have not yet been revealed, but reports suggest that the idea of a bank levy has been dropped, at least for now, since it would take a significant amount of time to enforce. Instead private sector involvement will focus on the German plan for a bond swap, with the new bonds having a 30 year maturity and much lower interest rates. The WSJ reports that the overall size of the second bailout will be similar to the original bailout of €110bn, citing officials close to the negotiations. FTD and Bild report that, in an off the record comment yesterday, Sarkozy said that "German egoism is criminal" and that Germany “lacked solidarity” on the euro.
Kathimerini reports that, according to data released by the Greek Finance Ministry yesterday, Greece missed its budget target for the first six months of 2011 by €2.5bn. The shortfall came from a fall in revenues due to the larger than expected recession and increase in social security grants. Meanwhile, the WSJ reports that Cyprus may need external financial aid following an explosion at the country’s largest power station and the spread of contagion from Greece. Separately, the Irish Independent reports that the ECB has been seeking consultations over how to deal with the Irish banking crisis but has refused to comment on the reason for this. Open Europe’s finding that the ECB has an exposure of €444bn to weaker eurozone economies is cited by the Mail and Euronews.
FT WSJ EurActiv CityAM Irish Independent IHT Irish Independent 2 Élysée website BBC EUobserver Straneuropa Le Monde Le Figaro Les Echos Guardian Guardian 2 Times Times 2 Telegraph Irish Times El Pais Público.pt Standard Standard 2 FTD Expansion El Pais 2 Jornal de Notícias El Pais 3 Les Echos 2 Le Parisien Il Sole 24 Ore Corriere della Sera Le Monde ORF Reuters Libération 20minutes.fr Europe1 FT 2WSJ 2 European Voice WSJ 3 Mail European Voice 2 Telegraph 2 FT 3 FT: Osborne interview Standard 3 BBC EUobserver 2 Independent Le Figaro 2 Les Echos 3 BBC: Today BBC: Today 2 Il Sole 24 Ore 2 WSJ 4 FT 4 FT 5 Guardian 3 Euronews Irish Times Irish Times 2 Irish Times 3 FTD 2 FAZ FAZ 2 FAZ 3 Die Welt Handelsblatt FAZ 4 Boersen Zeitung Irish Independent 3 Kathimerini Le Figaro 3 Les Echos 4
In the Spectator’s front page story, Anthony Browne notes that the “euro crisis has prompted national parliaments across the continent to dump their Euro-federalist baggage”. Citing examples throughout Europe, including the Slovakian, Swedish, Finnish and Dutch parliaments, Browne notes that, “The modern way to defend one’s national interests is to defy the EU – and to hell with the consequences.” Open Europe Director Mats Persson is quoted saying, “The EU is coming up against the full force of parliamentary democracy.” The article concludes, “Across the EU, euroscepticism has gone mainstream. National parliaments are starting to find their voice – and deciding that they just can’t continue standing by while their powers evaporate to the EU…The euro crisis is a disaster for the European economy – but it could be the saviour of European democracy.”
No link
The European Commission yesterday unveiled draft proposals for new EU-wide bank capital rules, which the FT notes would require banks to hold top quality capital equal to 7% of their assets adjusted for risk. The proposal, which now moves on to negotiations between member states and MEPs, is likely to be subject to heated debate, because in its current form it would set both minimum and maximum capital requirements. Some countries – including the UK – are still fighting for the flexibility to introduce national requirements that are higher than the EU standards.
An FT editorial argues, “The nature of Europe’s banking sector militates against a one-size-fits-all approach. Not only do the risks posed by banks vary from country to country: the capacity of member states to support their banks when things go wrong also differs hugely. In these circumstances, it makes sense for member states to be allowed to impose higher capital standards where necessary.” The proposal also sets down new liquidity requirements and binding leverage ratios.
On the FT’s A-list blog, former EU Commissioner Mario Monti and French Liberal MEP Sylvie Goulard argue that “there is growing consensus that it would be difficult to find a lasting solution to the eurozone crisis without the use of eurobonds.” In an op-ed in Le Monde, Barclays Capital Managing Director Raoul Salomon argues: “This debt crisis is a formidable opportunity for the European construction. A generation of politicians imagined monetary union, another one must imagine budgetary integration.”
A leader in the FTD argues that “Merkel has not taken a firm stance for months- every action is tested and tweaked on national level…Merkel’s government always hides behind illusionary and remote ideas-like the involvement of private creditors, which lead to problems that extend the duration, scope and costs of the crisis.”
El Pais: Bassets El Pais: Vidal-Folch Expansion: Quemada Clariana Expansion: Schwartz Times: Leader Times: Cavendish Times: FlemingGuardian: Pratley Guardian: Garton Ash John Redwood's diary BBC: Mason BBC: Hewitt BBC: Flanders Independent: Leader Independent: Prosser Telegraph: Evans-Pritchard Telegraph: Balls Telegraph: Hannan FT: Munchau FT: Stiglitz FT: Cramme FT: Monti WSJ: Mackie&Fuzesi WSJ Heard on the Street WSJ: Smith WSJ Review&Outlook CityAM: Browne Irish Independent: O'Donovan Mail: Booker Le Monde: Tétreau Le Monde: Salomon Le Figaro: Sales Les Echos: Le Pen FTD: Genscher FTD
Elsevier reports that Dutch Finance Minister, Jan Kees de Jager, has told the Dutch Parliament that France has conceded that the European Commission should automatically be able to impose sanctions on member states that breach budget rules, without the need for any political intervention.
The House of Lords European Union Economic Affairs Committee published a report on Wednesday attacking European plans to ban credit ratings of sovereign debt as a “wholly impractical idea” which “smacks of censorship”.
The Telegraph reports that King Albert II of Belgium has warned that over a year of political squabbling between Flemish and Walloons has threatened to break up his country and endanger the future of the EU.
Euractiv reports that Greece will attempt to sidestep EU competition law and rush through a draft gambling bill aimed to speed up the privatisation of state assets, such as the state lottery, and increase revenue potential.
EUobserver notes that a yearly report by the European Commission found that corruption in Bulgaria and Romania was not being addressed properly as both countries have a judiciary that is either prone to taking bribes or too slow to convict corrupt judges.
The BBC reports that Serbia has arrested the last remaining fugitive war crime suspect, Goran Hadzic, bringing it one step closer to EU membership.
The EU has tightened rules on the disposal of radioactive waste, introducing strict conditions on exporting it outside EU borders.
Anglo-Saxons don’t know whether they’re coming or going: Commission waters down the new Basel rules on bank capital
Missing the target…again: the eurozone’s misguided bank levy proposal
Posts
