William Hague: “We must be vigorous, energetic and active” in order to make the most of EU membership Ashton to table proposals for EU military HQ Meanwhile, Saturday’s Telegraph noted that Ashton has been accused of orchestrating a “mealy-mouthed” approach to human rights in China in collusion with European governments desperate for the country to purchase eurozone debt. Questions marks over credibility of stress tests as eight banks fail; The tests have come under widespread criticism for failing to factor in potential sovereign defaults and for employing apparently optimistic scenarios. The WSJnotes, for example, that the worst-case scenario for Portugal envisioned an 11.6% unemployment rate this year, rising to 12.9% in 2012. However, unemployment in Portugal is already at 12.4%. Writing in CityAM, Banking reporter Juliet Samuel argues, “The inconsistency in the tests’ disclosure has added to a sense that sovereign debt has been treated far too optimistically by the EBA while other assets have been treated too harshly”. Writing in the WSJ, columnist Simon Nixon argues, “Europe's dithering politicians need to decide quickly whether to bail out countries or recapitalise the entire banking system in the aftermath of multiple sovereign defaults. If the stress tests help focus minds, they won't have been in vain”. Dutch Poll: 49% of Dutch citizens wants Netherlands to leave the euro with Germany Meanwhile, the debate over the introduction of Eurobonds continued this weekend, with Irish Deputy Prime Minister Eamon Gilmore calling for their introduction yesterday. However, Jens Weidmann, Bundesbank President, warned that such a move would “endanger solid budgetary policies” and that “the German taxpayer would need to pay for the whole of Greek debt”. Elsevier reports that a poll conducted by Dutch pollster Maurice de Hond has shown that 49% of Dutch citizens want the Netherlands to leave the euro, along with Germany, while 54% oppose more bailouts. A survey of 49 economists by the WSJ found that 48 believed that Greece would need to restructure its debt, while over half agreed that the ECB’s credibility has been damaged by its actions during the eurozone crisis. Journal de Negocios reports that the Portuguese government will need to find an extra €2bn by August after a hole in the budget was found, it is expected that some of the money will come from an income tax surcharge. Open Europe’s Raoul Ruparel is quoted in El Mundo and El Economista saying that if Spain’s cost of borrowing crosses the 7% threshold, there could be a “pressure spiral which will automatically end in a further increase in borrowing costs”. Treasury estimates UK faces an extra £3bn in cuts under Commission plans for increased EU budget Trevor Kavanagh: “Europe is racing up the agenda like a political tsumani” Writing in the FT, former US Treasury Secretary Larry Summers argues, “European authorities must restate their commitment to solidarity as embodied in a common currency and recognise that the failure of any European economy is unacceptable.” Meanwhile, in the Telegraph, Ambrose Evans-Pritchard argues, “If a euro break-up was properly planned and handled, with all back-stop measures in place, it might prove less traumatic than assumed.” The FT looks at the possibility and consequences of Greece leaving the eurozone, suggesting it would be a very messy process both economically and legally, and that it may legally be easier to leave the whole EU than just the eurozone. Business lobby group CBI has warned listed companies to do more to recruit women to board positions and to improve transparency on gender diversity, or face possible EU quotas, reported the Sunday Telegraph. The warning comes ahead of the Financial Reporting Council's (FRC) consultation on whether to change the UK Corporate Governance Code, to ensure improved gender diversity. The Sunday Times reported that the EU is investigating whether the Government bailout of Royal Mail gave it an unfair advantage over competitors in the market and was therefore in breach of EU competition law. The Mail on Sunday reported that the European Parliament will vote in October on whether to harmonise Coastguard actions around the EU. The WSJ reports that China has secured its biggest legal victory at the WTO after its Appellate Body deemed that the EU’s application of antidumping tariffs to imports of certain metal fasteners from China was illegal. FT reports that the head of the European Securities and Markets Authority, Steven Maijoor, has warned that the fund industry risks intervention unless it adjusts its approach to product development. Stress Test 2011 – Initial resultsOpen Europe Europe
Writing in the Sunday Telegraph, UK Foreign Secretary William Hague argued that, “My core views on Europe have not changed: we should be in the EU but not run by the EU.” He added, “If we are going to make the most of the advantages of our membership we must be vigorous, energetic and active in the conduct of our policy…Besides the opportunities the EU offers we must be equally determined and persistent in dealing with the problems of its own making.” He also welcomed the passage of the European Union Act, which introduces referenda for major transfers of power from Britain to the EU. “This law hands back democratic control of the way the EU is developing to the British electorate,” he wrote.
Sunday Telegraph Sunday Telegraph: Hague
The Sunday Times reported that EU Foreign Minister Baroness Ashton will challenge UK Government policy today by outlining a proposal for a permanent EU military headquarters that would “command and control” future European civilian and military campaigns. EU diplomats say one option being considered in order to soften Britain’s opposition is to house the headquarters in the UK and claimed that it could initially be staffed by 250 officers and crisis management experts. Open Europe Research Director Stephen Booth was quoted on page two saying, “Creating a new EU headquarters would simply be a distracting attempt to paper over the deep-seated divisions in EU foreign policy, which show no signs of going away. It would potentially threaten Britain’s primary military alliance, which remains with the United States via Nato.” Stephen is also quoted in the Express.
Open Europe events Sunday Times Express
16 banks close to failing
Eight banks failed the European Banking Authorities’ (EBA) stress tests, released on Friday - five banks from Spain, two from Greece and one from Austria, making a combined capital shortfall of €2.5bn. A ninth bank, German regional bank Helaba was also expected to fail, but pulled out of the tests last week. 16 banks were close to failing. The WSJ reports that Spanish, Italian and French banks are the most exposed to peripheral eurozone countries, through loans to individuals and businesses. However, the results per country are not uniform as Spain and Italy’s leading banks were the strongest performers in the tests, reports the FT.
FT WSJ European Voice Irish Times FT 2 EurActiv WSJ Review&Outlook FT: Davies FT Editorial WSJ Heard on the Street CityAM CityAM 2 CityAM: Samuel IHTIHT 2 FTD Figaro Sunday Telegraph Sunday Telegraph 2 Mail on Sunday Sunday Times Saturday’s Times Saturday’s Times Saturday’s Mail Saturday’s Independent Saturday’s Independent: O’Grady Saturday’s Telegraph Saturday’s Guardian Saturday’s Guardian: Elliot FT Weekend FT Weekend
Eurozone leaders will hold an emergency summit on Thursday in Brussels in an attempt to finalise a deal on a second Greek bailout. German Chancellor Angela Merkel has agreed to attend but only if “there is a result”, meaning negotiations over private sector involvement need to be completed by Wednesday. Despite Merkel’s insistence, the WSJ reports that the summit may lead to only a preliminary agreement. Die Welt reports that the second bailout could additionally involve some form of bank levy to raise more funds, according to unnamed sources. The article suggests that the IMF is not keen to be involved in any future Greek bailout, partly due to the on-going divisions between EU leaders. In an interview with the FTD, Jean-Claude Trichet, ECB President, reiterated his stance that the ECB will not accept defaulted Greek bonds as collateral and warned against private sector involvement in the second Greek bailout, further highlighting divisions between the ECB and eurozone leaders.
FT WSJ EurActiv FT Weekend Sunday Independent Sunday Telegraph Observer Observer 2 Sunday Telegraph 2 Sunday Times Guardian Guardian 2 Irish Independent Irish Independent 2 Times Saturday’s Telegraph Figaro Figaro 2 FTD FTD 2 FTD 3 FTD 4 FTD 5 European Voice CityAM Yle.fi Yle.fi 2 DN.se FT Weekend 2 ARD Interview Merkel Handelsblatt Leader Handelsblatt Handelsblatt 2 Elsevier Irish Times Welt Spiegel Bild FT 2 FTfm WSJ 2 WSJ 3 WSJ 4 Irish Times 2 European Voice 2 WSJ 5 MA Welt 2 Welt 3 Journal de Negocios El Economista
Saturday’s Telegraph reported that the Treasury has calculated that Britain could face an extra £3bn in spending cuts and an additional 1% in VAT if the Commission’s proposed increase to the 2014-2020 EU budget becomes a reality. Open Europe’s Stephen Booth was quoted in the Mail saying, “There is no justification for an increase, especially when so much of Brussels’ budget is poorly and wastefully spent.”
Saturday’s Mail Saturday’s Times
Writing in the Sun, Trevor Kavanagh argues, “So can Britain bask safely on the sidelines as the eurozone implodes? The answer is No…Europe is racing up the agenda like a political tsunami.” In the Mail on Sunday, James Forsyth argued that, “If the eurozone countries did move towards a fiscal union, it would provide an opportunity for Britain to negotiate a looser relationship with Europe. Cameron has decided he will not be prevented from seizing this chance by the pro-European views of his Coalition partners.”
Mail on Sunday: Forsyth FT: Summers FT: Mackintosh FT: Dizard FT: Munchau WSJ: Stelzer WSJ Heard on the Street Telegraph: Bootle Telegraph: Evans-Pritchard Sunday Times Guardian: Burke Times: Emmott FT Weekend: Giles FT Weekend: Lloyd
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Mail on Sunday
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Monday, 18 July 2011
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