Europe
Attention turns to France on rumours of downgrade and bank instability Il Corriere della Sera reports that the Italian government will hold an emergency meeting to agree on a new set of austerity measures on 16 August. Additionally, Italian Finance Minister Giulio Tremonti will present the Italian government’s plans to introduce a balanced budget rule in the Italian Constitution to MPs today. Separately, De Telegraaf reports that Dutch MPs on the Finance Committee will return from recess early to clear up the details of the second Greek bailout and discuss the crisis. This could lead to all Dutch MPs being recalled. Fitch downgraded Cyprus yesterday bringing it to within two notches of junk territory. The rating agency cited the budget challenges and debt pressures as the main reasons for its downgrade, adding that it expected external financial assistance to be forthcoming. Meanwhile, citing poor private sector participation in the second bailout plan, Greek officials suggested they may include Greek bonds maturing up to 2024 in the plan, later than the original threshold of 2020, in order to meet the savings targeted from the proposal.
GFS News reports that the Council of Mortgage Lenders, based in London, says measures put forward by the European Parliament's Economic and Monetary Affairs Committee to tighten mortgage lending regulations will have “serious implications” for the market if implemented.
New on the Open Europe blog
Open Europe
Thursday, 11 August 2011
The eurozone crisis threatened to turn to France yesterday, with the shares of leading French banks suffering huge falls. Italian bank shares also decreased significantly, on rumours of an imminent French downgrade or a large French bank, Société Générale in particular, going bust. French President Nicolas Sarkozy held an emergency meeting with his finance and budget ministers, urging them to come up with credible deficit cutting plans as soon as possible, while also publicly reiterating his government’s willingness to reduce the deficit quickly. However, this was not enough to calm markets immediately, with French bond spreads over bunds reaching record eurozone highs. All three leading credit rating agencies did stress that France’s triple-A rating was stable yesterday, while Société Générale strenuously denied all of the rumours surrounding the bank’s future. Markets seem to have responded this morning, with French bank shares recovering some of their losses from yesterday, while it is also widely reported that the rumours now look unfounded.
In an op-ed on Dutch news site De Dagelijkse Standaard, Open Europe’s Pieter Cleppe writes that "the idea that a number of loans could contain the situation is becoming discredited. Only two alternatives seem to remain: a break-up of the currency union, or the creation of a transfer union." Writing in the FTD, International Politics Editor Ines Zöttl calls for a referendum on further eurozone integration.
FT CityAM IHT EurActiv EUobserver Le Figaro BBC WSJ Telegraph ORF FT 2 WSJ 2 Times Telegraph 2 Mail Independent AFP WSJ 3 WSJ: Heard on the StreetGuardian Irish Times Irish Times 2 Independent Guardian 2 IHT 2 IHT 3 Telegraph 3 Times Express Independent 2 Le Parisien Le Monde L'Expansion Le Figaro 2Corriere della Sera Le Monde: Attali Repubblica FT: Das FT: Plender Times: King Times: Clark BBC: Peston Guardian: Pratley Le Monde: Goulard Le Figaro: SalinIl Sole 24 Ore: Masciandaro Il Sole 24 Ore: Forquet Corriere della Sera: Battista La Stampa: Deaglio De Dagelijkse Standaard: Cleppe WSJ Reuters BloombergHandelsblatt Fistfulofeuros WSJ 4 Le Figaro 3 Le Figaro 4 Le Figaro 5 Le Figaro 6 Novinite Euractiv.de Telegraaf
The Guardian reports that the UK's shipping industry is rejecting calls for shipping to be included in the EU’s emissions trading scheme. Mark Brownrigg, the UK Chamber of Shipping's Director General, claimed that if shipping were to be included ships would simply refuel at non-EU ports instead.
In the Spectator, Daniel Knowles argues that “Euroscepticism is becoming an all-party force, united in disgust at Europe’s inefficiency, profligacy and anti-democratic elitism.”
No link
The German government criticised Denmark yesterday over its plans to build new installations on its border with Germany in a bid to tighten customs procedures. Werner Hoyer, German Europe Minister suggested that the move contravened EU law on open borders and free movement.
The EU has said that it cannot rule out taking punitive measures against Russian officials unless the case of the alleged murder of Sergei Magnitsky is properly investigated.
When “more austerity” is easier said than done: divisions emerge in the Italian governing coalition over additional austerity measures
Posts
