Europe Berlusconi: “Today it’s our turn, tomorrow it can be Paris’s turn”;
Italian daily Il Messaggero features comments made by Italian Prime Minister Silvio Berlusconi during private conversations with Italian ministers. According to the paper, Berlusconi said, “They [the ECB, French President Nicolas Sarkozy and German Chancellor Angela Merkel] have decided to intervene in favour of our bonds to save themselves, not Italy.” He went on, “If the green light of individual countries is needed before the ECB can intervene, that means that the ECB is not yet, as it should be, the autonomous, authoritative and independent governor of the euro area. If it must be said, as Trichet did, that in return for an intervention in favour of our bonds a political ‘yes’ was needed, then we have evidence of the fact that we’re far away from a communitarian governance which can scare speculators. And if today it’s our turn, tomorrow it can be Paris’s turn.” In an interview with Le Monde, Belgian Finance Minister Didier Reynders argues in favour of fiscal union, adding, “I understand the reluctance of my German colleague [Wolfgang Schäuble], whose country will be the lender of last resort. He calls for the reinforcement of budgetary orthodoxy and wants its rules to be observed by everyone, because the inaction of certain countries can affect the entire eurozone. Is this a ‘loss of sovereignty’ then? Yes, but it’s the only solution”. Meanwhile, EurActiv reports that eurozone leaders are divided over whether to hold an emergency summit and what the focus of such a summit would be. Spanish Finance Minister Elena Salgado suggested yesterday that a summit would be held in the “first days of September”, but this was later rejected by Commission officials. The FT reports that German Chancellor Angela Merkel faces increasing calls from within her governing coalition for an emergency party conference or even an emergency parliamentary session to discuss the eurozone crisis. German Vice Chancellor Philip Roesler yesterday called for a eurozone ‘stability council’ to be set up and given the powers to impose sanctions on profligate members. German government officials later denied that this was a government proposal. With the spotlight on France’s triple-A rating increasing, French Budget Minister Valérie Pécresse said yesterday that France "won't deviate one iota from its public-finance balancing plans", adding that France will “make more efforts” if necessary. French President Nicolas Sarkozy has convened an emergency meeting with members of his government to discuss the crisis today.
WSJ columnist: Germany and its solvent neighbours should leave the euro
In Il Sole 24 Ore, Italian economist Guido Tabellini writes, “The ECB should be brave enough to radically change its monetary policy, by decreasing interest rates again and announcing a general programme to support eurozone government bonds.” However, he notes, “The ECB is constrained by the straitjacket of a mandate which is inadequate in the exceptional circumstances we are going through. And to a large extent, the German public opinion hasn’t understood (or doesn’t want to understand) the urgency and unsustainable nature of the current situation.”
A leader in FAZ criticises a Commission proposal to compensate farmers if their incomes are 30% lower than previous years as a result of the E.coli crisis. It argues that by “socialising major losses through agricultural policy…is a step back to the 1980s…the European Commission says goodbye to the plan to treat farmers in the EU as entrepreneurs.”
European Voice reports that, according to officials in Brussels, the EU is preparing tougher sanctions against the Syrian regime with several more of its government officials expected to have their assets frozen and have travel bans imposed.
The EU yesterday increased economic sanctions on Libya.
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Eurozone leaders divided over need for emergency summit
The WSJ reports that the ECB continued purchasing Italian and Spanish debt yesterday, helping to keep their cost of borrowing down. The level of purchases is unknown, but reported to be a few billion euros. Despite this, there are signs that European banks are increasingly reluctant to lend to each other and instead prefer to deposit cash with the ECB, with overnight deposits on Monday reaching a record high for the past year. Austrian Central Bank Governor Ewald Nowotny warned, "This is not a good sign".
WSJ WSJ 2 CityAM IHT Independent FT FT 2 European Voice Guardian El Pais EurActiv Italian government’s press review FT 3 WSJ 3 El Pais 2 Expresso BBC EUobserver IHT Le Monde: Reynders Le Figaro Les Echos Reuters AFP FTD Le Monde Le Point Le Parisien La Stampa Repubblica Corriere della Sera Telegraph Le Figaro Les Echos Le Monde
Writing in the WSJ, columnist Holman Jenkins argues, “Germany and its solvent neighbours should do the decent thing and leave the euro zone”. A separate op-ed in the WSJ warns, “[Italian Prime Minister Silvio] Berlusconi and [Italian Economy Minister Giulio] Tremonti have their work cut out to upend Italy's perverse incentives before creditors demand premiums that Rome can't pay. The alternative leads to austerity, default and, eventually, to Athens.”
WSJ: Review & Outlook WSJ: Mingardi European Voice: Gros Telegraph: Lilico Telegraph: Evans-Pritchard Irish Times: Lane Irish Times: King WSJ: Jenkins FT Editorial Times: Kaletsky FT: Sandbu FT: King Expresso: Gomes Ferreira Corriere della Sera: Rizzo & Stella La Stampa: Lepri Repubblica: Spinelli Il Sole 24 Ore: Tabellini Il Sole 24 Ore: Tilford Il Sole 24 Ore: Folli
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Thursday, 11 August 2011
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