Europe
The debate over Eurobonds continues to rage on ahead of the meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Paris this afternoon. The official line is that the topic will not be discussed. Speaking on the BBC’s Today Programme Peter Altmaier, Chief Whip of the governing CDU, said, “Eurobonds are not an appropriate solution at this very moment…We need to strengthen economic governance first to convince these countries that there is no other way than hard, painful reforms.” Die Welt quotes Deutsche Bank Chief Economist Thomas Mayer warning that Eurobonds would be a “poison pill” for Europe and Germany, especially if the move lacked democratic legitimacy. The FTD reports that Merkel may first try to calm markets before softening her stance towards Eurobonds as long as the political mood allows it. The influential German Exporters Association (BGA) became the first business group to come out in favour of eurobonds yesterday, arguing that, “All alternatives to eurobonds would cost us more money in the end.” Handelsblatt reports that MEPs of the governing CDU party have written and are circulating a dossier in favour of Eurobonds. Both the SPD and the Greens have also come out in favour of Eurobonds. Dutch newspaper AD reports that the Dutch cabinet is considering a proposal establishing a "European IMF", which would have the power to take control of member states’ economic policy, if the majority of eurozone leaders agreed it was necessary. Separately, German growth slowed significantly in the second quarter to 0.1% of GDP, much lower than expected, while estimates for the first quarter of 2011 were also revised down, adding further problems to the eurozone crisis.
New on the Open Europe blogOpen Europe
Tuesday, 16 August 2011
ECB bought €22bn worth of government bonds last week;
CDU Chief Whip: Eurobonds not an appropriate solution at this moment
The ECB announced yesterday that it purchased €22bn in government bonds last week, with the majority thought to be from Italy and Spain, bringing the total amount spent under the ECB’s bond buying programme to €96bn. The figure was higher than expected and could still be increased due to some of the purchases not being settled in time to be included in the figure. Despite the significant purchases, questions still remain over how long the ECB will continue to purchase Italian and Spanish bonds for and how much it is willing to spend. GFS news cites Open Europe’s findings that the ECB has an exposure of €444bn to PIIGS. Writing in FAZ, Economics Editor Holger Steltzner argues that the purchases represent the “downfall of the ECB” and have turned it into a “bad bank”.
CityAM notes that, according to a YouGov poll, 58% of respondents in Germany and 53% in France want Greece to leave the eurozone. The poll also showed that 44% of Germans want Germany to leave the eurozone, compared to 48% who want Germany to stay in.
FT CityAM WSJ Heard on the Street Guardian Telegraph El Pais Expresso Irish Independent Le Monde Le Figaro FT 2 WSJ WSJ 2 EurActiv Reuters Reuters 2 El Pais 2 Irish Times Irish Times 2 Irish Times 3 BBC Today Programme Bloomberg FT 3 CityAM 2 Welt Independent 2 Times Express Independent 3 Sun IHT IHT 2FT 4 FT 5 CityAM 3 WSJ 3 BBC Guardian Times Irish Times 4 Le Monde 2 Le Figaro 2 CityAM 4 Expansion Expansion 2 AD Parool Powned Elsevier Elsevier 2Iex: Sassen van Elsloo Volkskrant NOS TV Telegraaf FAZ RTE FAZ: Stelzner FR DPA Handelsblatt Spiegel SZ HB HB FAZ 2 FAZ 3
Gordon Brown: Eurozone needs full fiscal transfers from rich to poor nations
Writing in the IHT, Gordon Brown argues, “there is no way out except through the biggest recapitalisation of the banks in European history and a wholesale reformation of the euro, which will require the coordination of its monetary and fiscal policy, fiscal transfers from rich to poor nations and a commitment to a common European debt facility.”
In the Telegraph, Ambrose Evans-Pritchard notes that while Chancellor Merkel’s “party's policy elite is willing to consider partial eurobonds up to the Maastricht limit of 60% of GDP but only under stringent conditions. It is clear the German public is in no mood for any such formula.”
FT: Rajan FT: Lagarde City AM City AM: Morrison WSJ: Hannon WSJ: The Source WSJ: Review & Outlook Guardian: Pratley Times: Bremner Times: King IHT: Brown El Pais: Lopez Garrido El Pais: Garcia Montalvo Jornal de Negocios: Lourenço Telegraph: Evans Pritchard Telegraph: Warner
The Express reports that its petition calling for Britain to withdraw from the EU is approaching the number of signatures required to secure a debate in the House of Commons.
The Telegraph reports that the cost of energy saving light bulbs is rising sharply ahead of the EU ban on 60-watt bulbs, which will come into force on 1 September.
A la recherché du temps perdu: a timeline of eurozone meetings
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