Monday, 1 August 2011

Open Europe

Europe

Spanish election to be held on 20 November

Spanish Prime Minister José Luis Rodríguez Zapatero announced on Friday that a Spanish general election will be held on 20 November. Zapatero had planned to serve out his full term until March 2012, but with the government looking like it may fail to garner enough parliamentary support to pass its next budget, he was forced to call an election. As planned, Alfredo Pérez Rubalcaba will replace Zapatero as leader of the Socialist party in the run up to the election. A recent poll conducted by Metroscopia and published by El Pais on Sunday put the centre-right party Partido Popular, currently in opposition, 14 percentage points ahead of the governing Socialist party with 44.8% of the vote.

Labour Peer calls for renegotiation of free movement of labour in EU
Labour Peer Baron Maurice Glasman, an adviser to Labour leader Ed Miliband, has called for the renegotiation of rules on European workers and a possible freeze on inward migration for EU and non-EU citizens, except when a case is made for a specific, skilled individual. “We’ve got to re-interrogate our relationship with the EU on the movement of labour. The EU has gone from being a sort of pig farm subsidised bloc ... to the free movement of labour and capital. It’s legalistic, it’s administrative, and it’s no good. So I think we’ve got to renegotiate with the EU”, he said.

Dutch Finance Minister confirms additional €35bn guarantee for ECB under second Greek bailout
FD reports that Dutch Finance Minister Jan Kees de Jager wrote a private letter to the Dutch Parliament last week detailing an additional €35bn guarantee in the second Greek bailout package. De Jager confirmed that eurozone states have promised to provide a temporary guarantee of €35bn for the ECB, on top of the €109bn bailout, for as long as Greece is declared to be in ‘selective default’ by the rating agencies. The money will be used as collateral to allow Greek banks to continue borrowing from the ECB without the central bank having to accept defaulted Greek bonds as collateral. De Jager admitted he did not highlight this part of the package earlier out of fear of spooking financial markets.

In an interview with FAZ, German Finance Minister Wolfgang Schäuble has said that he “will definitely” get a majority in the Bundestag for the new bailout package. On the question of whether the EU is turning into a transfer union, Schäuble argues that “EFSF and ESM are completely different things to eurobonds. We do not harmonise interest rates or debt risk”. Schäuble also said, “There must be a European public and it must be willing to transfer powers to EU level. I hope there will be a directly elected EU president in the near future.”

In an interview with the FT, Christine Lagarde, Director of the IMF, admitted that eurozone leaders had made mistakes in communication which may have harmed the markets during the debt crisis, saying, “we did not communicate [the new Greek bailout] in a harmonised fashion, nor did we particularly speak with one voice”. In the interview Lagarde confirmed that the IMF will take part in the second Greek bailout but refused to put a figure on how much it would contribute to the costs of the package.

The WSJ reports that François Pérol, Chairman of the French Banking Federation, has suggested that French banks and insurers could lose €3bn from their contribution to the second Greek bailout. The Times reported on Saturday that RBS could face a write down of £800m from the package, as it will have to mark its holding of Greek sovereign debt to market prices, currently around 50% of nominal value. Separately, an article in Le Monde reports that France and other eurozone countries are considering giving European Council President Herman Van Rompuy the chairmanship of future summits of eurozone leaders.

The Mail reports on a study by the House of Commons Home Affairs Committee, which warns that the EU immigration squad, the Rapid Border Intervention Team (RABIT), is unable to send immigrants back, unless they can prove where they have come from. “They cannot act to intercept migrants until they have already crossed the border into Greece, and they cannot send them back”, notes the report. The cost of the RABIT team was put at £4.15m, by the time it left Greece in March.

The House of Commons Home Affairs Committee has released a report warning that Turkey’s accession to the EU would pose serious risks to the security of EU external borders and make member states more vulnerable to organised crime. The report argues that Turkey must demonstrate “clearly and objectively” that it’s met stringent criteria set by the EU for the management of its frontiers before it can join, reports Bloomberg.

The FT reports that the Commission will today unveil a set of new co-financing rules which should help reduce the cost of accessing the EU’s cohesion funds for some of the struggling peripheral economies.

AFP notes that, at an informal meeting in Poland on Friday, 24 of 27 member states have agreed to use the Commission’s draft 2014-2020 EU budget as a basis for future negotiations, with the UK, Sweden and Hungary reportedly opposed.

Regulations on small businesses raising equity finance will be eased from today, as deregulatory amendments to the EU’s Prospectus Directive became law yesterday.
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A new online petition to demand a referendum on the UK’s EU membership was launched by the Express on Saturday. The paper today reports that more than 25,000 people signed up to it over the weekend.

The Guardian reports that research from the New Economics Foundation has revealed that UK fishermen have been forced to discard almost £1bn of cod since 1963 to comply with EU fishing quotas.

The Commission has proposed that citizens of the Russian enclave of Kaliningrad should be allowed to travel without a visa in a 30 to 50 km zone inside Poland and Lithuania.

World

US President Barack Obama announced last night that US congressional leaders had agreed on a preliminary deal to raise the US government’s borrowing limit, although the deal still has to be approved by both the Senate and the House of Representatives.

New on the Open Europe blog

And they're off! What will the Spanish elections mean for the eurozone and the UK?

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Posted by Britannia Radio at 19:43