Europe Handelsblatt reports that a leaked confidential paper by German Finance Minister Wolfgang Schaeuble suggests that the Bundestag should have limited control over the EFSF, the eurozone’s bailout fund, and should only be allowed to approve the framework of the fund rather than being involved in its decision making process. The article argues that, “Parliamentarians who until now had sovereignty in all monetary questions will be pushed into the role of mere spectators.” Confusion continues to reign over the status of the Greco-Finnish collateral deal, with Finnish Prime Minister Jyrki Katainen suggesting yesterday that his country could withdraw from the second Greek bailout if they did not receive any collateral guarantees, he said, "It is our parliament's decision that we demand it as a condition for us joining in”. German Chancellor Angela Merkel reportedly said, in a meeting with her governing Party, "It can't be that one country gets extra collateral," casting further doubt on the Finnish position. FAZ reports that Merkel also ruled out the use of gold as collateral as requested by some members of her party. Additionally, the IMF opposes the deal since it challenges its status as senior creditor, according to the WSJ. German criticism of the ECB continued with the German President Christian Wulff saying, “I consider the massive buying of individual countries’ bonds by the European Central Bank legally questionable…this can’t work out in the long run and can at best be tolerated on a transitional basis.”
UK New on the Open Europe blogOpen Europe
Wednesday, 24 August 2011
Zapatero announces plan for constitutional debt limit;
Germany and IMF not keen on Greco-Finnish collateral deal
Spanish Prime Minister José Luis Rodríguez Zapatero and Mariano Rajoy, leader of the opposition Partido Popular, yesterday agreed to insert a limit on the level of public debt and deficit into the Spanish constitution. With widespread support it is hoped the law can be passed before the parliament is dissolved on 27 September, ahead of general elections. El Pais reports that the plan led to thousands of people on twitter calling for a referendum to be held on the issue.
French Prime Minister François Fillon will disclose the details of a new austerity package in a press conference this afternoon, with savings worth around €4bn this year and €10bn in 2012 expected to be announced. Separately, Italy’s biggest trade union, CGIL, has called a general strike for 6 September, in response to the latest austerity package.
FT WSJ Le Monde El Mundo El Pais El Pais 2 El Pais 3 IHT Reuters FT 2 CityAM European Voice CityAM 2 WSJ 2 European Voice 2 Telegraph El Pais 4 El Pais 5 Reuters 2 Irish Times Irish Times 2 Irish Times 3 FT 3 WSJ 3 EUobserver La Tribune Le Monde Le Figaro Les Echos La Tribune 2 Le Figaro 2 Le PointL’Express Il Sole 24 Ore Corriere della Sera Repubblica RTP Pravda Presse Slovak Spectator Kurier Zeit Berliner Zeitung Suddeutsche Suddeutsche 2Suddeutsche 3 Handelsblatt Handelsblatt Leader FAZ Handelsblatt 2 Handelsblatt 3 Kathimerini L’Express 2 Handelsblatt 4 FAZ 2 Expresso Kathimerini 2 YLEYLE YLE HS TS
NATO and EU look at releasing aid and unfreezing overseas Libyan assets
NATO and EU officials said yesterday that they have initiated talks to secure an international agreement to release aid and unfreeze overseas Libyan assets, ahead of an expected end to the conflict. EU Foreign Minister Catherine Ashton said that the EU is committed to sending medicine, fuel and other aid to Libya. Other EU plans include helping to organise elections, setting up a court system, reforming the police, advising on economic reform and funding media and interest groups. Ashton will participate in a Cairo group meeting on Friday along with officials from the African Union, the Arab League, and the Organisation for Islamic Co-operation. On Conservative Home, Roger Helmer MEP argues, “We mustn't conflate a successful Anglo-French mission in Libya with a success for the EU.”
Spiegel’s Political Editor Roland Nelles writes, “Germany wanted nothing to do with NATO's military mission in Libya. Now that autocrat Moammar Gadhafi appears to be on his way out, however, it looks as though Chancellor Angela Merkel guessed wrong…the development highlights a bitter foreign policy failure.”
WSJ WSJ 2 EurActiv EUobserver Economist: Bagehot Le Figaro Le Figaro 2 FT Editorial European Voice Conservative Home Trend Spiegel: Nelles
German Constitutional Court to be taken to the European Court of Human Rights
The German Constitutional Court has announced it will present its ruling on the challenge against the eurozone bailout on 7 September. Meanwhile, Die Weltreports that the Europolis Group, of 55 German entrepreneurs, including German Professor Markus Kerber has announced that they will take the German Constitutional Court to the European Court of Human Rights in Strasbourg for refusing to rule on certain questions in their legal challenges against the eurozone bailouts. Kerber is quoted saying that: "in this legal challenge it's not just about the euro, but about democracy and the rule of law."
Eurozone comment round-up
In the FT, Richard Milne argues, “As Keith Wade of Schroders deliciously points out, Europe has had a form of pseudo-Eurobonds in the recent past. After the single currency was introduced in 1999, interest rates for all countries soon converged to that of the strongest, Germany, and stayed there until about 2007. In fact, many of the smaller countries briefly saw their borrowing costs duck below those of Berlin. This loose form of Eurobonds, of course, laid the foundations for the current eurozone crisis.”
In an op-ed in Il Sole 24 Ore, former European Commission President Romano Prodi and Italian economist Alberto Curzio Quadrio propose the creation of a European Financial Fund (EFF), which in turn would issue Euro Bonds. They argue, “Assuming the capital paid up to the EFF is of €1,000bn, each EMU member state will have to confer in addition to gold, other assets like bonds and shares assessed at real market values and not at devalued market values,” adding that “the EFF, with €1,000bn of paid up capital could issue €3,000bn of Euro Union Bonds with a leverage of 3 and a 10-year (and beyond) duration at an interest rate of 3%.”
FT Editorial FT: Milne Mail: Alexander Times: Kaletsky Times: King Irish Independent: Oliver Irish Independent: McWilliams Le Monde: Stroobants Il Sole 24 Ore: Bastasin Le Figaro: Minc Il Sole 24 Ore: Prodi & Quadrio Curzio La Tribune Le Monde El Pais: Carlos Diaz El Pais: Rubalcaba El Pais: Aizpeolea Expresso: Ramos
The IHT reports that Germany plans to lobby other governments for a coordinated EU effort to combat piracy, including authorisation to arm private security guards on commercial ships.
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The Mirror notes that, in a letter to Derby City Council, Business Secretary Vince Cable has repeated the Government’s line that EU rules prevent it from changing its position on the £1.4billion Thameslink rail contract awarded to Siemens rather than Bombardier.
Collateral thinking: Confusion abounds over the Greco-Finnish collateral deal
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