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Eurozone finance ministers delay payment of next tranche of Greek bailout funds;
Bundesbank President: ECB has taken on “considerable risks” during the crisis
Eurozone finance ministers agreed during a meeting on Friday to delay the decision on whether to disperse the next tranche of Greek bailout funds until mid-October, leaving Greece needing to adopt further austerity measures in order to ensure the necessary funds are released. Greek Finance Minister Evangelos Venizelos will today hold a conference call with the EU/IMF/ECB team reviewing the Greek economy in an attempt to reach an agreement. Venizelos warned yesterday that Greece was being "threatened and humiliated" by the continuing demands for increasing austerity, adding, "[Greece] should not be the scapegoat or the easy excuse that will be used by European and international institutions in order to hide their own lack of competence to manage the crisis."

During Friday’s meeting both Chancellor George Osborne and US Treasury Secretary Timothy Geithner were critical of the eurozone leaders handling of the crisis, with Osborne saying, “people know that time is running out,” while Geithner said that delays in dealing with the crisis has created a “catastrophic risk” to financial markets. Despite these warnings eurozone finance ministers decided to push back the time frame for approving the expanded scope of the EFSF, the eurozone’s bailout fund, until mid-October. The meeting also failed to yield any significant progress on finding a solution to the Greco-Finnish collateral deal which has threatened to derail the second Greek bailout.

Bloomberg reports that former IMF Director Dominique Strauss-Kahn said that everyone must be willing accept losses on Greek debt because “they [the Greeks] can’t pay”, adding, “The efforts of European leaders have been too little, or too late, or often both too little and too late.” In an interview with Bild am Sonntag, German Finance Minister Wolfgang Schäuble hinted at a potential Greek exit from the eurozone, by saying that it is up to Greece to decide whether it wants to shoulder the burden of being in the single currency.

Dutch RTL Z TV reports that, according to a confidential report, the Dutch Finance Ministry estimates that an uncontrolled Greek default could cost the Netherlands up to €120bn, mostly due to extra guarantees needed to stop contagion to other peripheral economies. Dutch Finance Minister Jan Kees de Jager said that he will issue the report confidentially to Dutch MPs.

In an interview with Der Spiegel Bundesbank President Jens Weidmann said that the ECB had taken on "considerable risks” during the crisis, adding, “If we accept risk onto the books of the eurosystem that means, simultaneously, a redistribution of risk among the taxpayers of individual states.” Weidmann warned that these risks “must be reduced” particularly as they represent an extra burden on the German taxpayer.

Open Europe's Pieter Cleppe was interviewed by Polish Radio, arguing that "there is an irresponsible unwillingness amongst European policy makers to deal with the problems of European banks.” Belgium's financial daily De Tijd features an interview with Open Europe’s Director Mats Persson on the role of the ECB in the eurozone crisis, Mats argued, "The weakening of the balance sheet of the ECB threatens to erode its credibility. Markets are losing trust in a central bank which has been weakened…In theory, the ECB can ‘inflate’ away the losses, by simply printing money, but that option is simply unacceptable in Germany." Open Europe’s Raoul Ruparel appeared on LBCyesterday discussing the eurozone crisis and its impact on the UK.
FT CityAM WSJ EurActiv El País Expansión Irish Times Irish Times 2 Welt IHT BBC BBC 2 Independent EUobserver Independent on Sunday Sunday Telegraph Sunday Telegraph 2 Sunday Times Sunday Times 2 Guardian FT Weekend FT Weekend 2 FT Weekend 3 FT Weekend 4 Saturday's Mail Saturday's Guardian Saturday's Independent Saturday's Times Saturday's Times 2 Saturday's Times 3Kathimerini Reuters Le Figaro Les Echos FT 2 FT 3 WSJ 2 WSJ 3 IHT Spiegel EurActiv 2 Irish Times 3 Le Figaro: Passos Coelho La Tribune: Reynders FT Weekend Handelsblatt RTL Z Elsevier Bloomberg Reuters France Reuters France 2 Le Figaro 2 Handelsblatt FTDSpiegel 2 Bild Les Echos 2 Le Figaro 3 Le Monde YLE TS YLE 2 Kauppalehti

Chorus of Conservatives call for new relationship with EU;
Clegg and Alexander reject repatriation of powers from Brussels
In the Sunday Express, Conservative MP Chris Heaton-Harris, co-founder of the new backbench group of MPs calling for a new approach to Europe, argued, “Last Monday’s meeting lasted just over 60 minutes and 34 MPs spoke. A single message came out: we need a new relationship with the EU. I’d like to think it was heard in Downing Street.” In the Sunday Telegraph, former Chancellor Lord Lamont wrote, “It is not just the euro but the whole European Union that needs rethinking. In a continent with such a patchwork of nation states, there is a need for some European institutions, but ones that are less intrusive.” Writing in today’s Telegraph, Conservative MP and Secretary of the 1922 Committee Mark Pritchard argues for a referendum on the EU, asking whether Britain should be part of a “political union” or a “trade-only relationship”, followed by an “in or out” vote if the UK fails to agree favourable terms.

Meanwhile, in the Times, Chief Secretary to the Treasury, Lib Dem MP Danny Alexander, argues that, “Demanding wide-ranging renegotiation of the UK’s membership will only deter others from pursuing solutions with us, forcing them to seek exclusive arrangements where we have no voice but are directly affected by the decisions they make.” The Independent cites senior Lib Dem party officials saying that Deputy PM Nick Clegg will oppose any Government plans to repatriate powers in any eurozone treaty negotiations.
Sunday Express: Heaton-Harris Sunday Telegraph: Lamont Mail on Sunday Sunday Telegraph: Booker Mail Telegraph: Pritchard TelegraphExpress Telegraph: Bootle Independent Times: Alexander

Eurozone comment round-up
In the FT, Wolfgang Münchau argues, “We are moving closer towards an involuntary break-up” of the eurozone. On the FT’s A-list blog, Nouriel Roubini argues, “Greece must now begin an orderly default, voluntarily exit the eurozone and return to the drachma...Those who claim contagion will drag others into the crisis are also in denial too. Other peripheral countries have Greek-style debt sustainability and competitiveness problems too; Portugal, for example, may eventually have to restructure its debt and exit too. Illiquid but potentially solvent economies, such as Italy and Spain, will need liquidity support from Europe regardless of whether Greece exits.”

In Le Figaro, French Professor Édouard Tétreau argues, “France has already voted two bailout plans for Greece in two years, coming with a cost of more than €30bn – the equivalent of what is raised from income taxes in France in seven months. Who would agree, in our country, to work seven months to subsidise the lifestyle of people who are unable to pay their own taxes? By subsidising this organised robbery, we are not doing Greece, or Europe, a favour.” He suggests that the time has come to “drop Greece in order to save Europe. Sometimes, one needs to have an arm cut to survive.”

In the WSJ, columnist Holman W. Jenkins Jr. notes, “Behind the euro was an a-historical dream of a European super-state, in a world that – if you haven't noticed – has been moving steadily in the opposite direction. European elites may crave unification, but most societies seem to crave democratic independence. The United Nations boasts 193 member states today, up from 127 in 1970.” On Conservative Home, Bruce Anderson writes, “Those who invented the euro can console themselves on one remarkable feat. They have devised a problem which may be beyond the power of the human mind to solve. For the rest of us, at least in Britain, there is good news and bad news. The good news is that British federasty is dead. The bad news is that no-one is sure how to keep the European economy alive.”
FT: Munchau FT: Summers FT: Roubini FT: Dizard CityAM: Drake WSJ: Jenkins WSJ The Outlook WSJ Heard on the Street WSJ: FidlerSaturday's Telegraph Editorial Saturday's Mail: Heffer Saturday's Independent: Prosser Saturday's Times: Fleming Guardian: ElliottGuardian: Editorial Telegraph: Evans-Pritchard Sunday Times: Dey Sunday Telegraph: Vander Weyer Independent on Sunday: McRaeSunday Times: Leader Sunday Telegraph: Aldrick Observer: Hutton Conservative Home: Anderson El País: Editorial Corriere della Sera: Alesina & Giavazzi Independent: King Welt: Hildebrand

In an interview with Süddeutsche Zeitung, German Constitutional Court Judge Peter Michael Hubert suggested that the recent economic governance package agreed in the eurozone may not adhere to the German Constitution, since it may break the principle that the “majority of tasks and competencies” must remain with the nation state. Therefore, to implement the package a constitutional amendment may be required, which would need a referendum.
SZ

According to a poll conducted by the French Institute of Public Opinion (IFOP), 68% of French respondents opposed France’s €15bn share of financial aid to Greece, while 87% believed that the money lent to Greece would be a waste since Greece will never be able to fully repay it.
France Soir Le Point

Leader of Italy’s junior coalition party hints at early elections
Italy’s borrowing costs are on the rise again this morning, as the country seems on the verge of political crisis. Over the weekend, the leader of Italy’s junior coalition party Lega Nord, Umberto Bossi, said, “The government will carry on for the moment, then we’ll see”, adding, “2013 [the date of the next general elections] looks too far away to me.” Meanwhile, Italian Prime Minister Silvio Berlusconi will today be heard by prosecutors in Milan as part of a trial in which he is accused of bribing his former tax lawyer. In a phone conversation heard by Italian judges within a separate investigation, Berlusconi also said that he was working as Prime Minister “in my spare time,” reports La Stampa.
Corriere della Sera Corriere della Sera 2 Il Sole 24 Ore Repubblica La Stampa

EU finance ministers deeply divided over financial transaction tax;
Schäuble: We will have FTT by the autumn “just in the eurozone” if necessary
EU leaders have vowed to press ahead with plans for a new tax on financial transactions, despite objections from Britain and the US, Saturday’s Guardian reported. “There are very considerable divisions,” said Jacek Rostowski, the Polish Finance Minister who was chairing the meeting, commenting on the transaction tax. “It obviously raises a lot of emotions.” German Finance Minister Wolfgang Schäuble also said to Bild am Sonntag, “Before the end of the autumn we are going to create a tax on financial transactions. If necessary, I am sure, just in the eurozone.”
FTfm European Voice Times Guardian Economist blogs: Charlemagne Bild am Sonntag

German governing coalition suffers another regional election defeat
The German governing parties suffered another heavy defeat in the Berlin regional elections, with the junior coalition partner, the FDP, slumping to only 1.8% of the vote. The CDU, German Chancellor Angela Merkel’s party, came in second behind the SPD but did see its share of the vote hold up reasonably well. Spiegel notes that a series of defeats for the FDP could lead to the party taking a tougher line on the eurozone, making the coalition harder to sustain. "We would be wise to show humility about this result," said Christian Lindner, FDP's deputy party leader. "It's a low point but also a wake-up call.”
FT WSJ Telegraph IHT Suddeutsche Tagesschau Handelsblatt FAZ FT Deutschland FAZ 2 Spiegel AFP Handelsblatt Spiegel 2

Saturday’s Telegraph reported that two thirds of EU officials are cashing in on an expat allowance that gives them an extra 16% on top of their salary for their entire working life at a cost of £200 million a year.
Saturday's Telegraph

A Sunday Telegraph leader argued that the Coalition’s commitment, mandated by the EU, of ensuring that 40% of Britain’s electricity comes from renewable sources by 2020, is based on “dogma not evidence”.
Sunday Telegraph Sunday Telegraph: Leader

The Independent reports that Turkey has threatened to freeze its relations with the EU if Cyprus is given the rotating EU Presidency in 2012.
RTBF Independent Telegraph

Reuters AlertNet covers last week’s Open Europe and ODI debate on EU aid, quoting Open Europe’s Stephen Booth saying, “The EU's aid budget as it currently stands is designed to do too many different things at once.”
AlertNet Open Europe research

Writing in FTfm, Hans Hack, the head of the financial services practice of FD Blueprint, argues that the alternative investment industry must remain engaged with the European Commission over the implementation of the recent AIFM Directive.
FTfm: Hack Open Europe research

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