Open Europe will be co-organising two separate events at the 21th Economic Forum in Krynica Zdrój, Poland – this Wednesday (7 September) on “EU Diplomacy – Can we ever speak with one voice?”, and this Friday (9 September) on “The future of the eurozone”. For more information, please visit www.forum-ekonomiczne.pl Meanwhile, FTD claims that the German government is becoming less hostile to the possibility of Greece leaving the eurozone. This is despite Merkel rejecting such claims again yesterday. Sueddeutsche Zeitung reports that, based on preliminary polling, Merkel is not currently on course to gain majority backing from her coalition government for the amendments to the EFSF, the eurozone’s bailout fund, in the Bundestag as she has targeted. The package will likely still pass with opposition support, but this could threaten the stability of the governing coalition. Finance ministers from the Netherlands, Finland and Germany will meet in Berlin today in an attempt to find a solution to the Greco-Finnish collateral deal. Reuters reports that Greece may request that the end of the second bailout be moved from 2014 to 2013, to push up the speed of the financing in order to cover the higher than expected Greek deficit. In an interview with El País, IMF Director Christine Lagarde notes, “French President Nicolas Sarkozy, German Chancellor Angela Merkel and also other European leaders have said that they would do whatever is needed [to sort out the eurozone crisis]. I assume this includes increasing the EFSF, if necessary.” In the FT, Gideon Rachman suggests that German Chancellor Angela Merkel is right to “hang on to her purse” in her handling of the eurozone crisis, arguing, “Rather than lambasting the chancellor, the rest of Europe should be grateful that they have a calm and cautious leader in Berlin. It was bold visionaries such as Mr Kohl who created the euro in the first place – leaving future generations to sort out the subsequent mess.” In the WSJ, Conservative MP Sajid Javid argues, “Each day the euro remains on life-support in its current form, the consequences of its eventual death become graver. If European leaders would only accept that their grand economic experiment has failed, the impact would be more predictable and more manageable.” Former Finnish speaker of Parliament and Presidential Frontrunner Sauli Niinistö has criticised the second Greek bailout in online newspaper Uusi Suomi, arguing that “the economic and monetary union has steered away from its original course”. He adds that “two of the euro’s core principles are gone”, referring to the violation of the ban on bail-outs and the disrespect for the EU’s Stability and Growth pact.Open Europe Europe
World
New on the Open Europe blog
Tuesday, 6 September 2011
Conservative MPs increase pressure for renegotiation of UK’s role in Europe
The Times reports that Prime Minister David Cameron is expected to tell a select committee today that eurozone countries should be allowed to pursue greater fiscal integration in order to solve the current eurozone crisis, while also stressing the need to reduce EU red tape. The article notes, however, that there is growing support for a broader renegotiation of the UK-EU relationship within the Conservative party. Open Europe’s Director Mats Persson is quoted in theTelegraph arguing that the coalition government risks falling out of step with both European developments and public opinion, unless Cameron “develops a positive blueprint for a revised EU-UK relationship…Unfortunately, there seems to be no such sense of urgency from No 10 at the moment.”
A leader in the Telegraph argues that, “Conservatives in the Government need to be far more assertive about the kind of EU they want to see emerge and give their Eurosceptic instincts freer rein – regardless of the squeamishness of their junior Coalition partners. The eurozone crisis offers a unique opportunity to create the kind of EU most people in this country want. It should not be wasted.”
Market turmoil resumes on the back of eurozone uncertainty;
FTD: German government less hostile to Greece’s eurozone exit
Fears over the eurozone crisis took hold again yesterday with markets falling significantly across Europe, with European bank shares hit hardest. The Italian cost of borrowing resumed its rise, while German borrowing costs fell to record lows. These moves were in spite of ECB bond purchases, which totalled €13.3bn last week, far more than expected. TheFT reports that German Chancellor Angela Merkel told a meeting of CDU MPs that the situation in Greece and Italy is “extremely fragile”, surprisingly putting the two countries in the same bracket. Le Figaro reports that, speaking in Paris yesterday, future ECB President Mario Draghi called for a “broad” revision of the EU treaties in order to strengthen economic governance in the eurozone.
Meanwhile, Open Europe’s briefing on tomorrow’s ruling by the German Constitutional Court on the legality of the eurozone bailouts is cited in the IHT andZerohedge. Open Europe’s Pieter Cleppe is quoted saying, “Injecting more parliamentary democracy into the euro zone crisis is clearly a good thing. But it will also further limit EU leaders’ room for manoeuvre when dealing with the crisis, which in turn could increase market uncertainty.”
Open Europe briefing FT FT 2 WSJ Times BBC FTD FT 3 FT 4 WSJ 2 EurActiv EUobserver Straneuropa Il Sole 24 Ore FT 5 Bloomberg Reuters WSJ 3 FT 6 Le Figaro IHT El País: Lagarde WSJ 4 EurActiv 2 Zerohedge IHT 2 AFP Süddeutsche Zeitung YLE
The debate on Italy’s second austerity package kicks off in the plenary session of the Italian Senate today, with both the ruling coalition and the opposition aiming to have it adopted by tomorrow evening. Meanwhile, the general strike called by Italy’s biggest trade union CGIL against the austerity measures is taking place today, with demonstrations in one hundred Italian cities and two major marches in Rome.
David Cameron could seek dilution of EU temporary workers rules
The Telegraph reports that independent legal advice on the EU’s Temporary Agency Workers Directive secretly commissioned by David Cameron’s office has concluded that its impact on the UK economy could be moderated, since Business Secretary Vince Cable’s department has ‘gold-plated’ the Directive with unnecessary additional rules. The article notes that Cameron’s advisors are now considering scrapping some of these provisions. The Directive is due to enter into force in October, and is estimated to cost British businesses almost £2bn a year.
Reuters reports that Adam Farkas, Executive Director of the EU’s new banking watchdog, the European Banking Authority, has said EBA is considering legally binding rules on EU bankers’ pay and bonuses.
Schäuble: Fiscal union in the eurozone needs “strong democratic mandate”
In an op-ed in the FT, German Finance Minister Wolfgang Schäuble argues, “Europe has always moved forward one step at a time and it should continue to do so. This does not mean that fiscal policy in the eurozone should not gradually become more centralised. It should, as long as this process is legitimised by a strong democratic mandate. But strengthening the architecture of the eurozone will need time. It may need profound treaty changes, which will not happen overnight. But the direction is not disputed, and the determination of all member states to defend the common European currency is granted.”
In an op-ed in the Telegraph, managing Director of the international forum of Deutsche Bank, Wolfgang Nowak, argues, “Today, the rest of Europe is looking to Germany to save the European project...Frankly, however, an increasing number of my countrymen are finding it hard to see why they should come to the rescue of a currency that demands so much, and seems to offer so little. For them, the ‘Europe of the euro’ has become a Europe of broken promises.”
US FT: Schäuble FT: Rachman WSJ: Javid WSJ: Fidler WSJ Heard on the Street BBC: Hewitt Independent: Prosser Il Sole 24 Ore: Napoletano Le Figaro: de Capèle La Stampa: Lepri La Stampa: Feltri Il Sole 24 Ore: Riolfi Handelsblatt: Fuest EurActiv Deutsche Welle Telegraph: Nowak
Austria Presse Agentur quotes Open Europe’s Pieter Cleppe speaking at the European Forum in Alpbach on Internet and Democracy, and arguing that, as regards privacy concerns, the difference between social networks such as Facebook and governments is that users have the option to unsubscribe from this kind of services, “which one doesn't have with governments.”
In a letter to MPs, Dutch Finance Minister Jan Kees de Jager has said he is “not particularly worried” about the recent market turmoil and that there's no reason to take additional measures, such as a short selling ban. He stressed that short selling has a “useful role” in the pricing and liquidity of shares, and noted that experts have doubts over the effectiveness of any such ban.
The front page of FAZ reports that, in response to the recent crisis regarding the Schengen system, the European Commission will propose a legislative change which would effectively give it veto power over any national government’s decision to temporarily reinstitute border controls.
A 240-page draft seen by Handelsblatt reveals that the proposed changes to the EU’s MiFID Directive – due to be unveiled by EU Internal Market Commissioner Michel Barnier next month – will mainly address high-frequency trading and speculation on raw materials derivatives. The changes would also require that derivatives trading take place on stock exchanges and would give regulators “the explicit right to limit transactions with commodity derivatives.”
The FT reports that, following complaints from banks that the new Basel III capital requirements will force them to reduce consumers lending, global bank regulators are considering easing the “liquidity coverage ratio”, requiring banks to hold more liquid assets to withstand a credit crunch. The UK is said to be opposed to the easing.
What will the German Constitutional Court ruling mean for the eurozone crisis?
Posts
