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Comprehensive plan still evades European leaders ahead of crucial summit
European officials yesterday decided to cancel the meeting of finance ministers scheduled for this evening, further fuelling fears that they will fail to reach an agreement on a comprehensive plan for solving the eurozone crisis. The FTreports that, according to a set of draft summit conclusions, there is still no agreement over the level of write downs which Greek bondholders should face, while the final deal may not include an exact figure on the size of the leveraged EFSF, the eurozone’s bailout fund, meaning it may not be decided upon until a meeting of EU finance ministers on 7 November. Even the bank recapitalisation plan, which had been broadly agreed over the weekend, still has significant legal and technical details which need to be worked out, many of which were meant to be dealt with at the cancelled finance ministers meeting.

Plans to set up a Special Purpose Vehicle backed by public and private foreign investors are also uncertain with the IMF still undecided on whether to support and take part in such a fund. Brazil has ruled out investing outside of its IMF contributions.

German Chancellor Angela Merkel is highly likely to maintain her governing majority in today’s Bundestag vote on leveraging the EFSF as the CDU and FDP parliamentary groups, together with the opposition SDP and Green parties, yesterday agreed on a common position. However, 16 coalition MPs are expected to either vote against the motion or abstain. Die Welt notes that while Merkel will get a negotiating mandate ahead of this evening’s EU summit, because many details are yet to be decided upon, MPs are likely to set out ‘red lines’ that she may not cross, including prohibiting the continuation of ECB bond buying. FAZ’s Economics Editor Heike Göbel argues that although Germany’s liability cap of €211bn under the EFSF will not increase, leveraging the fund would put this money under substantially greater risk.

Meanwhile, EUobserver reports that the Dutch Parliament may not approve the next eurozone summit deal, with the PVV party, which usually supports the minority government already stating that it will vote against the package. The opposition Labour party is yet to announce how it will vote, but has said that it is not convinced by the negotiations so far.

Speaking to the Treasury Select Committee yesterday, Mervyn King, Governor of the Bank of England, warned that today’s summit will not solve the eurozone crisis, saying, “The aim of the measures to be introduced over the next few days is to create a year or possibly two years’ breathing space…The underlying problems still have to be resolved.” Open Europe’s finding that, in a worst case scenario, a European bank recapitalisation could cost €372bn is cited by Dutch daily De Volksrant. Open Europe’s Raoul Ruparel appeared on BBC News and CBC discussing the possible outcomes of today’s EU summit.
FT CityAM WSJ EurActiv CityAM 2 FT 2 WSJ 2 FT 3 FT 4 FT 5 BBC Independent Le Figaro Le Figaro 2 Le Figaro 3Guardian EUobserver EUobserver 2 Irish Independent Times Times 2 Irish Times Irish Times 2 Daily Mail IHT IHT 2Handelsblatt Handelsblatt 2 Reuters Kathimerini Les Echos Le Figaro 4 Les Echos 2 Handelsblatt Handelsblatt 2 WeltWelt 2 Welt: Alexander FAZ FAZ 2 FAZ: Göbel Welt 3 Welt 4 DPA Bild Bild: Koch De Volksrant

Berlusconi promises Lega Nord early elections in return for partial support for pensions reform
It is widely reported in the Italian press that Italian Prime Minister Silvio Berlusconi has promised Umberto Bossi, leader of junior coalition party Lega Nord, he will call early elections in March in return for Lega Nord’s support for the government’s plan to gradually increase retirement age to 67 by 2026. However, Lega Nord is still resisting the abolition of old age pensions. The last-minute agreement allowed Berlusconi to finalise a 15-page letter outlining a set of pro-growth measures he was required to send to EU leaders before today’s summit.
FT WSJ EurActiv FT: Severgnini Corriere della Sera Corriere della Sera 2 BBC BBC: Hewitt Repubblica La Stampa La Stampa 2 EUobserver FAZ Welt El País Il Sole 24 Ore

Conservative leadership considering repatriation of powers from Brussels
Following Monday’s vote which saw 79 Conservative MPs vote for an EU referendum the Education Secretary Michael Gove MP told the BBC’s Today programme, “We need to win back more [powers] and that process will require careful negotiation.” Separately, Europe Minister David Lidington has told Parliament, “The reality is that if the eurozone proceeds, as economic logic demands, towards closer economic and fiscal integration, there will be consequences for the whole EU. As part of that negotiation, we intend to insist that, as a first step, the interests of the 27 are protected over matters such as the single market, and that the particular British interest in financial services is properly safeguarded.” He added that work set out in the Coalition agreement on examining the balance of EU competencies affecting the UK “has started. It is in its early stages.”

In an article looking at what powers the UK could repatriate from the EU, the Mail cites Open Europe’s estimate that EU employment legislation introduced between 1998 and 2009 has cost the UK economy £38.9bn. However, Nick Clegg is reported as saying, “This Government, of which I’m the Deputy Prime Minister, is not going to launch some sort of dawn raid, some smash-and-grab raid on Brussels.” Meanwhile, David Cameron has told the BBC that he feels “no bad blood, no rancour, no bitterness” towards the rebels although, in an editorial, the Telegraph doubts if these sentiments are reciprocated.
Open Europe Research Independent Mirror CityAM Guardian Times: Jenkin Telegraph: Editorial Mail: CommentConservative Home: Browne Hansard: Lidington BBC BBC Today Programme: Gove Express Sun EUobserver TimesIrish Times Mail Telegraph Guardian: Gow FT FT 2 CityAM Guardian: Monk Guardian: Kampfner Express: WiddecombeOpen Europe Blog

Eurozone comment round-up
In the FT, Martin Wolf addresses an open letter to incoming ECB President Mario Draghi, arguing, “The eurozone risks a tidal wave of fiscal and banking crises. The European financial stability facility cannot stop this. Only the ECB can. As the sole eurozone-wide institution, it has the responsibility. It also has the power. I am sorry, Mario. But you face a choice between pleasing the monetary hawks and saving the eurozone. Choose the latter.”

In an op-ed in Handelsblatt, outgoing ECB President Jean-Claude Trichet suggests, “One could imagine that, in the future European institutional framework, the Council might evolve into the Senate of the Union, the European Parliament into the lower house, the Commission into the executive and the European Court of Justice into the judiciary – each time for the part of sovereignty that is shared.” Handelsblatt’s front page carries the headline, “EU summit: The day of the broken promises.”

In City AM, Philip Bagus – author of the book, “The tragedy of the euro” – writes, “While the practical complexity of any real world euro exit certainly justifies [Lord] Wolfson’s prize, my recent survey of all the challenges found that the problems of a euro exit have been exaggerated. Introduction costs, wage inflation, trade losses, political costs, legal problems, procedural costs, problems with disentangling of the ECB – none are insurmountable. With reforms and careful negotiation, these problems are all manageable. It is unpalatable to Europe’s leaders, but exit from the euro is a real option.”
Handelsblatt: Trichet Telegraph: Warner CityAM: Bagus Telegraph: Ambrose Evans-Pritchard Irish Times: BeesleyTimes: Kaletsky FT Editorial FT: Wolf FT: Kay CityAM: Salter WSJ: Barley WSJ: Ladopoulos Guardian BBC: FlandersLe Monde: Leparmentier Irish Independent: McWilliams Independent: McRae Le Figaro: Rousselin Les Echos: Vittori La Stampa: Sorgi Il Sole 24 Ore: Folli Il Sole 24 Ore: Forquet Il Sole 24 Ore: Carlini

When asked how they would vote on an amendment to the Lisbon Treaty to extend the powers of the EU to deal with the financial crisis, 47% of Irish voters said they would vote No; 28% said they would vote Yes; and 25% were undecided, according to the latest Irish Times/Ipsos MRBI poll.
Irish Times

EUobserver reports that the US House of Representatives has passed a bill allowing US airlines to ignore upcoming EU rules on carbon emissions. The EU is planning to include all airlines operating flights to and from EU-based airports into its Emissions Trading Scheme from 1 January 2012.
EUobserver

According to a poll conducted for Helsingin Sanomat, 23.2% of voters support the National Coalition Party of Finnish Prime Minister Jyrki Katainen, while the Finns (previously known as the True Finns) remain Finland’s second largest party with 21.9% of support.
HS

A poll conducted by Voxmeter shows that support for the Danish Social Democrats and the newly-elected Prime Minister Helle Thorning-Schmidt has already decreased from 24.8% to 20.5%, reports Jyllands Posten.
JP

UK

The Telegraph reports that Thorbjorn Jagland, the Secretary-General of the Council of Europe has dismissed suggestions by the Lord Chief Justice that UK courts only had to “take account” of European Court of Human Rights rulings.
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