Meanwhile, the Irish Times reports that the Danish government believes that because it has an opt-out from joining the euro, it will not have to hold a referendum if it decides to join the treaty, while Swedish PM Fredrik Reinfeldt has said that Sweden may join, provided that the budget rules entailed in the pact don’t apply to Sweden, reports TT. As highlighted by Draghi, markets responded positively yesterday as Spain and Italy were able to raise €22bn at bond auctions. Spain sold €10bn in three and four year debt, double the expected amount, at much lower rates than previous auctions. The mood continued this morning as Italy sold €4.75bn worth of bonds again seeing rates decrease. Meanwhile, negotiations over the Greek voluntary restructuring continue to drag on, Charles Dallara, Head of the International Institute of Finance, said yesterday that “some key areas remain unresolved,” adding that "has to be done really in the next few days,” according to the WSJ. Greek Deputy Finance Minister Philippos Sachinidis warned yesterday that "If the participation [rate in the restructuring] does not reach 100%, greater support from our partners would be necessary." Slovakian Finance Minister Ivan Miklos said yesterday that the EU should consider planning for the exit of a country from the eurozone: “Saving [the euro zone] in its current form isn't a reasonable solution…There'll be a legitimate debate on how and what kind of euro is necessary and possible to save”, he said.Open Europe Europe
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Friday, 13 January 2012
ECB board member: New fiscal treaty draft is a “substantial dilution”;
Polish government may not sign up to agreement while Czech government divided
FTD reports that the ECB has responded critically to the latest draft of the fiscal treaty, with board member Jörg Asmussen describing it as a “substantial dilution”, and calling for the proposed measure which would allow states to exceed the 0.5% of GDP deficit threshold in “exceptional circumstances” to be significantly tightened. Meanwhile,EurActiv reports that the treaty came a step closer to being finally agreed after European Council officials offered concessions to MEPs who had been critical of the latest draft, including a more explicit reference to the EU Treaties and a clause granting the leaders of the European Parliament’s main political groups the right to address eurozone summits.
Dziennik Gazeta Prawna reports that having initially embraced the treaty, the Polish government is having second thoughts about signing up after none of the draft versions allowed for the participation of non-euro member states in key eurozone economic summits. The treaty has also divided the Czech government, with Deputy PM and Foreign Minister Karel Schwarzenberg threatening to pull his TOP09 party out of the coalition unless the government, led by the conservative ODS party, signs up to the treaty. ODS Prime Minister Petr Necas has yet to determine his final position, while Czech President Vaclav Klaus has said he will not sign the pact “under any circumstances”.
Italian business daily Il Sole 24 Ore quotes Open Europe saying that the third draft of the fiscal treaty marked a provisional victory for the UK. The paper also reports that, after yesterday’s round of talks, a fourth draft is being prepared and should be made available before the meeting of EU finance ministers on 24 January, noting that Germany has obtained that future bailouts under the ESM be made conditional on the ratification of the fiscal treaty. Open Europe was also credited by EurActiv for publishing a copy of the most recent draft.
FTD DGP Gazeta Wyborcza Ceskie Noviny European Voice EurActiv EUobserverEUobserver 2 Irish Times Dagens Industri Le Figaro Il Sole 24 Ore De Morgen: Magnette
Spanish Prime Minister Mariano Rajoy will meet German Chancellor Angela Merkel in Berlin on 26 January. Spanish business daily Cinco Días quotes sources close to the Spanish government saying that, at the next summit of EU leaders, Rajoy intends to request EFSF funding to help cope with the restructuring of Spain’s banking sector.
Markets rebound after successful Italian and Spanish debt auctions;
Draghi: Evidence suggests ECB long term lending has been effective
The ECB unanimously decided to hold interest rates yesterday as ECB President Mario Draghi said he saw signs of “tentative” economic stabilisation in the eurozone. Draghi stated that the ECB’s €489bn long term refinancing operation (LTRO) conducted last month had helped to ease the credit crunch in the eurozone and bring down yields on sovereign debt, pointing to the successful debt auctions held by Italy and Spain yesterday. In response to suggestions that banks were simply depositing the money they borrowed at the LTRO back into the ECB Draghi said, “By and large the banks that have borrowed the money from the ECB are not the same [as those] that are depositing it in the ECB.” Draghi also reiterated his call for strengthened fiscal discipline in the eurozone and criticised the European Banking Authority stress tests for being pro-cyclical.
Die Welt reports that due to higher tax revenues the German deficit for 2011 will be €4.7bn lower than expected, although the government is set to lower its growth forecast for 2012 to 0.75%. Le Figaro reports that, according to French Economy Minister François Baroin, France’s deficit could be around 5.5% of GDP at the end of 2011, slightly lower than the 5.7% target. Handelsblatt reports that the EU’s banking supervisory authority, the EBA, has “indefinitely postponed” its annual stress tests of EU banks due in July due to concerns that they have not made sufficient progress in their recapitalisation efforts.
FT CityAM CityAM 2 WSJ European Voice Irish Times Independent EUobserver Les Echos BBC Irish Independent FT 2 WSJ 2 EurActiv Telegraph Times BBC Irish Independent 2 Welt Le Figaro Les Echos 2 Le Monde Repubblica Il Sole 24 Ore FT 3CityAM 3 WSJ 3 WSJ 4 Guardian Times Irish Independent 3 Economist Economist 2Economist 3 FT 4 WSJ 5 Irish Independent 4 Guardian 2 EUobserver 2 Welt 2Handelsblatt Handelsblatt 2 Handelsblatt 3 Expansión Expansión 2 Le Figaro 2 Le Monde 2
The report from legal researcher Robert Broadhurst, showing that three out of four ECHR rulings go against the UK was today covered by the Telegraph.
In the FT, Nomura’s Jens Nordvig argues: “At this point, Europe needs to spell out a contingency plan for a eurozone break-up… The plan must offer guidance on orderly redenomination of euro-denominated assets and obligations in a break-up scenario.A contingency plan for orderly asset redenomination in a break-up scenario could help alleviate investor worries about eurozone assets and improve the capital flow situation and funding costs. Ironically, spelling out guidelines for a eurozone break-up may – at this stage in the crisis – even help to reduce the risk of the break-up itself.”
Irish Minister of State Ciaran Cannon revealed yesterday that €9 million of EU funds allocated to retrain redundant Dell employees had not been spent.
The Mirror reports that Irish airline Ryanair will charge its passengers an additional fee of 25p for each flight in a bid to meet EU carbon tax costs.
City AM reports that the EU is close to agreeing on joint sanctions on Iran which would include a grace period of six months for crude oil purchases, and three months for petrochemicals, to allow countries such as Italy and Greece time to find alternative suppliers.
An analysis by Reuters looking at the potential implications of Scottish independence quotes Open Europe’s senior analyst Christopher Howarth saying: “Our understanding is the UK's membership of the EU extends to the legal entity of the UK. Scotland would have to apply to join the EU as a non-member and would have to go through the accession process.”
What Has The ECHR Done For The UK Lately?
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