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New on the Open Europe Blog The Italian lira is back (for a weekend) Open Europe Blog Will anything come of Germany's summer of discontent? Open Europe Blog Given political will, EU reform could become an unlikely area of consensus for the revamped Coalition Open Europe Blog
Daily Press Summary Greece to renew push for two year delay to austerity programme The FT reports that Greek Prime Minister Antonis Samaras will renew his push for a two year extension to the country’s fiscal consolidation programme when he meets German Chancellor Angela Merkel and French President Francois Hollande next week. According to Greek government documents seen by the paper, Greece would require an additional €20bn in funding if cuts were slowed. However, the funds could be raised by increasing short-term debt, delaying repayment of the initial EU/IMF loans or even increasing disbursements from the IMF. The Greek government is still expected to present plans for a further €11.5bn in cuts over 2013-14 to Eurogroup Chief Jean-Claude Juncker in a meeting next week, despite the fact that the coalition is yet to fully agree on how these cuts will be achieved. Kathimerini reports that, in order to ensure the payment of public sector pensions and wages, the Greek government has launched an unofficial moratorium on all other areas of government spending. Kathimerini EUobserver El País El Mundo Kathimerini 2 FT FT 2 FT Editorial Le Monde Welt Plans for banking union begin to take shape Ahead of next month’s European Commission’s presentation of proposals to make the ECB the single eurozone banking supervisor, internal policy planning documents seen by Bloomberg suggest that the ECB could share its new supervisory power with national bank regulators, an option favoured by the UK. However, the proposals also include an alternative plan where the ECB could be tasked to oversee all major decisions for all eurozone banks. The plans also include ways to increase the ECB’s accountability in its new role including, involving the European Parliament or providing for national parliaments and the European Council to have a say in financial supervision – a suggestion which the UK has pushed for. Bloomberg EUobserver German SPD budgetary spokesman: Funding deficits via the ECB the worst way of dealing with the eurozone crisis Speaking to Berliner Zeitung, the SPD’s budgetary policy spokesperson Carsten Schneider estimated that Germany’s true liability towards the eurozone stood at around one trillion euros, arguing that “In reality we have already been in a debt union for a long time. We are liable not only for the debts of the deficit countries via the Greek package and the bailout funds but also for far larger amounts relating to the transactions of the ECB.” Schneider also criticised the “opaque and undemocratic” decision-making within the ECB, arguing that “In the ECB’s Governing Council Germany has only got one vote just like Malta and can always be outvoted. Financing deficits via the ECB is the worst way of dealing with the eurozone crisis”. Meanwhile in an interview with Italian daily Corriere della Sera, German Professor Markus Kerber said, “If the bailout fund [the ESM] were to be approved, it would cost Germany €3,700bn – 150% of its GDP. We asked the judges [at the German Constitutional Court] to take this into account.” Kerber explained that the figure includes Germany’s participation in euro bailouts so far, plus “the money that will be needed to rescue Spain, Italy and France.” Berliner Zeitung Welt Corriere della Sera: Kerber  Spanish PM: We won’t make any move on EFSF bond-buying until the ECB clarifies its intentions Following his meeting with the King of Spain yesterday, Spanish Prime Minister Mariano Rajoy told journalists, “The ECB can do many things: it can buy bonds on the secondary market, it can lend money to financial institutions so they can then buy public debt…Until we know what decision the ECB makes, we won’t make any decision either [on asking the eurozone’s temporary bailout fund, the EFSF, to start buying Spanish bonds].” Open Europe’s Twitter coverage of Rajoy’s press conference featured on theTelegraph’s live blog. Rajoy also said that he will hold talks with German Chancellor Angela Merkel, Finnish Prime Minister Jyrki Katainen and Italian Prime Minister Mario Monti next month. Separately, new figures from the Bank of Spain show that Spanish banks’ net borrowing from the ECB increased to over €375bn in July from €337bn in June, reports El País. El País El País 2 Expansión El Economista EUobserver Telegraph: Live blog Les Echos La Tribune FT FT 2WSJ WSJ 2 Guardian In an interview with Spiegel Online, German FDP leader and Vice-Chancellor Philipp Rösler criticises the CSU’s recent rhetoric on the eurozone crisis. He said, “Euro-populism is neither my way nor that of the FDP… a departure from the course of European integration is not possible with me or the FDP… My advice to the CSU is to moderate [Bavarian Finance Minister] Mr. Söder and [General Secretary] Mr. Dobrindt, and if necessary to isolate them. We cannot afford the two of them putting the reputation of our country at risk.” Spiegel Online Handelsblatt EUobserver reports that the ECJ has fixed for 14 September the deadline for written submissions in the case on whether the eurozone’s permanent bailout fund, the ESM, breaches EU law – with an oral hearing due on 23 October. The case was referred to the ECJ by the Irish Supreme Court following a complaint lodged by independent Irish MP Thomas Pringle. EUobserver Official data released yesterday showed that, as a whole, the eurozone contracted by 0.2% in the second quarter of this year, putting it on the brink of a double dip recession. The Finnish economy contracted by 1% from the first to the second quarter with only Greece and Portugal faring worse. FT CityAM WSJ FT 2 Guardian Times Irish Times Mail Corriere della Sera Repubblica Sole 24 ore Sole 24 Ore 2 Le Monde Irish Times FT: Rubin FT: Plender Deutsche Bank’s Chief Economist Thomas Mayer argues in FAZ that Italian Prime Minister Mario Monti’s record on structural reforms is disappointing, since “the liberalisation of closed professions has stalled, and labour market reforms were watered down so badly that they won’t have any positive effects on employment.” FAZ: Mayer De Volkskrant reports that, according to a new opinion poll ahead of the 12 September Dutch general elections, the Socialist Party is still the most popular, but is credited with 34 seats – down from 37 last week. Dutch caretaker Prime Minister Mark Rutte’s VVD party is now credited with 33 seats – up from 30 last week. Volkskrant In an interview with Elsevier, Dutch Social Affairs Minister Henk Kamp warns, “Europe should stay clear of our pensions.” He argues that EU Internal Market Commissioner Michel Barnier should drop “unacceptable” plans to force pension funds to increase their capital buffers, claiming that this would cost pension funds €10bn. Kamp adds that, although he is still in favour of European unification, he is busy trying to stop “useless plans” from Brussels every day. Elsevier Open Europe’s blog post commenting on reports that Italy’s Lega Nord party has organised a rally at which the Italian lira will be used as the only official currency is quoted by theTelegraph’s live blog. Telegraph: Live blog Romania’s Constitutional Court will rule on 21 August on the validity of a referendum on the impeachment of President Traian Basescu held in July. EUobserver