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New on the Open Europe Blog MEPs reject plans for controversial fund managers' bonus cap  Open Europe Blog Governo em risco: Portuguese government at risk of collapsing after Foreign Minister resigns  Open Europe Blog Why is Berlin so outraged over spy claims? Because they evoke nightmarish memories in Germany Open Europe Blog
Daily Press Summary Portugal’s coalition hangs on as parties seek path out of political crisis;  Portuguese financial markets watchdog bans short-selling for 24 hours  The Portuguese government was thrown a lifeline yesterday as Foreign Minister and head of junior coalition partner the People’s Party, Paulo Portas, was tasked by his party’s Executive Committee with trying to negotiate a new settlement with Prime Minister Pedro Passos Coelho before confirming his resignation or breaking up the coalition. Portas and Passos Coelho held “constructive” talks yesterday, and will meet again later this morning. The two will also meet Portuguese President Aníbal Cavaco Silva this afternoon. Meanwhile, the interest rate on Portugal’s ten-year borrowing costs remains above 7% this morning – after peaking at over 8.2% yesterday. Last night, the Portuguese financial regulator CMVM announced a 24-hour ban on short-selling on the stock market.  Open Europe yesterday published a flash analysis of the situation in Portugal, arguing that any delays to the reform programme could push Portugal into needing further financial assistance. The analysis was reproduced by Zerohedge and cited by Deutsche Wirtschaftsnachrichten, the Telegraph, Dutch news site Dagelijske Standaard, the Guardian’s and Telegraph’s live blogs. Open Europe’s Raoul Ruparel appeared on CNBC’s Squawk Box this morning discussing Portugal’s economic and political situation. Open Europe’s Vincenzo Scarpetta appeared on Radio France Internationale yesterday, noting that the political crisis comes at a difficult time for Portugal given the sizeable economic challenges. Open Europe flash analysis Bloomberg WSJ WSJ 2 Telegraph Guardian live blog Telegraph live blog DWNFT Editorial WSJ Review & Outlook ZeroHedge Dagelijske Standaard  MEPs reject plans for controversial fund managers’ bonus cap  The European Parliament yesterday adopted by 348 to 341 votes an amendment brokered by UK Conservative MEP Syed Kamall with the European People’s Party (EPP) and the Liberals (ALDE) scrapping controversial plans to cap the bonuses of UCITS investment fund managers at one year’s basic salary. Open Europe’s Vincenzo Scarpetta is quoted by the Telegraph and City AM as saying, “Plans to put a cap on fund managers’ bonuses made little economic sense, so the outcome of the vote is good news. The vote shows the UK can make its voice heard in Europe when it has a clear negotiating strategy and moves early enough in the EU’s law-making process. However, that the bonus cap was proposed at all illustrates the power of the European Parliament to potentially introduce misguided regulation.” Open Europe is also quoted by the Times.  Open Europe blog Telegraph City AM Independent FT WSJ  FAZ’s Brussels correspondent Nikolas Busse highlights the recent “subsidiarity review” by the Dutch government – an assessment of what the EU should and shouldn't be involved in. He notes that it is remarkable that the report comes from a country of the EU’s inner core and sees the Netherlands as “a natural ally of the British” fighting for EU reform if there were to be negotiations on EU treaty changes in the coming years. Open Europe blog Open Europe: European localism  Troika may show flexibility as Greece admits it cannot meet reform targets  Greek Administrative Reform Minister Kyriakos Mitsotakis admitted yesterday that it is unlikely that Greece will be able to meet its reform targets and civil servant job cuts in time for the latest bailout review. However, Kathimerini reports that a deal may still be agreed, with the EU/IMF/ECB Troika showing some willingness to be flexible. The pressure is on to reach an agreement today to allow for the next disbursement of bailout funds to be approved at Monday’s meeting of eurozone finance ministers. Otherwise, Greece could have to wait until September for the next tranche of funds.  Kathimerini Kathimerini 2 Kathimerini 3 Kathimerini 4  Commission investigating whether alleged UK-US spying ‘broke EU law’  Reuters quotes a European Commission source as saying that EU officials are investigating whether Tempora, the alleged spying and data sharing project between the UK and the US, could be a violation of EU law. Britain’s activities may fall foul of the EU's Data Protection Directive, which sets rules on data privacy, the source said. A recent European Court of Justice judgment found that EU governments cannot simply argue they are not bound by EU law because they acted out of national security concerns.  Reuters FT Welt EUobserver EUobserver2 Reuters Spiegel Reuters Deutschland Reuters Deutschland 2  EU leaders yesterday reiterated their pledge to dedicate €8bn from next EU budget to tackle the continent’s youth unemployment crisis at a summit in Berlin. The fund will be supplemented by aid from the European Investment Bank and EU structural funds, bringing the total amount of resources available to €24bn. EUobserver FAZ FAZ 2 Süddeutsche: Oechsner Süddeutsche Süddeutsche: Gros FT Welt Welt 2 Irish Independent Bild Irish Times  Writing in the Times, Director-General of the CBI John Cridland argues that the “business community must be active in the debate and champion what is best for jobs and growth — retaining access to the single market in a reformed EU. The challenge for those arguing that the UK should stay in the EU is the same as for those pressing for an exit: come up with a clear, evidence-based vision for the future.” Open Europe research: Trading Places Times: Cridland  The ECB holds its monthly meeting today but is not expected to alter interest rates or take any further action to try to ease the crisis. It is expected to signal that its policy will remain easy and accommodative for some time.  FT Welt  The European Commission announced yesterday that it will ease government budget deficit targets slightly this year and next by allowing infrastructure spending, when co-financed by the EU, to be excluded from deficit calculations, on a case-by-case basis. Italian Prime Minister Enrico Letta declared the move a victory.  FT  Italy’s public deficit stood at 7.3% of GDP in the first quarter of 2013. The target for this year is 2.9% of GDP. Meanwhile, Italy’s centre-left Economic Development Minister Flavio Zanonato warned this morning that it will be “difficult” to pay back the whole €40bn of state debt to private firms this year – as demanded by Silvio Berlusconi’s party. Il Sole 24 Ore La Stampa Repubblica  The Sun reports that according to government figures obtained by Conservative MP Priti Patel, 250 new EU measures were introduced in the UK in 2011 and 2012. Of these, 74 were responsible for additional costs of £5bn to the UK economy.  Open Europe research: Still out of Control Sun  The European Parliament yesterday voted to accept the compromise over the long-term EU budget negotiated by EU member states and MEPs last week. However, the vote is only indicative, with a binding vote not due to take place until autumn.  Open Europe blog Reuters  The Times cites a House of Commons research paper which suggests that the UK would face a substantial financial cost if it left the EU as it would have to settle its share of funding for EU projects already in the pipeline. The report also concluded that “For practical reasons, the UK is likely to keep significant amounts of laws of EU origin”. Times