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Der Spiegel: Second Greek bail-out package could reach €100bn;
Protests mount in Greece against new austerity measures
Speaking after a meeting with Greek Prime Minister George Papandreou in Athens on Friday, Eurogroup Chief Jean-Claude Juncker said: “I expect the Eurogroup [eurozone finance ministers] to agree to additional finance being provided to Greece with strict conditions attached…These conditions will include, among others, private sector agreements on a voluntary basis.” Details of the new rescue package are expected to be agreed at a meeting of EU finance ministers on June 20. Les Echos reports that, according to ECB executive board member Lorenzo Bini-Smaghi, Greece will need between €60bn and €70bn for 2012-2013. According to Spiegel, experts from the German Ministry of Finance and the so-called Troika (EU Commission, ECB and IMF) believe that the second bail-out package could reach €100bn.
The paper also notes that German Deputy Finance Minister Jörg Asmussen has said that without private creditors being involved in the second Greek bail-out, the German Bundestag would not approve the second rescue package, which would effectively condemn Greece to bankruptcy. The leader of the FDP in the Bundestag, Rainer Brüderle, has warned that the Bundestag would not approve a second Greek bail-out, saying that "a restructuring could make sense at a point X in time", suggesting that Greece would need to decide on its own if it wants to remain a member of the eurozone. FT Deutschland reports that support is building for a Finnish proposal to securitise Greece’s assets as a form of collateral in return for a second bail-out package.
Meanwhile, negotiators from the EU/ECB/IMF said over the weekend that they expected Greece to receive the next instalment of the first bail-out loan in early July. EUobserver reports that, as part of the deal struck on Friday, the Greek government has pledged to establish a specialised agency to speed up asset sales. The article notes that EU Economic and Monetary Affairs Commissioner Olli Rehn has said in a statement that the EU is also considering providing Greece with further assistance in taxation matters. Media reports claim that yesterday between 80,000 and 100,000 people rallied in Athens to protest against the new austerity measures that the Greek government has to push forward in return for further financial assistance from the EU and the IMF.
Spiegel Nieuws.nl Reuters Handelsblatt FT WSJ FAZ FTD Die Welt Euractiv Vima Kathimerini Sunday Telegraph WSJ EUobserver Reuters France Les Echos Bild
Socialist party loses at Portuguese ballot box amid austerity blues
Portugal's centre-right PSD party defeated the Socialist PS government by 38.6% to 28.1% at yesterday’s general election, the lowest result for the Socialist party in 20 years. Pedro Passos Coelho, PSD leader, will now initiate negotiations to form a majority coalition government with its traditional allies, the conservative CDS-PP, who won 11.7% of the vote, reports Público. A record 41% of the electorate abstained from voting.
The new government will have less than a month to implement harsh austerity measures in order to receive the second tranche of the EU/IMF bail-out. Passos Coelho guaranteed that his government is committed to implementing the measures. An article in i informação notes that the election result was a failure for anti-IMF/anti-troika rhetoric as “the votes secured by the PSD and the CDS…gave a clear mandate to fulfil the troika’s programme”.
Expresso Expresso 2 Independent EUobserver FT Jornal de Negocios Jornal de Negocios Guardian Euractiv European Voice Irish Independent El Pais i informação i informação 2 Expresso: Raposo Público
In response to ECB President Jean-Claude Trichet’s calls for a single EU finance ministry, Open Europe’s Stephen Booth was quoted in Saturday’s Mail saying, “Greater fiscal union in the Eurozone would have a big impact on the UK — if decisions on competition or specific sectors were made in Europe, it would affect us”.
Saturday’s Mail
Eurozone comment round-up
In FT Magazine, Simon Kuper argues, “The point is that there was never much economic logic behind the euro – certainly not a euro that includes everyone from Germany to Greece. Economics wasn’t what the currency was about. Rather, the euro is a war baby…The war has faded, and that changes everything. Germans are now wondering why they should pay the debts of Greeks and Portuguese. Judged on economics, it never made sense.”
In the Sunday Telegraph, Andrew Lilico argued, “What seems much more likely now is not that Germany and France pay off [Greece’s] debts; merely that they help Greece meet its interest payments for a while so as to put off the formal moment of default until it seems like the German and French banks might be able to take the hit.”
On the NYT Economix blog, former IMF Chief Economist Simon Johnson discusses France’s “determination” to run the IMF and notes, “The managing director of the IMF is the impresario of any bail-out and oversees the big decisions that must be negotiated with all significant stakeholders. This leaves enormous scope for discretion.” He argues: “The goal of these various [eurozone] bail-outs is to ensure that German and French taxpayers do not realise the full extent of their losses or appreciate the ways in which their banks have been mismanaged.”
In a comment piece, former chief editor of Handelsblatt Bernd Ziesemer laments the "steady loss of powers of the German Parliament...whether it concerns the eurozone bailout fund, the aid to Greece, the moratorium on nuclear power plants". He notes that "one could speak of a new kind of mentality of ‘emergency decrees’, if that concept wasn't so historically burdened."
Sunday Telegraph: Lilico FT: Kuper NYT Blog WSJ: Stelzer BBC: Peston WSJ: Whitehouse FT: Münchau FTfm: Dizard Handelsblatt: Ziesemer
Writing in the Sunday Telegraph, Peter Oborne argued that “far from pursuing a rigorous policy of Euroscepticism, the Prime Minister [David Cameron] has consistently conducted himself as pro-European…Although Cameron still articulates the language of Euroscepticism, he is in practice the most pro-European prime minister since Edward Heath”.
Sunday Telegraph: Oborne
The FT reports that concerns about the real size of Spain’s budget deficit are deepening after the incoming local administration of the centre-right Partido Popular revealed that the Castilla-La Mancha region is “totally bankrupt” and that it will be hard to find the money to pay the salaries of the region’s 76,000 civil servants next month.
FT El Pais
The Guardian reports that EU plans to include airlines in the emissions trading scheme as of next year would cost the industry €1.1bn, leading to a potential trade war with China, Russia and the US.
Guardian FT Reuters EUobserver
Euractiv reports that the European Parliament and EU member states remain divided over the economic governance package, particularly as to who should hold decision-making power for policing public debt. On 7 June the Commission will adopt draft recommendations and a final decision is expected on 20 June.
Euractiv EC Press Release
The European Court of Human Rights is taking on four new cases of British Christians who believe they have been discriminated against because of their faith, reported the Sunday Telegraph.
Sunday Telegraph
The FT reports that EU Commissioner Michel Barnier has responded to criticism from insurance companies that new capital rules are too conservative, stating that the claims “have not been confirmed by evidence” and that the changes are necessary.
FT
The FT reports that a “special regime” will apply for pension funds over the next four years, with their OTC derivatives trades exempt from clearance requirements via central clearing houses.
FT
Writing in Handelsblatt, European Commissioner Cecilia Malmström notes that "the European Commission has decided to set up a special observer mechanism of the EU (...) to report on the fight against corruption in the 27 member states." She adds that "we also need to safeguard that EU funds are being spent correctly".
Handelsblatt: Malmström
Austrian daily Kronen Zeitung reports on a new poll revealing that more than 70% of Austrians are dissatisfied with the EU, complaining that Austrian interests in the EU "are insufficiently being met".
Kronen Zeitung
An opinion poll in Spain gives the conservative opposition party PP a nation-wide overall margin of 13.8% over the ruling Socialists ahead of next year’s elections, reports El Pais.
El Pais
The Sunday Times reported that the EU is subsidising a European action hero ‘Captain Euro’, created to teach children about the European federal idea.
Sunday Times
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