Meanwhile, the Bank of Cyprus, the largest Cypriot bank, warned yesterday that “there is an imminent threat of Cyprus joining the European Union’s support mechanism”, meaning another bailout could be just around the corner. The bank called “for immediate and effective action" to shore up the country’s finances. In an interview with Le Figaro, Luxembourg’s Prime Minister Jean-Claude Juncker has said that he is in favour of having a ‘Eurozone Council’ of heads of state and government, chaired by European Council President Herman Van Rompuy. Separately, French MPs will vote on France’s contribution to the second Greek bailout in September, when an extraordinary session will be convened. France’s public debt will increase by up to €15bn by 2014, although the pace will depend on Greece’s financing needs, reports Les Echos.Open Europe Europe
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Tuesday, 2 August 2011
Contagion fears continue to hit Italian economy;
Cyprus could be the next country to seek a bailout
Fears over the eurozone crisis continued to hit Italy with its cost of borrowing topping 6% and its leading banks seeing huge falls in their stock prices. Shares in Unicredit, Intesa Sanpaolo and Monte dei Paschi, three of the country’s largest banks, were suspended temporarily in an attempt to halt their massive single day declines. Spain fared only slightly better, seeing its stock market fall and borrowing costs increase to 6.21%.
Writing in the FT, Willem Buiter – Chief Economist at Citigroup – argues that the latest instalment of the eurozone crisis “demonstrates that fiscal federalism is not going to happen.” This leaves the option of disbanding or “a ‘you break it you own it’ Europe where insolvency of a sovereign is settled between the taxpayers of that sovereign and its creditors, without any permanent financial support from any other nation’s taxpayers.” In Le Monde, France’s former Foreign Minister Hubert Védrine argues that federalism is “no miracle solution” to the eurozone crisis.
FT CityAM WSJ Corriere della Sera Repubblica EUobserver Les Echos FT 2 WSJ 2 Le Figaro: Juncker Le Figaro Les Echos 2 Presse Welt Telegraph Irish TimesGuardian Guardian 2 Guardian 3 Guardian 4 Guardian 5 FT: Buiter FT: Editorial WSJ: Heard on the Street Le Monde: Védrine El País El País 2
The FT reports that the IMF has called European Commission proposals to implement the Basel III capital rules for the banking sector “disappointing”, noting that the UK is “rightly advocating for European legislation…that enables the establishment of strong standards that exceed the Basel III minima.”
Bild reports that some EU Commissioners are calling for retirement age in Europe to be automatically aligned with life expectancy. European Commission President José Manuel Barroso is quoted saying that the EU “should have a more active role in this matter.”
EUobserver reports that the EU has extended its travel ban and asset freeze list to an additional five people close to the Syrian regime, including Syria’s Defence Minister General Ali Habib Mahmoud.
The Express reports that its e-petition calling for a referendum on EU membership has attracted 40,000 votes since it was launched on the weekend.
The US House of Representatives voted by 269 to 161 in favour of the plan to raise the US debt ceiling yesterday. The US Senate will vote on the plan today and is expected to approve it with a large majority, allowing US President Barack Obama to enact the deal into law ahead of the deadline at midnight tonight.
When those who claim to know the EU facts get the EU facts wrong: The EU and the ECHR
Will Labour turn against EU free movement of workers?
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