Cameron and Merkel set for tense talks on EU Treaty change, the role of the ECB and financial transaction tax It is unclear exactly what Germany’s plans for Treaty change would entail, but the Telegraph has obtained a leaked memo, from the German foreign office, setting out changes to create a “stability union” that would be “immediately followed” by moves “on the way towards a political union”. The proposals urge that the European Stability Mechanism (ESM), the permanent eurozone bailout fund that will be established by 2013, should be transformed into a European Monetary Fund with “real intervention rights” in the budgets of euro members who have received bailouts. The proposed Treaty changes also include “automatic sanctions” beyond those that can currently be set by the European Commission and a mechanism to demand action from the European Court of Justice if eurozone rules are “consistently violated”. The negotiating document also explicitly examines ways to limit Treaty changes to speed up the reforms, which would avoid the need for a referendum in the UK. The FT suggests that Cameron will tell Merkel he is prepared to accept “limited” Treaty change – which has to be approved by all 27 EU members – but that he will seek some kind of “emergency brake” mechanism to protect the City from discriminatory EU regulation in exchange. He will also insist that the new arrangements do not lead to the 17 eurozone countries acting as a caucus to impose their will on the single market. But the Telegraph notes that senior Government officials confirmed that they would not demand that EU powers should be “repatriated” in return for the changes requested by Germany. Open Europe’s Research Director Stephen Booth is quoted on the front page of the Telegraph arguing that the most far-reaching German plans “would be the first step towards a vision of 'political union’ that would have major consequences for the future of the entire EU, and therefore the UK’s place within it. Merkel is daring Cameron to call her bluff, but if the UK is serious about taking a leadership role in shaping the EU, Cameron will have to take a stand sooner rather than later.” Open Europe’s Raoul Ruparel appeared onSky News this morning, discussing the main aspects of the Cameron-Merkel meeting, while theTelegraph’s live blog credits Open Europe’s Pawel Swidlicki for translating the document from German into English. In the FT, German Foreign Minister Guido Westerwelle writes, “Changing the EU Treaty at 27 – however tiresome and difficult that may seem – is the best way to prevent a disconnect between the eurozone and remaining EU member states…A separate Treaty limited to the eurozone can only be a last resort.” A leader in Handelsblatt warns, “Would it be wise to marginalise the British, not to use their weight in foreign policy? What would European competitiveness be without them? Would there be an internal market today? And in which position would Germany be if there would only be the embracement of the French?” Meanwhile, Bild asks, “What the British are still doing in the EU anyway?” In the Telegraph, David Davis MP argues that the UK should seek to “reclaim control of justice and home affairs”, “reassess Britain’s contribution to the EU budget” and “take control over key economic issues ranging from business regulation to striking trade agreements.” FAZ: ECB has set €20bn weekly limit on bond purchases; The Irish Times reports that German MPs saw plans for the Irish 2012 budget before Irish MPs, after documents were forwarded to the Bundestag Budget Committee by the German Finance Ministry and were subsequently leaked. Under the bailout requirements the Irish government must share draft budget plans with the other member states via the Commission. A European Commission report on Greece published yesterday states that Greece has €60bn in unpaid taxes, with only €6bn-€8bn viewed as possibly collectable. The report adds that the size of the arrears “casts a doubt over the efficacy of the overall tax administration.” The FT reports that Switzerland and Greece have opened talks on a deal that would allow the Greek government to tax some of the assets which have been moved between the two countries during the Greek crisis. Meanwhile, at yesterday’s auction, France managed to sell €7bn worth of medium-term debt at higher interest rates than the previous auctions. In addition, the spread between French and German ten-year bonds yesterday reached above 200bps (2%) for the first time in the last two decades, reports Les Echos. Die Welt reports that German Finance Minister Wolfgang Schäuble said that it is in Britain’s interest to contribute to the stability of the euro, given that one day the whole EU will have the same currency. “[It will take some time], but it might go faster than many on the British island believe,” he said. New Italian government wins first confidence vote in Senate; La Stampa reports that Monti will travel to Brussels on Tuesday to meet European Council President Herman Van Rompuy and Commission President José Manuel Barroso. On Wednesday, Monti is due to meet French President Nicolas Sarkozy and German Chancellor Angela Merkel in Strasbourg. Meanwhile,Il Sole 24 Ore reports that outgoing Prime Minister Silvio Berlusconi yesterday told his Senators that Monti’s government will remain in office “only for as long as we decide, based on what’s useful for the country but also on our electoral campaign and what the opinion polls will tell us.” Sir Martin Jacomb: It’s time for eurozone countries to revert to national currencies In an op-ed in the Times, former Spanish Prime Minister José María Aznar argues, “While all nations need to reform, we must avoid falling into the political and economic trap of seeking to harmonise reforms across the EU…We must avoid Europe being broken up into first, second or third-division countries, and we must enable each state to achieve common goals, but through their own strategy. Nation states still have the most important role in pushing forward the reforms needed by the whole of Europe, whether they are in the euro or not. Only decisions made at national level will have the necessary legitimacy; it would be a mistake to take shortcuts, bypassing or neglecting the institutions of national democracies.” City AM reports that EU Internal Market Commissioner Michel Barnier has delayed plans to toughen up regulation of the auditing industry due to the worsening eurozone crisis. Handelsblatt reports that the President of the German Supreme Court, Andreas Voßkuhle, has warned against the uncontrolled development of the EU into a European federal state, saying, “We shouldn't pretend that a lot remains of the sausage. We already have cut off of a lot of slices from national sovereignty." He added that “we're now entering a critical area” and that “a gradual, silent transformation into a European federal state is taking place.” Speaking at the European College of Bruges yesterday, Finland’s Europe Minister Alexander Stubb said that his country favours the Dutch proposal to create a budget ‘tsar’ within the European Commission. Stubb also suggested that he would “combine the functions of the Presidents of the Commission, the European Council and the Euro Area Summits into one high post,” reports EUobserver. On his Le Monde blog, French journalist Arnaud Leparmentier reports that Benoît Coeuré, a Deputy Director-General at the French Treasury, is expected to be appointed as a member of the ECB’s Executive Board when Italy’s Lorenzo Bini-Smaghi leaves the post at the end of the year. European Voice reports that EU finance ministers and MEPs will today meet in the Conciliation Committee to try and reach an agreement on next year’s EU budget. European Voice reports that yesterday the European Parliament’s Constitutional Affairs Committee endorsed a stricter code of conduct for MEPs, following the cash-for-amendments scandal uncovered earlier this year. The new rulebook must now get final approval from the European Parliament’s plenary session in December, and is expected to enter into force from 1 January 2012. Süddeutsche reports that the German government is opposed to European Commission plans to register Passenger Name Records (PNR) for a period of fifteen years. The Telegraph reports that the European Commission has banned producers from claiming that regular water consumption is the best way to rehydrate the body. The article notes that producers of bottled water who infringe the ban can face up to two years in prison. As Cameron and Merkel meet to discuss EU Treaty change, is this what Merkel wants?Open Europe Europe
In Berlin today, David Cameron will meet with German Chancellor Angela Merkel to discuss German plans for an EU Treaty change to strengthen economic union in the eurozone. Cameron will restate his opposition to Franco-German proposals for a financial transaction tax and is also expected to urge Merkel to allow the European Central Bank (ECB) to bailout the single currency by acting as a lender of last resort.
Telegraph Telegraph 2 Telegraph: Leader Guardian Times BBC BBC: Hewitt Independent FT WSJEUobserver Express Mail Telegraph: Warner Telegraph: Davis Le Figaro Handelsblatt: Leader Reuters BildWelt Sueddeutsche: Zaschke Hamburger Abendblatt Spiegel FT: Westerwelle Telegraph live blog
Greece has €60bn in unpaid taxes
FAZreports that the ECB Governing Council has agreed on a €20bn weekly limit for its purchases of sovereign debt, despite the growing calls for the ECB to fully backstop struggling eurozone countries. The article suggests that such a ceiling has existed for some time but has recently been lowered to its current level due to growing concerns within the Governing Council over the level of bond buying. France and Germany continued their public disagreement over the issue, while in an interview with El País, Spanish Socialist party’s candidate for Sunday’s general elections, Alfredo Pérez Rubalcaba argues, “Only the ECB can stop the [eurozone] debt crisis…There’s no other solution than the ECB saying [to investors], ‘Enough is enough, you don’t play with my debt anymore’.”
FAZ El País: Rubalcaba IHT Economist Les Echos FT WSJ WSJ 2 Irish Times IHT 2 Guardian Irish Independent EUobserver Irish Independent 2 Irish Times 2 Irish Times 3 Mail IHT 3 Irish Independent 3Sueddeutsche IHT 4 IHT 5 Telegraph Times Times 2 Guardian 2 FT 2 Les Echos Expansión Expansión El País FT 5 CityAM WSJ 4
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Berlusconi: Monti’s government will remain in office “only for as long as we decide”
Italian Prime Minister Mario Monti yesterday easily won a first vote of confidence in the Italian Senate, with 281 voting ‘yes’ and only the 25 Lega Nord Senators voting against. In his keynote speech, Monti warned that new austerity measures may need to be adopted over the next months. As expected, he also announced plans to liberalise Italy’s labour market and reform the pension system, adding that the option of a new tax on property wealth would be “explored”. Monti is expected to pass a second confidence vote in the lower house of the Italian parliament this afternoon.
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Open Europe’s board member Sir Martin Jacomb writes in the FT, “The remedy [to the eurozone crisis] may seem unpalatable but it is time to revert to national currencies. Only in this way can the poorer countries have a chance to regain competitiveness. There was a time when a division in to two or more blocks looked feasible, but it is too late for that now. The political imperative of sticking with the euro is so strong that leaders are not yet able to contemplate a reversal such as this. The tragic result of this attitude is rising unemployment and economic hardship in poorer states. The political and human cost of this is immeasurable.”
Times: Aznar FT: Jacomb IHT: Leader Independent: McRae Economist: Leader Economist: CharlemagneEconomist Irish Independent: Keenan Telegraph: Burleigh Mail: Letts Mail: Littlejohn FT: Ignatieff FT Editorial FT: Tett CityAM: Sidwell WSJ Review&Outlook WSJ: Mead Irish Times: O’Brian Irish Times: FellTimes: Leader Times: Collins Coulisses de Bruxelles
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Friday, 18 November 2011
Posted by Britannia Radio at 13:22