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Greek referendum on continued euro membership splits government;
Merkel: “Euro stability more important than Greece”
Following a tense meeting yesterday with German Chancellor Angela Merkel and French President Nicolas Sarkozy, Greek Prime Minister George Papandreou confirmed that the referendum he surprisingly announced on Monday would effectively decide on whether Greece would remain in the eurozone. The possibility of Greece leaving the euro was explicitly mentioned by Merkel and Sarkozy for the first time, with the German Chancellor saying, “The referendum…in essence is about nothing else but the question, does Greece want to stay in the eurozone, yes or no?” The leaders also made it clear that Greece would not receive its next tranche of emergency aid until the referendum had passed, leading to speculation about how long the Greek government can remain solvent in the absence of the planned €8bn cash injection from the EU.

Open Europe’s Raoul Ruparel appeared on the BBC’s Today programme and Sky News this morning, discussing the situation in Greece and the possible consequences of a ‘no’ vote in the referendum. Open Europe’s Pieter Cleppe was interviewed by Polish Radio on the G20 summit and the Greek referendum.

The Greek cabinet is holding an emergency meeting today as some ministers, including Finance Minister Evangelos Venizelos, distanced themselves from Papandreou’s decision to push ahead with referendum plans. Venizelos rejected the idea of a referendum on Greece’s membership of the euro, arguing that “Greece's place in the euro is a historical conquest by the Greek people that…cannot be made dependent on a referendum.” The target date for the referendum is 4 December, although it will only take place if the government survives a confidence vote, expected to be held late on Friday.

Greece’s decision to hold a referendum has continued to attract criticism, with French Europe Minister Jean Leonetti saying that “Greece is…something we can do without.” Eurogroup Chairman Jean-Claude Juncker said that Papandreou’s behaviour had been “disloyal”, and also that “we would like to think that Greece will remain a member [of the eurozone], but not at any price…we are absolutely prepared for a Greek exit”, reports Die Welt.

The Guardian reports that David Cameron will urge EU members to act urgently to put more ‘meat’ on the outlines of the deal agreed last week, but has refused to offer any direct assistance, although the BBC’s Political Editor Nick Robinson reports that Britain is standing by to give more money to the IMF so that it can, in turn, lend more money to struggling Eurozone countries.
Times Independent Telegraph Guardian Guardian 2 Guardian 3 Guardian 4 Mail ExpressBBC BBC 2 BBC 3 BBC: Robinson EUobserver EUobserver 2 EUobserver 3 EUobserver 4 FT FT 2 FT 3 FT 4 FT 5 FT 6 FT 7 FT AlphavilleCityAM CityAM 2 CityAM 3 WSJ WSJ 2 EurActiv European Voice European Voice 2 Irish Times Irish Times 2 Irish Times 3 Irish Times 4 IHT Irish Independent Irish Independent 2 Irish Independent 3 Le Figaro Le Monde Le Monde 2 Le Monde blogs: Leparmentier DPA Handelsblatt Handelsblatt: Berschens FTD FTD 2 Der Spiegel Welt Welt 2 Welt: HeldBild Bild 2 Bild 3 Süddeutsche Süddeutsche: Winter Elsevier SvD FT Editorial FT: Kalyvas CityAM: Heath BBC: HewittBBC: Peston BBC: Flanders Coulisses de Bruxelles Le Figaro: Editorial Times: Cavendish Times: ManolopoulosTelegraph: Werner Handelsblatt: Berschens Spectator: Leader Spectator: Forsyth Polish Radio: Cleppe

Open Europe’s Director Mats Persson is quoted by Reuters warning against a ‘eurozone caucus’, and arguing that, should the eurozone achieve greater political integration, “The risk would be that eurozone ministers might meet in the weeks of some financial turmoil and decide to beef up, say, a ban on short-selling and agree a common position, and then they get the Romanians and the Bulgarians on board and effectively outvote the Swedes and the British [under the qualified majority voting system].”
Reuters

Employment Minister pledges to stem “endless tide” of EU laws
The Telegraph reports that Employment Minister Chris Grayling yesterday told the Federation of Small Businesses that the Government should “take a step back” and reduce the regulatory burden on firms. He noted, “Whilst there are many things that we can change ourselves, we also have to deal with the European dimension of health and safety law. From there, the tide of regulation seems endless. It will hold back growth, it will cost jobs, it will make Europe more uncompetitive, and it has to stop. My philosophy on health and safety is very simple. We should be tough on employers who risk death or serious injury, but we should leave the rest to work with as little interference as possible.”
Telegraph

Bild: “Ms Merkel, we also want a referendum!”
In response to Greece’s proposed referendum, on its front page, Bild calls for the German people to get a say on whether they are willing to continue bailing out Greece. The paper argues, “No more billions for Greece, they should have the euro taken away from them.” A number of politicians from Chancellor Merkel’s sister party, the CSU, have also come out in favour of a referendum, including Secretary-General Alexander Dobrindt, who said that: “fundamental decisions on Europe’s future should become connected with referendums.” Separately, in an interview with Die Welt, FDP Secretary-General Christian Lindner said that he did not want his party to be “infiltrated by eurosceptics.”
Bild Bild 2 Welt Welt: Linder

Italian government adopts new measures, but borrowing costs continue to rise;
Berlusconi and Tremonti clash during emergency cabinet meeting
Il Sole 24 Ore reports that the Italian government yesterday endorsed new emergency measures, including plans to liberalise certain professions and services at the local level, as well as a sell-off of state assets, while a wealth tax has not been envisaged for the moment. Yesterday’s emergency cabinet meeting was very tense, with Italian Economy Minister Giulio Tremonti quoted by Il Corriere della Sera telling Italian Prime Minister Silvio Berlusconi, “Disasters will happen on the markets on Monday if you, Silvio, decide to remain where you are and don’t take a step back. In the eyes of both Europe and the markets, like it or not, the problem is you.”

The adoption of the new measures has had no impact on Italy’s borrowing costs, which continue to rise. The interest rate on Italy’s ten-year bonds touched 6.5% this morning. Meanwhile, La Repubblica reports that six MPs from Berlusconi’s party have signed a letter urging him to step down.
Repubblica Repubblica 2 Corriere della Sera 3 Il Sole 24 Ore 2 Corriere della Sera Corriere della Sera 2 Il Sole 24 Ore 3 Corriere della Sera 4 Il Sole 24 Ore Il Sole 24 Ore 4 La Stampa Repubblica 3 FT WSJ European Voice

The European Court of Auditors is due to publish its annual report on EU accounts on 10 November.European Voice reports that EU auditors are expected to highlight an increase in the error rate in cohesion payments.
European Voice

The Telegraph reports that Attorney-General Dominic Grieve has told ECHR judges that they should “not follow the road of seeking to impose restrictive uniform solutions” on controversial social issues such as prisoners’ voting rights.
Open Europe research Telegraph

The FT reports that, in response to the Archbishop of Canterbury’s remarks in favour of a financial transactions tax, yesterday David Cameron told the Commons, “We must be careful that we don't allow other countries, including some European countries, to use a campaign for this tax – which they know is unlikely to be adopted in the short term – as an excuse for getting off their aid commitments.”
FT CityAM Independent: Prosser

New on the Open Europe blog

Papandreou pushes ahead with plans for a referendum: This is blasphemy, this is madness…this is Greece!
Open Europe blog