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Open Europe

Open Europe will host a discussion in Brussels tomorrow, entitled, “Transparency and accountability in the EU institutions: What has been achieved and what are the challenges?” – with a keynote speech from Maros Sefcovic (EU Commissioner for Inter-Institutional Relations), followed by a panel debate with Diana Wallis MEP (Lib Dem, Vice-President of the European Parliament) and Mats Persson (Director of Open Europe).

For more information please contact Pieter Cleppe on pieter@openeurope.org.uk, or 0032 (0)477 684608.

Europe

France and Germany explore options for EU Treaty change;
Die Welt: German Government could support ‘Elite-bonds’ as alternative to Eurobonds
Reuters reports that Germany and France are considering several methods for enforcing the desired budgetary integration on the eurozone: a full treaty change involving all 27 EU member states, an intergovernmental treaty with just the 17 eurozone members, a Prüm-style agreement with only 8-10 states or a mini-agreement between France and Germany which other countries are free to opt in to. France in particular sees finalising fiscal discipline in the eurozone as a quid pro quo for the ECB stepping up its purchases of sovereign debt, while European officials believe Germany will reduce its opposition to such a move once stringent budget controls are in place, according to Welt am Sonntag.

Meanwhile, Die Welt reports that the German government has been drafting a plan for the introduction of ‘Elite-bonds’ – bonds jointly issued by the six euro area countries that have a Triple-A credit rating – as an alternative to the EU Commission’s proposal for comprehensive debt pooling via Eurobonds. According to the draft plan, the interest rate on the ‘elite-bonds’ would be between 2% and 2.5%, which would allow these countries to not only finance their own debts, but also assist vulnerable states such as Italy and Spain. The concept was reportedly discussed by the German, Finnish and Dutch Finance Ministers last week, and also the UK has been “intensely involved” in the deliberations, although this morning a spokesman for the Federal Finance Ministry rejected the speculation.

A poll published by ZDF last Friday showed that, in line with German Chancellor Angela Merkel’s view, 79% of Germans said they are against the introduction of Eurobonds. 63% of respondents think Merkel is doing well in managing the euro crisis, showing a 18% increase over the last month. Handelsblatt today reports on a separate poll showing that 58% of Germans oppose the introduction of Eurobonds.

In the FT, Wolfgang Münchau predicts that “the eurozone has 10 days at most” to come up with a comprehensive plan to sort out the crisis. In Die Welt, Christoph B. Schiltz argues that Europe will presumably become more German, noting, “If the common currency should continue to exist – and the chances it will are not so bad – Europe will become more German. More control, more discipline and tougher penalties.”
Welt ZDF Handelsblatt FT WSJ EurActiv CityAM FT 2 IHT Le Figaro Welt am Sonntag Reuters JDD FT: Münchau FT: Davies FT: Dizard FT: Jackson WSJ: Jenkins WSJ: Stelzer Independent: King Le Figaro: Peyrelevade Saturday’s Telegraph: Reece FT Weekend: Editorial Saturday’s Times: Parris Irish Independent: Arnold Sunday Telegraph: Halligan Telegraph blogs: Crawford Welt: Schiltz

EU Commissioner: London would lose out under eurozone financial transactions tax
In an interview with the FT, EU Taxation Commissioner Algirdas Šemeta said that a eurozone-only financial transactions tax would be “designed in such a way that it doesn’t matter where transactions are taking place. I think that London will lose out.” He added that the UK should join as the population would be “supportive of the tax”. The paper notes that Šemeta has also warned that he could take the UK to court if it fails to re-write the multibillion pound UK-Switzerland tax accord.
FT FT: Semeta FT 2

La Stampa: IMF readying €400bn-€600bn rescue package for Italy;
Moody’s warns that no eurozone country’s credit rating is safe from crisis
Italian daily La Stampa yesterday reported that the IMF is preparing a rescue package for Italy, which could be worth between €400bn and €600bn and would cover Italy’s financing needs for 12-18 months in order to buy the new Italian government time to adopt some necessary economic reforms. According to the paper, Italy would be offered an interest rate of 4-5%, much cheaper than it has been forced to pay in recent bond auctions. An IMF spokesperson this morning denied the reports.

Meanwhile, Moody’s warned this morning that “the probability of multiple defaults by euro area countries is no longer negligible,” noting that the crisis threatens the credit ratings of all eurozone governments, even if the block is kept together and more defaults are avoided.

In an interview with Frankfurter Allgemeine Sonntagszeitung, ECB Executive Board member Jürgen Stark warned, “The political pressure on the ECB is currently enormous,” adding, “There is an open debate about enlarging our tasks. That not only touches upon our independence, it even threatens it.”

The Sunday Times noted that a crunch week looms for the members of the eurozone as the governments of Italy, Spain, Belgium and France attempt to raise about €17bn in the financial markets. The FT reports that European banks are facing a funding freeze, leaving them with a $241bn funding gap this year.
Le Figaro La Stampa Corriere della Sera Expansión El País Le Monde CityAM Les Echos CityAM 2 Sunday Times Sunday Times: O'Connell Reuters FT 3 FT 4 FT Weekend FT 5 FT 6 Telegraph Saturday’s Telegraph Saturday’s Mail Irish Times EUobserver EUobserver SZ ARD FAZ Handelsblatt Der Spiegel Welt Frankfurter Allgemeine Sonntagszeitung ABC El Mundo El Pais El Economista Expresso Zonebourse Le Monde Mail Welt: Ferber Bild La Stampa EUobserver Telegraph Il Sole 24 Ore Corriere della Sera Expansión Guardian Corriere della Sera Le Figaro FT FT Weekend FT Weekend WSJ BBC

Saturday’s Express reported on its front page that former UKIP leader Lord Pearson’s European Union Membership (Economic Implications) Bill, which would require the Chancellor to set up an impartial inquiry into the economic costs and benefits arising from Britain’s EU membership, was voted through at second reading in the House of Lords.
Saturday’s Express Conservative Home: Glendening

In an interview with Die Welt, Polish Foreign Minister Radoslaw Sikorski commented on the UK’s EU policy, saying, “We [the Polish people] think differently than the British. We want the EU to be more integrated than it is now and avert dangers of disintegration. But maybe the relationships between Brussels and the member states should be rebalanced.”
Welt

Belgium’s politicians have agreed on a €11.3bn budget in a bid to calm financial markets and comply with the EU’s budget deficit regulations. The budget aims to reduce the country’s deficit to less than 3% of GDP by the end of next year.
EurActiv European Voice Guardian

The Sunday Telegraph reported that under new proposals by the European Commission, UK taxpayers may have to pay billions of pounds a year to install green technology into council houses, schools, hospitals and other public buildings. The initiative, if implemented, will cost local authorities £50bn over the next 33 years, the paper noted.
Sunday Telegraph

The FT reports that EU regulators have backed away from their proposal to force automated high frequency share traders to stay in the markets quoting prices at all times.
FT

The Mail reports that strict EU controls could threaten traditional techniques of crafting musical instruments using instrumental strings made from cow guts.
Mail

Germany is pushing for an EU-wide import embargo on Iranian oil as part of a new set of measures to prevent money flowing to the regime in Teheran and financing the country’s nuclear programme.
Sueddeutsche

UK

Saturday’s Guardian reported that Britain and France will discuss creating stronger defence ties at next Friday’s Anglo-French summit, including proposals for new air drones and a stronger role in NATO.
Saturday’s Guardian

New on the Open Europe blog

EU Treaty games: The options for Treaty change and what they would mean in practice
Open Europe blog

TGI Freitag: Friday afternoon is ‘German polls time’ at Open Europe
Open Europe blog