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New on the Open Europe Blog Is a new eurozone parliament on the cards? Open Europe Blog What does the reshuffle mean for Europe? (clue Crime and Police) Open Europe Blog So Bankia is still a viable bank...? Open Europe Blog
Daily Press Summary Handelsblatt: Quartet of EU presidents working on plans for a new eurozone parliament Citing EU diplomats, Handelsblatt reports that plans being developed by Council President Herman Van Rompuy, Commission President José Manuel Barroso, Eurogroup chief Jean-Claude Juncker, and ECB President Mario Draghi, would see the creation of a new ‘eurozone parliament’. The new parliament, in which both MEPs and national parliamentarians would sit, would have powers over eurozone members’ fiscal and economic policy. Other proposals include a stronger role for the European Commission to veto national spending plans. The far-reaching proposals would require changes to the EU Treaties. Handelsblatt ECB to announce unlimited bond purchases but with emphasis on conditions Bloomberg reported yesterday that the ECB will at today’s monthly meeting announce a new bond buying plan termed “monetary outright transactions”, which will involve potentially unlimited purchases of short term government debt (under three years). However, the purchases would be sterilised to offset any inflation fears and the ECB will not publicly announce a cap on the spread in borrowing costs between different eurozone members. Countries wishing to receive such assistance will also have to apply to the eurozone bailout funds and adhere to a strict reform programme. Reports suggested that Bundesbank President Jens Weidmann remained the only member of the ECB’s Governing Council to object to the proposed plan. The FT reports that Netherlands, Belgium, Luxembourg and Finland have insisted that a discussion of plans for a credible exit strategy from the bond buying be added to the agenda for today’s meeting. In a joint statement leading business groups from France, Germany, Italy and Spain issued a call for greater action from both governments and the ECB to safeguard the euro, although they added that the current pessimism was unjustified with structural reforms beginning to take effect. Carsten Schneider, budgetary spokesman for the SPD, accused German Chancellor Angela Merkel of forcing the ECB to break its mandate and take on a governing role due to her inability to make decisions, according to Handelsblatt. Bloomberg FT WSJ Bloomberg 2 Independent Irish independent Euractiv BBC: Hewitt Telegraph The Irish Times Corriere della Sera Sole 24 Ore Le Monde Le Monde2 Le Figaro Repubblica FT Times: Leader TimesGuardian European Voice FT: Atkins FT: Barber FT: Davies Handelsblatt Persson: Cheap ECB cash could prove to be the worst form of bailout Writing on his Telegraph blog Open Europe’s Director Mats Persson warns against becoming reliant on ECB intervention to save the euro, arguing, “Once the ECB taps are opened, it’s incredibly hard to turn them off without causing huge market distortions and creating an even graver crisis than the one that the original intervention was meant to stave off. That is why the ECB is right to insist on countries committing to reforms (through an intergovernmental decision) before it bails them out. Perhaps that mix could work for struggling Eurozone countries. But there's also a huge risk that Europe, in the long-term, will pay a very high price for what is only (at best) a short-term fix.” Telegraph: Persson Austerity puts strains on Greek coalition; New poll puts far-right Golden Dawn as third largest party in Greece Kathimerini reports that Greek Prime Minister Antonis Samras has dismissed his coalition partners’ fears over the latest €11.5bn austerity package, dismissing calls to relax some of the more onerous measures. The Greek government will restart discussions with the EU/IMF/ECB troika tomorrow, although officials have insisted the talks will focus on current reform plans, dismissing reports of plans for a six day working week and deeper labour market reform. Meanwhile, Dutch Prime Minister Mark Rutte said during a televised election debate that “Enough is enough…the dikes around Greece are high enough. Leaving the euro may become unavoidable. That is a decision for Greece.” A new poll published today in Greek weekly To Podiki puts Golden Dawn as the third largest party with 10.5% of the vote, behind New Democracy on 25% and SYRIZA on 24%, but ahead of PASOK which has slipped to 8%. Kathimerini Kathimerini 2 Euractiv The FT reports that, according to unnamed officials, Italy could be forced to seek an EU bond buying programme in exchange for significant reforms as uncertainty looms ahead of the next election. FT Germany yesterday struggled to issue ten year debt, managing only to sell €3.6bn of bonds compared to a target of €5bn as investors waited to hear details of potential ECB bond buying. FT WSJ The Finnish economy contracted by 1.1% in the second quarter of the year as the eurozone crisis dampened demand for exports. WSJ European Internal Market Commissioner Michel Barnier yesterday launched a consultation on the future of Libor and other similar key lending rates as he seeks to clamp down on financial manipulation across the EU. City AM Handelsblatt reports that the eurozone is considering introducing a minimum corporate tax to discourage “unfair” tax competition within the monetary union. Handelsblatt The IMF yesterday approved a €920 million loan tranche for Ireland, with the Irish Independentnoting that new figures suggest the Irish economy expanded more than previously thought last year and the government is closer to reaching the debt targets set out by the troika. Irish Independent Irish Times WSJ European Commission trade officials are to open a formal investigation today into Chinese solar panel manufacturers to examine whether or not the companies violated trade rules by dumping their products, or selling them below cost, on the EU market. FT WSJ Le Figaro Poland will miss its deficit target this year, the country's finance minister said yesterday, as the economy shows increasing signs of a slowdown caused by slumping domestic demand and the impact of the eurozone crisis. FT