Daily Press Summary
Eurozone finance ministers postpone meeting as Greece fails to provide sufficient guarantees; Reuters: Spain could face fines for inflating deficit figures
Eurozone finance ministers have postponed their meeting to next Monday after the Greek government failed to provide all the guarantees required in order for the second Greek bailout to be approved – a written commitment by Greek party leaders that the austerity measures will be implemented regardless of who wins the next elections in April, and proof of an extra €325m in cuts in this year’s budget.
The leader of centre-right New Democracy party Antonis Samaras will send a written commitment to sticking to the austerity measures agreed with the EU/IMF/ECB Troika within the day, according to a party source quoted by Reuters. Former Greek Prime Minister George Papandreou is said to have already provided a signed undertaking. Meanwhile, the FT reports that, although the agreement on the second Greek bailout is still pending, eurozone finance ministry officials are moving ahead with plans for a Greek debt restructuring – which could kick off as early as Friday. According to a document circulated among finance ministry officials, eurozone countries must raise €93.5bn to finalise the debt swap. Of that amount, Greece’s private bondholders would get €30bn as “sweeteners” to take part in the deal, while €23bn would be used to recapitalise Greek banks, which will incur huge losses following the cuts in the value of their holdings of Greek bonds.
In an interview with Handelsblatt, Bundesbank President Jens Weidmann said that, while he would have no problem with the eurozone’s temporary bailout fund, the EFSF, purchasing eurozone government bonds from the ECB and national central banks in order to ease pressure on them, he is against central bank participation in Greek debt write-downs, arguing, “The crucial point is that we are not allowed to waive claims against a state. That would be a form of monetary financing of a government.” Weidmann also noted that eurozone governments are wary of the plans to let the EFSF buy Greek bonds from central banks. Les Echos reports that Belgian Central Bank Governor Luc Coene has confirmed that the ECB will redistribute any profits made on Greek bonds among eurozone countries, which will then decide whether to return the money to Greece as part of the second Greek bailout.
Separately, Reuters yesterday reported that the new centre-right Spanish government could face sanctions for inflating its deficit figures for 2011 in a bid to convince the European Commission to revise Spain’s deficit reduction targets downwards. El País notes that EU Economic and Monetary Affairs Commissioner Olli Rehn has dismissed the reports as “pure speculation”, and made clear that Spain must stick to its previous commitment to cutting deficit to 4.4% of GDP by the end of the year. Meanwhile, Portuguese daily Público reports that experts from the EU/IMF/ECB Troika will arrive in Portugal today for a new monitoring mission.
FT CityAM WSJ Times Mail Telegraph Guardian Guardian 2 Independent Irish Times EUobserver Reuters Süddeutsche Welt FAZ Il Sole 24 Ore WSJ WSJ BBC Kathimerini IHT IHT 2 Les Echos FT 2 FT 3 CityAM 2 BBC FT 4 CityAM 3 FAZ Welt Reuters Reuters 2 Expansión El País El Mundo Expansión Público Corriere della Sera Irish Times Handelsblatt Handelsblatt 2 Handelsblatt 3
Head of Bosch: Greece should leave euro and EU
In an interview with economic monthly Manager Magazin, Franz Fehrenbach, the head of Bosch - one of Germany’s largest corporations – argued that Greece was an “unbearable burden”, and that “with its phantom retirees and wealthy tax evaders, this country has no place in the EU”. He said that Greece ought to voluntarily leave both the eurozone and the EU, but that if it refused, it ought to be forced out through a change in EU law. Süddeutsche notes that his intervention is significant because of both the size of his company and the fact that German Chancellor Angela Merkel has sought out his advice in the past. Meanwhile, a survey of 300 German executives found that 57% believed it would be better for Greece to re-adopt the Drachma.
Manager Magazin Süddeutsche Bild
The European Commission announced yesterday that twelve EU states, including Italy, Spain, the UK and France, are suffering from significant economic imbalances that leave them vulnerable to further economic shocks, and as a result they would be placed under “stringent observation” so that they do not compromise the stability of the EU.
The OECD has warned that despite its current economic success, Germany needs to implement structural reforms, including of the labour market, if it is to avoid stagnant growth in the long term.
Former speaker of the Slovak Parliament: “European project has gone too far and too fast”
In the WSJ, Marian Tupy, a policy analyst at the Cato Institute, and Richard Sulik, the former speaker of the Slovak Parliament and leader of Slovakia's Freedom and Solidarity party, write, “A Greek pull-out from the eurozone would only acknowledge what increasing numbers of ordinary Europeans understand: that the European project has gone too far and too fast, that there are better ways to achieve integration and that it might be necessary to repatriate some powers from Brussels back to the member states. To follow blindly down the current path is not solidarity. It is hubris.”
FT: Wolf FT: Barber WSJ: Tupy and Sulik Times: Kaletsky Irish Times: Laffan
The Telegraph reports that the Treasury has filed a second lawsuit against the ECB’s “location policy”, which would see clearing houses handling euro-denominated instruments forced to be located within the eurozone.
Open Europe research Telegraph
Le Figaro reports that French President Nicolas Sarkozy will announce his intention to run for re-election this evening. If re-elected, Sarkozy has said he plans to hold a referendum on the introduction of a ‘golden rule’ on balanced budgets in the French constitution, due to fears that his party could fail to secure the three-fifth majority in the French parliament which is required for constitutional amendments.
Le Figaro Le Monde Irish Times
A survey by CBOS has found that the number of Poles opposed to adopting the euro has reached an all time high of 60%, with 32% supporting adoption. Most Poles are also sceptical about a €6.27bn loan to the IMF to increase its fire power amid eurozone crisis, with 57% saying they are either definitely or generally against contributing.
Gazeta Wyborcza WSJ: Emerging Europe blog
EUobserver reports on the growing pressure on Dutch Prime Minister Mark Rutte to distance himself from a website, calling on citizens to file complaints about "central and east Europeans ... for general nuisance, pollution and labor market displacement.” The website was set up by Geert Wilders's PVV party on whom Rutte’s Liberal VVD party relies for support in the Dutch Parliament.
EUobserver reports that Bulgaria will delay implementation of the international Anti-Counterfeiting Trade Agreement (ACTA) “until other EU countries clarify their position.” Separately the Dutch Parliament has also put its ratification of the treaty on hold in order to allow time to ensure it is in line with EU human rights legislation.
Euractiv reports that the European Commission has asked airlines to report on "the amount of biomass" they use so that biofuels can be accounted as "zero emission" in the greenhouse gas emissions reports they are requested to produce each year under the EU's carbon scheme for the aviation sector.
Reuters reports that Spanish farmers pelted the European Parliament and Commission office in Madrid with tomatoes yesterday in protest against an EU trade agreement with Morocco that they say could put fruit and vegetable growers out of work and add to high unemployment.
Open Europe Research Reuters