Daily Press Summary
Germany resists calls to boost eurozone bailout funds; Only six coalition German MPs have said they will definitely vote against second Greek bailout
Germany looks set to resist an increase in the size of the eurozone bailout funds, despite increasing pressure from the IMF. The Netherlands and Finland declared their support for merging the EFSF and the ESM, the eurozone’s temporary and permanent bailout funds. A spokesman for Chancellor Angela Merkel said that such an increase “is not necessary” in the eyes of the German government. It was hoped an agreement could be struck at the 1 March summit although reports suggest that Germany may now seek to delay the decision.
The Greek parliament will vote today on legislation which aims to implement the list of ‘prior actions’ which Greece must complete in order to gain full approval for the second bailout, including the law to retroactively introduce collective action clauses into Greek bonds. Fitch yesterday cut Greece’s credit rating to ‘C’ – the last notch above default – and warned that a “default is highly likely in the near term.” The Greek government yesterday signed an international agreement on cooperation in tax issues through the OECD, in an attempt to tackle tax evasion.
The Bundestag’s Budgetary Committee is to consider the details of the Greek bailout agreement tomorrow ahead of a full vote scheduled on Monday. Der Spiegel reports that while concerns over the viability of the package are widespread among the governing coalition, only six MPs have so far confirmed they would definitely vote against it. Die Welt reports that banks and insurance companies are concerned that they could face legal action from small shareholders if they agree too big a write-down on their holdings of Greek debt.
Bankingnews.gr reports that Greek banks’ borrowing from the ECB could be transferred to the Greek central bank emergency liquidity assistance (ELA) programme – a tool which central banks can use to provide loans to banks when they do not meet the requirements to borrow from the ECB – since they may not be able to access the ECB while Greece is classified as in ‘default’ by the rating agencies.
The European Commission has today published its revised growth forecasts for 2012. Eurozone GDP is expected to contract by 0.3%, contrary to last autumn’s prediction of a 0.5% growth. Italy’s GDP is expected to contract by 1.3%, and Spain’s by 1%. Germany and France’s economies will also grow less than expected. El País reports that, according to EU sources, in light of the worsened growth prospects, the Commission will make deficit reduction targets “slightly more flexible” for countries that need it, particularly Spain. Meanwhile, Spanish Prime Minister Mariano Rajoy will meet his Italian counterpart Mario Monti in Rome today.
Open Europe’s Raoul Ruparel is quoted by ABC news discussing the Greek package.
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Lord Owen: “How to remain a nation state – we must have the confidence to set out a new design for two Europes”
In an article in this week’s Spectator entitled “How to remain a nation state”, Lord Owen notes that EU leaders, including Angela Merkel and EU Justice Commissioner Viviane Reding, have a long term plan for further EU integration and centralised European government. He asks, “How should Britain react? We should firstly not react! This is our EU by Treaty; it can only be changed by unanimity and we must have a credible but different design and the determination to stay at the negotiating table until there is unanimity. No walk outs, just quiet persistence. We must have the confidence to set out a new design for two Europes — a wider and an inner — that will live alongside, in harmony with each other. It will involve substantial restructuring not only of the existing EU but also the European Economic Area (EEA).”
Lord Owen adds, “In September 2013 Merkel will seek the German public's endorsement for her future design in the Federal Election… Any UK political party that ignores the rapidly emerging challenge in Europe is putting its head in the sand.”
Spectator: Lord Owen
Germany’s Minister for European Affairs, Michael Link, told the Irish Times that the eurozone is “trying to design everything that is on the table [in terms of the fiscal pact] in a way which would be okay in the eyes of the Attorney General and the Irish Constitution so that no referendum is needed.”EUobserver reports that the Danish justice ministry has concluded that Denmark's parliament can ratify the EU’s fiscal treaty without a referendum.
EUobserver Jyllands Posten Irish Times
Commission threatens Hungary with €500m fine for excessive deficit
The EU Commission yesterday announced that unless Hungary reduced its budget deficit to below 3% of GDP by the end of the year, it would be stripped of part of its 2013 allocation from the EU’s cohesion funds, amounting to €500m. Hungarian authorities have questioned the legality of the move. FAZ reports that if the fine is imposed, it would be the first time that a violation of EU rules on macroeconomic stability would be backed with actual sanctions.
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Microsoft filed a complaint against Google and Motorola Mobility with EU antitrust authorities yesterday. The computer giant accuses the companies of charging too much for the use of their patents, and of blocking the sale of Microsoft goods.
EU Trade Commissioner Karel De Gucht has asked the ECJ to clarify whether the anti-piracy treaty (ACTA) is in line with the EU’s Charter of Fundamental Rights with regards to freedom of expression, as well as EU data protection rules and EU intellectual property rights.
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La Stampa reports that Silvio Berlusconi is seeking to convince Mario Monti to run as Italian Prime Ministerial candidate for his People of Freedom party in the next general elections. However, the paper notes that Monti has so far declined the offer.
European Voice reports that EU member states are split over imposing sanctions on Syria, noting that the plan faces resistance from several southern EU countries, which fear that the sanctions could undermine their trade with the country.
The European Parliament's Industry Committee is expected to call next week for the European Commission to set aside an unspecified number of carbon allowances – credits for emitting greenhouse gases – in the 2013-20 phase of the EU's emissions trading scheme in order to raise the carbon price.
Germany, which blocked Serbia's EU accession application in December due to concerns over Kosovo, is this week expected to give the green light for the Balkan country to be made a candidate for membership when EU leaders meet in Brussels next week.