Daily Press Summary

Go to Daily Press Summary

German opposition: support for ‘fiscal treaty’ conditional on introduction of growth programme and financial transactions tax

06 Mar 2012

German opposition: support for ‘fiscal treaty’ conditional on introduction of growth programme and financial transactions tax
German Chancellor Angela Merkel will have to rely on votes from the opposition SPD and Green parties in order to secure the two-thirds majority required to ratify the new European “Fiscal Treaty” on budgetary discipline in both houses of the German Parliament, the Bundestag and Bundesrat. However, in a joint letter, both opposition parties have made it clear that their support is conditional on a growth programme to balance the budgetary discipline element of the treaty, as well as the introduction of a financial transactions tax.

Steffen Seibert, the Chancellor’s spokesman, indicated that she was ready to hold talks with the opposition on the issue. However, the demands have prompted a furious response from Merkel’s junior coalition partner, the FDP, with Süddeutsche reporting that the party’s General-secretary Patrick Döring described the prospect of tying the ratification of the treaty to the introduction of an FTT as “inconceivable” and “irresponsible”.
FT WSJ Süddeutsche Welt Handelsblatt Spiegel Zeit

The Fresh Start Project, the group of MPs calling for a new approach to UK relations with the EU, will launch its first Green Paper chapter on EU social and employment law today.  Co-leader of the group, Andrea Leadsom MP will appear on BBC 2’s Daily Politics show at lunchtime.
Fresh Start Project

Take-up of Greek restructuring plan still set to fall short despite increased participation;
Dutch PVV party calls for referendum on the euro
Despite a large group of private creditors publicly agreeing to take part in the Greek voluntary restructuring yesterday, the FT reports that the plan will probably still fall short of its target 90% participation rate. The WSJ reports that this group of firms holds around €40bn in Greek bonds, a small percentage of the target amount. According to sources close to the plan, the participation rate is likely to be 75% - 80% meaning that collective action clauses (CACs) will most likely be triggered to force the remaining holdouts into the plan. German investor group DSW yesterday advised those holding Greek bonds, particularly ones due to mature in the near future, to reject the Greek restructuring proposal.

A report published by Lombard Street Research and commissioned by the Dutch PVV party, calls for the Netherlands to leave the euro. The study claims that it will cost the stronger creditors countries between €1.3 trn and €2.4 trn over the next 4 years to keep the eurozone intact. The report suggests that it would be cheaper for the Netherlands to leave the euro now, saving it €120bn over three years, and calls for a referendum on the issue. Although it is not part of the governing coalition, the PVV does have influence on Dutch policy because the government relies on the party’s support to pass much of its non-EU legislation.

EUobserver reports that Timo Soini, head of the Finns party, has threatened to take legal action against the Finnish government for keeping the details of the Greco-Finnish collateral deal secret. The Finnish Finance Ministry has defended its position stating that the other party in the negotiations – Greek banks – insisted that the details be kept secret.

Bild reports that, as a result of having to put up additional security provisions to safeguard against growing risks in the eurozone, the Bundesbank has reported its lowest level of profits for seven years; below one billion euros, potentially leading to a shortfall in the federal budget of €1.5bn.
FT CityAM WSJ Irish Times Focus FAZ FTD FT 2 Kathimerini Expansión Les Echos Kathimerini 2 FT 3 Telegraph EUobserver De Telegraaf Les Echos 2 La Tribune Guardian Independent EUobserver 2 YLE Bild Spiegel

You can now watch the full video of Open Europe’s recent event, "Europe and the City: What will the euro crisis mean for the UK’s financial services industry?", on our website by clicking the link below.
Open Europe events

European Commission says Spain may face sanctions over excessive deficit
El Mundo reports that a spokesman for EU Economic and Monetary Affairs Commissioner Olli Rehn said yesterday that Spain’s deviation from its deficit target for 2012 is “serious”, suggesting that the European Commission may propose sanctions against the Spanish government.

Open Europe’s Raoul Ruparel is quoted by the Telegraph saying that the decision to announce a deficit well above the target agreed with the European Commission “puts the Spanish government on a collision course with other eurozone leaders…This clash hints at the challenges which lie ahead for the eurozone and how tough it may be to balance domestic political will with the drive for austerity in the eurozone.”
El País ABC Le Monde Cinco Días Cinco Días 2 El Mundo El Mundo 2 Expansión Il Sole 24 Ore Telegraph FT: Barber

Le Figaro reports that the interest rate on Ireland’s ten-year bonds has increased since Taoiseach Enda Kenny announced a referendum on the ratification of the new European ‘fiscal treaty’ on budgetary discipline.
Le Figaro FT: Sutherland

The European Commission will decide tomorrow on the next steps in its infringement procedures initiated against Hungary in January following concerns over the independence of its central bank, judiciary and data protection agency.
Bloomberg Süddeutsche

Le Monde reports on a French Presidential opinion poll which puts socialist candidate François Hollande on 29.5%, Nicholas Sarkozy on 25%, Marine Le Pen on 17.5% and François Bayrou on 12.5%. The first round of the election will be held on 22 April with two candidates going forward to a second round.
Le Monde IPSOS Der Standard

The BBC reports that the Deputy Chairman of the Conservative Party’s International Office, Mark Pritchard MP, has resigned from his party position due in part to political differences over Europe.

EUobvserver reports that the EU has said states should not enter into bilateral tax deals with Switzerland due to a conflict with EU savings law. Germany and the UK have reportedly agreed that their existing agreements will need to be renegotiated.

City AM reports that Mayor of London, Boris Johnson, has written to insurance company Prudential promising to lobby the EU on “Solvency II” in a bid to dissuade the company from moving their headquarters from London to Hong Kong.

We use cookies on the Open Europe website. To learn more about cookies and how we use them please read our privacy policy. Please indicate your preference below. You can change your mind by visiting the privacy policy at any time.

I don't mind cookies being used I don't want any cookies stored on my computer