Daily Press Summary
Eurozone delays decision on size of bailout fund until end of March; Challenge against ESM submitted to Estonian Constitutional Court
Eurozone finance ministers gave the final approval for the second Greek bailout last night, although they delayed making a decision on increasing the size of the eurozone bailout funds until their next meeting on 30 March. EU Economic and Monetary Affairs Commissioner Olli Rehn has been tasked with presenting proposals for how the funds could be increased at that meeting. In his press conference following the meeting, Eurogroup Chairman Jean-Claude Juncker said that he expected Greek debt to reach 117% by 2020 thanks to the high participation in the restructuring. The IMF confirmed yesterday that it plans to contribute €28bn to the second Greek bailout, although the remaining €10bn due under the first bailout will be cancelled. Kathimerini reports that, according to EFSF Head Klaus Regling, €48bn of the second Greek bailout will go towards recapitalising Greek banks.
A new analysis by the EU/IMF/ECB troika seen by Reuters notes that Greece’s public debt could become sustainable only after 2030, when it is expected to reach below 90% of GDP. Speaking at the annual British Venture Capital and Private Equity Association’s Chairman’s dinner, Chairman of the UK Treasury Select Committee Andrew Tyrie called for Greece to exit the eurozone. Open Europe’s recent briefing which argued that the second Greek bailout is not sufficient to save Greece is quoted by Wall Street Italia.
Meanwhile, the new Greek bonds, created following the debt restructuring, began trading at a significant discount yesterday – suggesting that investors are still pricing in a Greek default. Separately, the FT reports that a German law firm representing up to 200 investors has filed a class action lawsuit against banks and the Greek state, alleging that they did not fully warn investors of the risks involved with Greek bonds and that the restructuring infringed on the terms of a German-Greek treaty designed to protect German investors against political risk.
EUobserver reports that Estonian Ombudsman Indrek Teder has asked the country’s Constitutional Court to judge whether the ESM, the eurozone’s permanent bailout fund, violates the Estonian constitution since the use of majority votes threatens the parliament’s control over public finances.
Kathimerini CityAM BBC EurActiv Guardian Guardian 2 EUobserver 3 Kathimerini FT CityAM 2 WSJ FT 2 CityAM 3 FT 3 Telegraph Telegraph Times Irish Times Kathimerini FTD Irish Times WSJ 2 Bloomberg Volkskrant Handelsblatt Wirtschaftswoche Bloomberg EUobserver 2 MSN News Les Echos Les Echos 2 Wall Street Italia Welt Spiegel DMN Corriere della Sera FT: Merk FT: El-Erian FT: De Grauwe Welt
New poll: 60% of UK voters want looser relationship with EU
In City AM, Allister Heath cites a new cross-country YouGov-Cambridge poll on public attitudes to the EU. The poll finds that 60% of respondents in the UK want a referendum to decide on Britain’s relationship with the EU; 60% want a looser relationship or to leave altogether; only 14% want more integration with Europe, while a further 13% want to keep things as they are. The poll also found that 63% of Italians, nearly 40% of French and over a third of Germans support turning the EU into a ‘United States of Europe’.
Meanwhile, according to a separate opinion poll published today, 48% of French voters believe that aid to Greece is “useless or dangerous”, and 59% consider that the euro has a negative influence on their lives, Le Figaro reports. The poll also reveals that 64% of respondents believe that the EU should have a directly elected President.
City AM: Heath YouGov-Cambridge poll YouGov-Cambridge poll 2 Le Figaro
Public stand-off between Bundesbank and ECB continues
Writing in FAZ, Bundesbank President Jens Weidmann hints at the need for an exit strategy from the ECB’s non-standard monetary policy measures, such as long term lending, saying, “It is not the role of monetary policy to keep banks on life support or to protect the solvency of states. Decisions on redistribution of major solvency risks for banks and states should only be taken by elected governments and parliaments.” Weidmann did backtrack on his reported criticism of the so-called Target 2 imbalances, stating that they “do not represent an independent risk because I consider a breakup of the monetary union as simply absurd.” Lastly he warned that monetary policy must not “provide an excuse to delay the necessary reforms in the financial and economic policy.”
In an interview with Die Welt, the Deputy Head of the Bundesbank, Sabine Lautenschläger, says that she is worried that the ECB’s long term lending operations are sustaining so-called ‘zombie-banks’.
FAZ Welt Spiegel
Spain obtains revision of deficit targets, but is told to cut an extra €5bn this year
At yesterday’s meeting of eurozone finance ministers, Spain obtained a revision of its deficit target for 2012 from the previously agreed 4.4% of GDP to 5.3%. El País notes that the new target is lower than the 5.8% announced by Spanish Prime Minister Mariano Rajoy after the latest meeting of EU leaders, meaning that Spain will have to find an extra €5bn of savings by the end of the year. Spain will still have to bring its public deficit below 3% of GDP by the end of next year. FT Deutschland reports that a “violent discussion” of more than an hour took place between Spanish Economy Minister Luis de Guindos and Eurogroup Chairman Jean-Claude Juncker during yesterday’s meeting.
El Mundo reports that, following a petition by a Spanish lawyer to the European Ombudsman, the ECB has officially confirmed that it sent a letter to the Spanish government last August. The letter urged the Spanish government to rapidly adopt measures to boost growth and “improve the functioning of [the Spanish] labour market” to reduce Spain’s high unemployment rate, but stopped short of demanding the introduction of a constitutional deficit and debt brake.
EUobserver IHT Il Sole 24 Ore El País FT 4 CityAM 4 WSJ 3 Bloomberg AFP Welt Süddeutsche La Tribune El País 2 El Mundo Cinco Días Cinco Días 2 Expansión Expansión 2 FTD El Mundo
New poll puts Sarkozy ahead of Hollande in first round of presidential election
A new IFOP poll published by Paris Match today places Nicolas Sarkozy ahead of Socialist candidate François Hollande for the first time during the presidential campaign. Sarkozy leads on 28.5% of votes in the first round, followed by Hollande on 27.5%. However, Hollande continues to lead in the second round polls by 54.5% to Sarkozy’s 45.5%.
The poll was conducted over the weekend, during which Sarkozy threatened to suspend France’s participation in the EU’s border-free Schengen area. Open Europe’s Director Mats Persson is quoted by Reuters arguing that “it’s very unlikely that [Sarkozy] would go ahead and suspend Schengen membership because that would mean major disruption.”
Meanwhile, Hans-Olaf Henkel, the former head of German employer's organisation BDI, argues in Handelsblatt that “Hollande paves the road for the Northern euro”, adding that “whoever wins in Paris, the [constitutional] debt brake won’t be implemented. Then it becomes time for Germany and others to leave the eurozone.” Separately, French far-right leader Marine Le Pen has secured the 500 mayoral nominations required to run in the presidential elections, reports Le Monde.
Le Parisien Le Monde blogs: Leparmentier FT Paris Match Libération Le Figaro FT Le Monde WSJ Review & Outlook Libération Les Echos Reuters Handelsblatt: Henkel
On Conservative Home, JP Floru calls for the end to the UK’s “gold-plating” of EU legislation citing Open Europe’s research on the size of the acquis communautaire and the burden of EU regulation. He argues, “If we retroactively reduced gold-plating, the impact and resulting growth would be much greater than what is currently planned.”
Open Europe research Open Europe research 2 Conservative Home: Floru
EU finance ministers to try to push ahead with FTT
At today’s meeting of EU finance ministers, France, Germany and seven other member states will argue in favour of introducing a financial transaction tax, although given British and Swedish opposition, there is no realistic prospect of securing an agreement at the EU-27 level. Equally several eurozone governments are opposed to the idea of a eurozone-only FTT. One alternative could be to try to make progress via the process of so-called “enhanced cooperation” which was designed to allow at least one third of the EU's member states to push ahead with new laws by themselves. Handelsblatt quotes Austrian Finance Minister Maria Fekter saying that she anticipates receiving the first revenue from the new tax in 2015.
Separately, FAZ reports that some senior politicians in the CDU including Volker Kauder, the chairman of the CDU’s parliamentary group, are lobbying for the introduction of a tax modeled on the UK’s stamp duty as an alternative to the FTT, which the German opposition have demanded in return for ratifying the ‘fiscal treaty’.
EurActiv Spiegel Handelsblatt Telegraph
In an op-ed in Die Welt, Klaus Zimmermann, head of Germany’s Institute for the Study of Labour argues that the debate over halting unemployment benefits for EU migrants is misleading and that “it is a myth that migrants come here to exploit our social welfare state…On the contrary, we need skilled immigrants.”
Open Europe research Welt: Zimmermann
Senior political sources have told the Irish Times that the Irish referendum on the ratification of the new European ‘fiscal treaty’ on budgetary discipline is likely to be held at the end of May.
An article in Le Monde reports that Italian Prime Minister Mario Monti has been approached to replace Jean-Claude Juncker as Eurogroup Chairman. Monti’s office has so far declined to comment, reports Il Sole 24 Ore.
Il Sole 24 Ore
EUobserver reports that the European Commission has unveiled new proposals designed to facilitate the freezing and confiscation of criminal assets across Europe.
Open Europe research EUobserver FAZ Spiegel Bild Les Echos
EU finance ministers are expected to approve the freezing of €495m in EU funds for Hungary today, if the Budapest government fails to bring down its deficit in the coming six months – the first such move under the EU's strengthened budget rules.
Rzeczpospolita reports that Poland’s veto over the EU’s 2050 low-carbon roadmap last week is likely to be circumvented when the Commission puts forward legislative proposals to reduce carbon emissions, since Poland will be unable to form a blocking minority in the EU Council of Ministers.
The Irish Times reports that Dutch Prime Minister Mark Rutte is expected not to attend a debate in the European Parliament today on why his government failed to condemn an anti-immigrant website run by Geert Wilders’ far-right Freedom Party (PVV).
The Telegraph reports that the UK’s Bill of Rights Commission, tasked with coming up with proposals to reform human rights law, is riven by division and unlikely to agree final proposals later this year.
Telegraph Telegraph 2 Telegraph 3