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Netherlands, Belgium and Austria criticise decision to revise Spanish deficit targets; Greece needs further budget cuts to meet targets set out under second bailout

14 Mar 2012

EUobserver reports that the decision to revise Spain’s deficit target for this year has been criticised by Belgian Finance Minister Steven Vanackere and his Austrian counterpart Maria Fekter after EU finance ministers also announced yesterday to freeze €495 million in development funds due to Hungary next year over the country’s failure to meet EU budget rules. The sanctions could still be lifted if the country manages to cut a further 0.5% from its budget by June.

Following the revision of Spain’s deficit targets, Dutch Labour MPs have threatened to block the ratification of the new European ‘fiscal treaty’ on budgetary discipline if that means that the Netherlands will need to bring its deficit down to 3% of GDP by 2013, as the Dutch government is planning to do. However, Dutch daily De Telegraaf notes that leading members of the party remain split on the issue.

Meanwhile, according to a leaked report compiled by the EU/IMF/ECB troika, Greece will have to find budget cuts worth a further 5.5% of GDP in 2013 and 2014 to meet the targets laid out under the second bailout agreement, while warning that "The recovery previously announced for next year will be further delayed with, at best, a stagnation of activity in 2013." Kathimerini reports that general elections in Greece are likely to be held on 6 or 13 May this year. The German cabinet today approved the draft law for the implementation of the eurozone’s permanent bailout fund, the ESM, with a supplementary budget enabling the fund’s financing due to be adopted next week.
Kathimerini CityAM WSJ Kathimerini 2 Telegraph FT CityAM 2 Il Sole 24 Ore La Stampa EUobserver FT 2 FTD Handelsblatt Irish Times Irish Times 2 Monde Monde 2 Monde 3 De Telegraaf FTD 2 EUobserver 2 EUobserver 3 El País El País 2 El Mundo ABC Expansión Expansión 2 Les Echos ABC Il Sole 24 Ore blogs: Romano FT 3 WSJ 2 Telegraph 2 Welt City AM: Shakespeare FT: Plender FT Editorial Il Sole 24 Ore Corriere della Sera BBC FT WSJ EUobserver IHT European Voice Irish Times Monde El Mundo

Draghi: Unless we proceed with reforms it will be difficult to keep the euro together
Sarkozy: At one point I believed the eurozone would break up

Speaking at a conference in Paris, ECB President Mario Draghi warned that imbalances could break-up the eurozone, saying, “Unless we proceed with our structural reforms all together, it will be difficult to keep the area together.”

Meanwhile, Nicolas Sarkozy said yesterday that “Europe would not be financially, economically, socially and politically equipped to deal with another crisis of this importance”. He confessed that he believed at one point that the euro would implode, adding “I wasn’t the only one, this conviction was shared with Mme Merkel, we were close to a catastrophe”. He also claimed that “it could be said that the Merkozy couple, criticised for so long, played a role in solving the Greek crisis”. Separately in an interview on Europe 1 this morning, Sarkozy revealed that Angela Merkel would visit France “at one moment or another, without a doubt” in order “to talk about Europe.”
Monde Les Echos

EU Financial Transaction Tax put on hold; Focus shifts from to stamp duty
ARD reports that the plan for an EU-wide Financial Transaction Tax has been shelved due to significant opposition from the UK, Sweden, Netherlands and Luxembourg. The FT reports that one alternative being widely discussed is an EU wide stamp duty following the UK model, although including derivatives. At the meeting UK Financial Services Secretary Mark Hoban said the UK is “happy for member states to follow the stamp duty model if they chose to do so,” but stopped short of endorsing a coordinated EU wide tax.
FT EUobserver EurActiv FTD Hamburger Abendblatt ARD Süddeutsche Welt

Government gearing up to share UK DNA database with EU police forces in 2015
The Telegraph reports that the Government is planning to go ahead with EU data-sharing rules on DNA records and begin sharing details in 2015. Research conducted in the Netherlands has revealed up to two thirds of checks under the system could be so-called “false positives”, where an innocent person is wrongly identified as a match. However, the legislation is covered by the UK’s ‘block opt-out’ of EU police and crime law, which allows it to pull out of 130 of these laws in 2014. In February, 102 Conservative MPs backed Open Europe’s report which called on the UK to use its opt-out.
Telegraph Open Europe research

Sir Nicolas Bratza, the British President of the European Court of Human Rights, has told Parliament’s Joint Committee of Human Rights that the Government’s proposals to reform the Court would be “extremely difficult” to carry out while others would be “fraught with difficulty” and risk “friction and divisiveness”.
Telegraph Mail Conservative Home: Goodman BBC

The Times quotes Tidjane Thiam, Chief Executive of Prudential, saying that, if the EU’s Solvency II regulation of insurance firms goes through in its present form, the company will be forced to shut its American business if it remains headquartered in Britain.
FT City AM City AM: Crow Times Guardian Mail

Unpublished auditors’ report: EU agencies mismanage their budgets
Dutch socialist MEP Dennis De Jong has revealed unpublished reports from the European Court of Auditors, which show that the EU’s different agencies are ‘mismanaging’ their budgets. The reports, which looked at 22 of the 42 EU agencies, noted that the budgets of the agencies amount to €1.45 billion per year. According to De Jong, despite “excessive” spending habits, much of this money is not spent.
De Jong Press Release Open Europe research

EUobserver reports that German Foreign Minister Guido Westerwelle has criticised French President Nicolas Sarkozy’s threat to temporarily pull France out of the EU’s border-free Schengen area, arguing, “It is not protecting borders within the EU that will make Europe safer, but rather the protection of Europe's external frontiers.”

EUobserver reports that Finland has decided to halt the ratification of the controversial Anti-Counterfeiting Trade Agreement (ACTA) in light of the European Commission’s recent decision to refer the agreement to the ECJ to rule on its legal implications.

Bild reports that the German “Free voters” movement, which opposes eurozone bailouts, has announced it will stand in the 2014 European Parliament elections.

The European Parliament yesterday voted to back the Commission’s legislative proposals for introducing mandatory quotas for women in boardrooms if member states are deemed to have made insufficient progress; the Commission has set a target of 30% female members by 2015 and 40% by 2020.
BBC EurActiv

Die Welt reports that German car manufactures are alarmed by the European Parliament’s call for carbon emissions from new cars not to exceed 95g/km in 2020 and 70g/km by 2050, arguing that “determining long-term emissions targets without a thorough cost-benefit analysis is arbitrary and risks squandering the competitiveness of Europe’s automotive industry”.

The European Commission has confirmed that it will work on finalising the text of a new association agreement with Ukraine from the 30 March.

Europe’s biggest telecoms companies may face a European Commission investigation focusing on whether meetings between their top executives led to possible collusion, reports the FT.

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