Euro-Zone News and Analysis
Press summary: Germany’s guarantees under the bailout funds could exceed size of the country’s 2012 budget; Germany’s far-left Die Linke challenges fiscal treaty in German Constitutional Court
Süddeutsche notes that the German Government is likely to allow the permanent ESM and temporary EFSF bailout funds to run in parallel, though it remains unclear whether the funds would run at full volume and when the EFSF is expected to be phased out. According to the paper, if the two were to run in parallel, it would raise Germany’s contribution to the bailout funds from to €211bn to €280bn - almost the size of the German government’s 2012 budget.
Meanwhile, Reuters reports that Germany’s far-left Die Linke party will challenge the ‘fiscal treaty’ at the German Constitutional Court on the basis that it is “undemocratic and unconstitutional” since it violates the budgetary sovereignty of the Bundestag. The FTD reports that the Bundesbank has rejected calls by the FDP party chairman and Economy Minister Philipp Rösler for the rising imbalances in the Eurosystem to be tackled, stating that the imbalances will come down when the Eurosystem exits from unlimited liquidity operations.
The Austrian Cabinet yesterday signed off on both the ‘fiscal treaty’ and the ESM treaty, although the government will need to secure a two-thirds majority in the Austrian Parliament to ratify the ESM treaty. This means the government will be dependent on support from the opposition Green party who have demanded that parliament have more of a say in the allocation of any ESM-funds and have called for the introduction of an FTT.
Süddeutsche Welt Reuters Die Presse Reuters 2 Handelsblatt
6 or 13 May likely dates for Greek elections
Reuters reports that Greece received its first €7.5bn tranche of the second bailout yesterday, with €4.66bn. Long discussions between Greek political leaders last night did not yield a final date for the Greek elections, although 6 or 13 May look most likely. Kathimerini reports that Pasok’s Fillippos Sachinidis will be sworn in as the new Greek Finance Minister today.
Meanwhile, Italian Prime Minister Mario Monti said yesterday that his government will go ahead with labour market reforms despite failing to reach an agreement with Italy’s biggest trade union, the CGIL, over plans to reduce the cost of dismissals. El Mundo reports that the Spanish government is planning to increase weekly working hours from 35 to 37.5 for all civil servants.
CityAM Reuters EUobserver Kathimerini Irish Times Guardian Irish Times WSJ Heard on the Street FT: De Franssu Conservative Home: Callanan Handelsblatt FTD FT: Letters Kathimerini 2 Jornal de Negócios Les Echos Monde La Tribune Les Echos 2 Monde Les Echos 3 Les Echos 4 Il Sole 24 Ore Il Sole 24 Ore 2 Corriere della Sera Corriere della Sera 2 Repubblica La Stampa WSJ FT 2 CityAM 2 BBC EurActiv Jornal de Negócios El Mundo Irish Independent Expansión FT Brussels blog IMF Report FT Alphaville
Dutch government loses majority;
Dutch Finance Minister calls on Commission to examine alternatives to FTT
The Dutch government lost its one seat majority in parliament yesterday, after Hero Brinkman resigned from Gert Wilders’ PVV party over the lack of “internal democracy” in the party and its public criticism of immigrants. Brinkman will stand as an independent and has said he will continue to support the government, however, the opposition is calling for fresh elections.
Meanwhile, NRC Handelsblad reports that Dutch Finance Minister Jan Kees de Jager has written a letter to Dutch MPs stating that he will ask the European Commission to investigate alternative options to a Financial Transaction Tax, including a system similar to the UK’s stamp duty or a bank levy.
FT Telegraph EUobserver NRC