Daily Press Summary
Wilders may withdraw support for Dutch minority government; Talks temporarily suspended over budget and calls for euro referendum
Elsevier reports that today is a crucial day in the Netherlands as Geert Wilders' PVV party may call an end to its support for the Dutch minority government. Last night, negotiations on extra austerity measures broke down. Wilders is opposed to cuts in social security spending, but has also demanded that the government organises a referendum on the euro, which the two governing parties, the VVD and CDA, have refused to discuss.
ECB’s long term financing fails to boost bank lending to the real economy;
Weidmann warns against increasing the eurozone bailout funds
Data released by the ECB yesterday showed that, despite injecting €1 trillion in long term liquidity to the Eurozone banks, loans to non-financial firms fell by €3bn during February. Corporate lending grew by just 0.4%, lower than growth posted in the previous two months. Both Italian and Spanish banks continued using their extra liquidity to purchase sovereign debt, buying €23bn and €15.7bn respectively. Open Europe’s Raoul Ruparel is quoted in the Telegraph and the Telegraph’s live blog saying, "The LTRO has succeeded in avoiding a severe funding crunch...[But] it does not tackle the underlying lending risks which the banks are still keen to avoid, particularly with the looming recession in Europe."
Bloomberg reports that, according to leaked draft conclusions for tomorrow’s meeting of eurozone finance ministers, the eurozone will look to combine the ESM and the EFSF, the permanent and temporary bailout funds respectively, to give a €700bn lending capacity, although €200bn of this has already been assigned. The remaining unused €240bn of the EFSF could be accessed under exceptional circumstances up to mid-2013.
Speaking in London yesterday, Bundesbank President Jens Weidmann warned that increasing the eurozone’s bailout funds will not solve the crisis, arguing, “Just like the ‘Tower of Babel’, the ‘Wall of Money’ will never reach heaven. If we continue to make it higher and higher, we will, in fact, run into more worldly constraints…All the money we put on the table will not buy us a lasting solution to the crisis.”
The Commission has joined the Spanish government in insisting that the Spanish banking sector plans for recapitalisation and creating extra provisions against losses are adequate, adding that there was no pressure on Spain to accept external aid or assistance. A general strike is taking place in Spain today against the government’s labour market reforms.
FAZ reports that figures within the SPD leadership have publicly disagreed over what the party should be aiming for in the negotiations with the German government over the ratification of the fiscal treaty. The Bundestag will debate the fiscal treaty and the permanent bailout fund today.
Greek officials revealed yesterday that attempts to crack down on tax avoiders who owe the Greek state over €694m, have only resulted in a €9m increase in tax receipts, meaning just 1.2% of the targeted sum has been recovered. FT Deutschland notes that Polish Central Bank President Marek Belka has said that Greece should think about introducing a dual currency system to be used by the public sector in order to regain competitiveness.
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According to estimates from the Belgian Federal Planning Bureau, the Belgian government needs to find another €5 billion for its 2013 budget in order to meet EU budget deficit targets.
Bild reports that in the latest poll ahead of May’s regional elections in Nordrhein-Westfalen, Germany’s most populous state, the opposition SPD party leads on 40% followed by Angela Merkel’s CDU party on 32% and the Greens on 12%. The Pirate party on 5% would also win seats in the regional parliament while the FDP, Merkel’s national coalition partner, on 4% would not.
The gap between Nicolas Sarkozy and socialist candidate Francois Hollande has widened, as the Presidential incumbent leads in the first round by 4% on 30%, ahead of Hollande on 26%. The CSA poll results confirm two previous survey findings. Hollande’s lead in the second round has shrunk from 9% to 6%.
Les Echos Le Monde Le Point
On his blog, Europe Minister David Lidington looks at the ECJ’s recent report on how well member states have implemented EU law, which shows that Britain has a better record than many other member states in complying with EU law.
FCO blogs Open Europe blog
Martin Schulz MEP, President of the European Parliament, has proposed using ‘the citizens' initiative’ to pressure EU states into accepting a financial transactions tax. Under this initiative the European Commission must consider legislating if a million signatures from seven member states are collected.
The cross-party People’s Pledge pressure group are holding a trial referendum in the parliamentary constituency of Thurrock next week about whether to hold a referendum on the UK’s membership of the EU. The group plans to hold a further ten such referenda this year and 100 in 2013.
To avoid being expelled from the EU border-free Schengen area, Greece is accelerating the construction of prison-style asylum centres, Euractiv reports. Greek authorities have defended the plans, citing similar facilities in France and Spain.
Die Presse reports that according to the recent "Eyes on Europe" study, 2 out of 5 Austrian citizens declared that they did not support the EU, a higher proportion than the European average.