Daily Press Summary
Markets plummet as worries over Spain intensify; Spanish regions threaten to take central government to court over budget
European markets yesterday posted their largest falls this year, after a poor Spanish bond auction and weak economic data which showed output had fallen in France, Spain and Italy last month. Although Spain managed to sell €2.6bn in bonds, this was well below its target of €3.5bn, causing Spanish borrowing costs to spike.
A growing number of Spanish regions are voicing opposition to the government’s draft budget for 2012. El País reports that Andalusia and Catalonia – Spain’s most populous regions – are now considering taking the draft budget to court, while the Basque Country and Navarra rejected the idea of a ‘tax amnesty’ to allow tax evaders to repatriate capital held on foreign accounts and pay reduced tax on it. Open Europe’s briefing, which warned that Spain could be forced to seek a eurozone bailout to cope with the restructuring of its banking sector, is quoted by Spanish dailies El País and El Economista, and by The Parliament magazine.
Italian Prime Minister Mario Monti unveiled his plans to reform Italy’s labour market yesterday, after he came under pressure to water down the proposals from the leader of centre-left Democratic Party, Pier Luigi Bersani.
In his monthly press conference yesterday ECB President Mario Draghi insisted that talk of an ECB exit strategy from its extraordinary lending operations was “premature”, especially given the record unemployment seen in the eurozone. Draghi renewed his calls for national governments to speed up structural reforms to boost competitiveness and reduce divergences within the eurozone. Both Wirtschaftswoche and Handelsblatt have leaders which criticise the ECB’s loose monetary policy and warn against the prospect of high inflation in Germany.
FT CityAM WSJ Independent Mail Irish Independent Le Monde Les Echos La Tribune FT 2 CityAM 2 WSJ 2 Le Monde 2 Irish Independent 2 European Voice Irish Times 2 Le Monde 3 La Tribune 2 Cinco Días EUobserver 2 El Mundo Le Figaro IHT El País 2 Les Echos 2 El País 3 El Economista La Tribune 3 Telegraph La Tribune 4 Irish Times 3 Le Monde 4 Repubblica The Parliament CityAM 3 FT 3 Le Monde 5 FT 4 La Tribune 5 Handelsblatt Wirtschaftswoche leader Handelsblatt leader FT 5
In an op-ed in the WSJ, Antonis Samaras, the leader of Greece’s centre-right New Democracy party, argues, “Greeks should adjust—no question about it. But what country can lose so much in such a short time? And what democracy can sustain so great a shock with such poor results? It took 30 years of frivolous public spending to bring the country to a debt-to-GDP ratio of 120%. Two years of severe austerity brought debt to 168% of GDP. Obviously the medicine didn't work.” He adds, “We need to allow for a recovery to jump-start the Greek economy. We made a commitment to fulfill the objectives and the targets of the European Union program for Greece, and we want to honour our obligations to the letter. But the longer we are stuck in such a self-perpetuating recession, the more we will drift away from our targets.”
The Economist’s Charlemagne argues, “The worst outcome of a euro split would be a chaotic breakdown. An orderly process increases the chance that it might be possible to salvage from the wreckage other gains of European integration, notably the single market. So eurozone governments need to think the unthinkable. No self-respecting general would refuse to plan for a predictable war, no matter how much he dislikes the idea of fighting it.”
Increasing unrest is reported in Athens, following the death of a 77-year-old man who shot himself in a square near the Greek parliament yesterday, in protest at the country’s debt crisis and severe cuts to his pension. Hundreds of demonstrators gathered yesterday evening at the square to pay tribute.
WSJ: Samaras Economist: Charlemagne BBC Irish Independent EurActiv Guardian Telegraph Süddeutsche Welt FAZ Les Echos
In a report released yesterday, the European Banking Authority said that if the new Basel III capital requirements came into force today, 27 of Europe’s biggest banks would be short of €242bn of capital and European banks would collectively be short €1.2 trillion in liquid assets, according to the FT. EU finance ministers will hold an emergency meeting on 2 May to discuss the EU legislation which will implement the Basel III rules.
FT Le Monde CityAM
French Foreign Minister calls for hardline on Europe
In an interview with the FT, French Foreign Minister Alain Juppé claimed that France would adopt a more assertive stance with the EU if Nicolas Sarkozy were re-elected at the upcoming Presidential elections. “It’s not a bad method from time to time to bang the table” he said in reference to Sarkozy’s threat to suspend French participation in the free movement Schengen area, adding “it is a very good vision of what Europe should become- a Europe with borders”. He also reiterated Sarkozy’s call for a Buy European Act, stating that “we have a divergence with our British friends who see Europe as a big free trade area. That is not our vision. We must introduce into free trade the notion of reciprocity”. He also attacked Socialist candidate Francois Hollande’s pledge to renegotiate the fiscal compact, “to suggest you can have another round of negotiations on the European mechanism runs the risk of reversing back a year to the turbulence which destabilized Italy and Spain”.
Nicolas Sarkozy will present his election manifesto today. According to the latest CSA poll, Sarkozy leads the first round vote with a stable 30%, followed closely by Hollande on 29%, up 3 points since the last survey.
FT FT 2 Le Monde EurActiv
EU state aid rules threaten small firms’ access to venture capital
The FT reports that EU rules on state aid have jeopardised small UK companies’ access to venture capital funding, threatening one of the cornerstones of the Government’s policy to stimulate UK enterprise. In an effort to comply with EU rules, under the UK’s new Finance Bill, investors will lose tax advantages if the companies they are funding receive more than £2m from Venture Capital Trusts and other forms of “state aided, risk capital investment”. A Treasury spokesperson said, “Any company receiving aid through VCT schemes, or any other Government State aid scheme, on or after 6 April 2012 ... in excess of £2m, will need to consider the risk of the European Commission deeming the aid to be illegal.”
The European Commission has asked the European Parliament to wait for the ECJ’s ruling on the Anti-Counterfeiting Trade Agreement’s (ACTA) conformity with the EU Treaties before voting on the agreement. The Socialist and Green groups in the Parliament have vowed to “bury” ACTA by the summer, before the Court would have a chance to issue a verdict.
EurActiv EUobserver EC Press Release De Morgen
Open Europe’s briefing looking at the cumulative size of the acquis communautaire is cited by Professor Waldemar Hummer from the University of Innsbruck, in a comment piece on Austrian news website EU-Infothek.
EU-Infothek Open Europe Research
A report by the OECD states that aid to developing countries decreased last year due to the financial crisis, with EU aid dropping by about €500 million, representing only 0.42% of Gross National Income compared with 0.44% in 2010.
BBC European Voice EurActiv
The Telegraph reports that the Coalition’s proposed new surveillance powers could breach EU data laws, including the Data Protection Directive, the e-privacy Directive and the Data Retention Directive.
Slovakia’s new government was formally inaugurated yesterday, following last month’s elections comfortably won by the social-democratic Smer party. New Prime Minister Robert Fico pledged a “pro-European” administration, and chose to appoint four non-political ‘experts’ to his Cabinet, including Miroslav Lajcak, formerly a managing director at the EU’s External Action Service, as Minister for Foreign Affairs.
Bloomberg Reuters Slovak Spectator
FAZ reports that the number of foreigners living in Germany reached a 15-year record high last year, mainly due to immigration from other EU member states, in particular from Central and Eastern Europe and the Southern countries most heavily affected by the eurozone crisis.