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Germany rejects Sarkozy’s demands for ECB intervention to promote growth; IMF members call on Europe to increase bailout funds further

17 Apr 2012

The German government yesterday rebuked French President Nicolas Sarkozy’s comments on the need to change the role of the ECB. German government spokesman Steffen Seibert said, “It is the core belief of the federal government...that the role and office of the ECB be independent of encouragement and assistance from politics. And that’s well known in Paris.” Le Monde quotes Sarkozy saying, “I am in favour of independence [for the ECB]…but it’s madness to claim that because the central bank is independent, we have no right to discuss [its role].” He pledged to “open the debate” on the ECB and its role on growth if elected.

In an interview with FT Deutschland, Jean-Francois Copé, leader of the parliamentary group of Sarkozy’s UMP party, warned that France would be “as demanding” as its European partners – seen as a reference to Germany’s demands for stringent austerity in France and around Europe.

Meanwhile, Japan yesterday confirmed that it will offer $60bn in additional funds to the IMF, although Japanese Finance Minister Jun Azumi warned that Europe has not “made enough efforts” and urged them to “beef up their firewall further”. Der Spiegel reports that according to Paulo Nogueira Batista, the Latin American representative at the IMF, a decision on increasing IMF funds will likely not be made until June. Batista also warned that the increase in funds is “less than certain” and complained that “eurozone countries abuse their power in the IMF.”

The FT reports that, over the past two years, international investors have sold off around €100bn in French, Italian and Spanish government debt as fears over the eurozone crisis increased. Another article in the paper notes that, according to a poll by Central Banking Publications, one third of central bank reserve managers agreed that the eurozone crisis has put the status of the euro as a reserve currency in doubt.

City AM reports that eurozone exports surged in February, although the growth was mainly driven by German and French exports of cars and machinery. Separately, the EU/IMF/ECB troika arrived in Ireland yesterday to begin its sixth assessment of the Irish bailout.
EUobserver CityAM CityAM 2 Irish Times Le Monde Les Echos Les Echos 2 Bloomberg IHT Le Figaro El País Kathimerini WSJ FT FT 2 FT 3 Telegraph Irish Times Bloomberg 2 Welt FAZ Spiegel FTD Welt: Lehnartz Telegraph: Warner FT: Zoellick WSJ Review & Outlook WSJ: Bakoyannis Le Monde Les Echos Les Echos 2 Les Echos 3

Christopher Howarth: “We need a substantial, thought out and well-articulated vision of the UK’s place in the EU”
Writing on Conservative Home, Open Europe’s Christopher Howarth argues that David Cameron needs to set out a vision for the UK in the EU based on “the realisation that the UK (along with other states) needs a more flexible relationship, but that the UK cannot stop states such as France and Germany if they wish to integrate further.”  He also notes that “the lack of a coherent UK vision is beginning to worry not only supporters of reform in Britain, but potential allies on the continent.”
Conservative Home: Howarth Open Europe blog

Spanish government threatens to seize budgetary control of high-deficit regions as market pressure intensifies
The Spanish government is threatening to seize control of the finances of Spanish regions which look set to miss their deficit targets. An official quoted by the FT said, “We are inclined to do it the same day we get data showing that an autonomous region won’t fulfil its obligations.” The interest rate on Spain’s ten-year bonds rose above 6% yesterday. An auction of Spanish short-term debt this morning saw strong demand, but borrowing costs rose. Spain faces a long-term debt auction on Thursday.

Meanwhile, in an interview with FAZ, IMF chief Christine Lagarde said, “What concerns me the most is that the Spanish and European banking supervisors are able to ensure that Spanish banks are adequately capitalised, have enough of a buffer, and value their assets appropriately.” El Mundo reports that, according to Deutsche Bank, the Spanish government will have to inject an additional €50bn into the country’s financial sector.
FAZ: Lagarde Independent El Mundo Irish Independent FT 2 CityAM Irish Times Times Guardian EUobserver 2 Expansión FT WSJ Cinco Días El Mundo Welt

Leaked document shows UK proposals for ECHR overhaul have been watered down
The Times reports that a leaked draft agreement on the workings of the European Court of Human Rights to be signed later this week shows that the UK’s reform proposals have been watered down. The article notes that UK plans to encourage the Court to reject cases that have already been through national courts have been scrapped, although the agreement still envisages increased discretion for states on interpreting human rights laws. In an op-ed in the paper, Jacob Mchangama, Director of legal affairs at the Danish think-tank Cepos, also warns that the human rights lobby is “watering down crucial reforms” to the ECHR.
Times Times: Mchangama Telegraph Express

A new YouGov poll for the Sun shows that UKIP has overtaken the Lib Dems as the third most popular political party in the UK. The poll credits UKIP with 9% of voting intentions, followed by the Lib Dems at 8%.

Sun

The European Commission has declared it will not put forward proposals for a publicly funded credit rating agency, as this would create new conflicts of interests and would not be considered credible by financial markets.
ORF FT Deutschland: Leader

Youth unemployment in Europe has increased by 50% since the financial crisis of 2008, according to the European Commission.
Guardian

The European Commission is likely to prepare a legal proposal on reforming its Emissions Trading Scheme (ETS) before the end of the year, EU Energy Commissioner Günther Oettinger said yesterday.
Reuters

Die Welt reports that, on Thursday, MEPs will vote on whether to tax fuels according to energy content, a move which could see the tax burden on the price of a litre of diesel in Germany increasing from 47 cents to 79 cents.
Welt

According to an EU source quoted by Le Monde, twelve member states have yet to implement an EU-wide ban on battery cages for egg-laying hens, which came into effect at the beginning of this year.
Le Monde ORF

Handelsblatt reports that the head of Germany’s Federal Environmental Agency has asked Chancellor Angela Merkel to personally lobby the Polish government to drop its solitary opposition to increasing the EU’s carbon emissions reduction target from 20% to 25% compared with 1990 levels.

Handelsblatt

A European Commission team is to visit Argentina later this week to discuss the country’s decision to re-nationalise YPF – its biggest oil company – and oust Spanish group Repsol as majority shareholder, reports EurActiv.
El País FT EurActiv BBC

On the website of Dutch radio BNR, Dutch socialist MEP Dennis de Jong writes, “MEPs are struggling to take a critical look at their own compensation [which] despite the agreed freeze, is too large, because one receives several payments for the same kind of expenses, and moreover, because there is no need to account for the monthly office allowance.”
BNR: de Jong

EurActiv reports that János Áder, an MEP from Hungary's ruling party, has been nominated as the only candidate for the Presidency of Hungary. A vote in the Hungarian parliament is expected on 2 May.
EurActiv European Voice

 

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