Daily Press Summary

Go to Daily Press Summary

El Mundo: Spain could seek EFSF aid to recapitalise its banks if borrowing costs remain at current levels; Reuters: ECB not opposed to Bankia recapitalisation plan

29 May 2012

El Mundo yesterday quoted Spanish government sources saying that Spain could tap the eurozone’s temporary bailout fund, the EFSF, to launch a bank recapitalisation if the country’s borrowing costs remain at current levels for too long. One of the sources said, “This is a possibility…The EU has not decided yet what to do with Greece. We need to wait until the [Greek] elections. Then, we will see.” Yesterday, the spread between Spain and Germany’s ten-year bonds reached its highest level since the introduction of the euro. Speaking to the press, Spanish Prime Minister Mariano Rajoy said, “There will be no bailout for the Spanish banking sector”, and insisted that the EU should make clear that the euro is “irreversible”.

Meanwhile, Reuters España quotes a Spanish government source saying that the ECB “doesn’t have any problems” with the idea of recapitalising Bankia with government bonds – which would then be used as collateral to get ECB funding. The source notes, “The ECB has been closely consulted on the issue. This solution has been already used for Germany and Ireland in the past, and is a perfectly valid one.” Separately, a parliamentary spokesman for Rajoy’s Partido Popular, Rafael Hernando, said in an interview with Spanish public radio RNE that the ECB’s “inaction is provoking this situation of instability” on the bond markets. The ECB did not buy any eurozone government bonds for the eleventh consecutive week, reports Les Echos.
Reuters España Telegraph Telegraph Telegraph: Osborne Telegraph: Evans-Pritchard Les Echos Le Monde WSJ: Review & Outlook FT City AM Expansión WSJ Le Figaro Il Sole 24 Ore El Mundo El País Cinco Días La Moncloa: Press review Independent EUobserver Guardian Times BBC EurActiv Irish Independent El Economista Les Echos Süddeutsche Welt

Anti-bailout political group announces it will contest German national elections
Under the headline "Europe, but different", the front-page of Handelsblatt reports that the Free Voters, an independent political formation, will for the first time contest national parliamentary elections scheduled for next year. The free voters, who have strongly opposed the eurozone bailouts and the resulting liabilities for German taxpayers, intend to campaign strongly on this issue, with the party’s national chairman Hubert Aiwanger telling the paper that “We will raise the rejection of the euro rescue policy as a unique selling point”. Helmut Jung, of the polling company GMS is quoted as saying that "15 to 20% of voters could be responsive to a middle class protest party”.
Handelsblatt Handelsblatt 2 Handelsblatt 3 Handelsblatt 4

Leading German Social Democrat Peer Steinbrück has told Bild that the party is keen to vote on the ESM treaty establishing the eurozone’s permanent bailout fund next month in order to backstop Greece if it left the euro, but rejected voting on it in parallel with the fiscal treaty, as Angela Merkel wants, meaning the date of the vote is still uncertain.
Bild

Greek banks receive €18bn cash injection;
Government officials may use €3bn from first bailout to pay bills
Greece’s four biggest banks received an €18bn cash injection yesterday, which will enable the under-capitalised banks to regain access to ECB funding. The recapitalisation was funded by bonds from the EFSF, the eurozone’s temporary bailout fund. Greek officials told Reuters that Athens may tap into €3bn of unused funds from the country’s first bailout programme if the government fails to raise sufficient resources to cover basic state payments by the end of next month. Former Prime Minister Lucas Papademos warned Greek party leaders yesterday that the Greek government would run out of cash by the end of June, after attempts to raise additional tax revenue fell through.

Meanwhile, Italian Prime Minister Mario Monti has called a meeting with French, Spanish and German leaders after the Greek elections on June 17 at which they will discuss the eurozone crisis, reports Le Figaro.
EurActiv Kathimerini City AM Irish Times Les Echos Les Echos 2 IHT Reuters Handelsblatt

David Cameron and Chancellor George Osborne met with Bank of England Governor Sir Mervyn King and FSA Chairman Lord Adair Turner yesterday to discuss the eurozone crisis. Downing Street said the purpose was “to ensure the UK is properly placed to deal with the eurozone situation and the issues arising from it.”
Telegraph Mail Guardian FT City AM Les Echos Guardian 2

Speaking on the BBC’s Today Programme, Justice Secretary Ken Clarke described the idea of an EU referendum as a “complete non sequitur.”
BBC Today Open Europe blog

Socialists lead polls in run up to French Parliamentary elections
France’s parliamentary left wing alliance, which includes Francois Hollande’s Socialist party, leads polls with 45% ahead of the first round of the legislative elections on 10 June according to an Ipsos/Logica Business Consulting poll. Former President Nicolas Sarkozy’s UMP party follows on 35% with Marine Le Pen’s far-right Front National on 15%. Brice Teinturier, head of Ipsos told Le Monde “The odds are in the Left’s favour, but their victory will be modest. This will not be a landslide election and there will be no absolute majority”.
Le Monde Les Echos Liberation Nouvel Observateur Le Point

Les Echos reports that credit rating agency Moody’s expects one quarter of loans linked to corporate leveraged buy outs to default in Europe.
Les Echos Telegraph: Warner

Steinbrück: EU can no longer afford to spend 40% of its budget on agriculture
In an interview with Bild, Peer Steinbrück, former German Finance Minister and one of the SPD’s most likely Chancellor candidates in next year’s elections, argues that “We can no longer afford over 40% of EU funds flowing into the agricultural sector and rural areas. We need the money for future investments in education, science, research, infrastructure and programs to combat the mass unemployment of young people.”
Bild Open Europe Research: CAP Reform

New Pew Research Centre survey finds loss of faith in EU integration;
Germany and Merkel Europe’s most respected nation and national leader
A new Pew Research survey has shown that across the eight EU member states surveyed, an average of only 34% of respondents believed that European economic integration has strengthened their country’s economy, with majorities or near majorities in most nations other than Germany believing that it weakened their economies. Among the five eurozone states – Italy, Spain, France, Greece and Germany – an average of only 37% of respondents believed the euro was a good thing.

The survey also found that Germany was the most admired nation in the EU, while Chancellor Angela Merkel was seen as the most capable EU leader in terms of tackling the crisis.
Pew Research Centre FT Süddeutsche IHT

Campaigners are warning that the EU is failing to meet commitments on sustainable fishing, with plans to repopulate fishing stocks by 2015 facing a delay of five years.
BBC

Serbian President Tomislav Nikolic has said that if the EU asked Serbia to recognise Kosovo’s independence he would cancel Serbia’s EU candidacy. He said: “We cannot do that, even if it meant breaking off negotiations at that very moment,” reports EUobserver.
EUobserver France 24 Reuters

We use cookies on the Open Europe website. To learn more about cookies and how we use them please read our privacy policy. Please indicate your preference below. You can change your mind by visiting the privacy policy at any time.

I don't mind cookies being used I don't want any cookies stored on my computer