Daily Press Summary
Spanish government and IMF deny rescue plan reports; Almost €100bn in capital fled Spain between January and March
IMF Director Christine Lagarde and Spanish Economy Minister Luis de Guindos yesterday moved swiftly to deny reports by the WSJ that the IMF was assessing how much money Spain would need if it were forced to seek a bailout. One of the sources quoted by the paper said that the rescue loan could be of as much as €300bn over three years.
Meanwhile, data published by the Spanish central bank shows that €97bn in capital was pulled out of Spain during the first quarter of 2012 – of which over €66bn only in March. Spanish Deputy Prime Minister Soraya Sáenz de Santamaría held talks with Lagarde and US Treasury Secretary Tim Geithner in Washington yesterday, to discuss the situation of Spain’s banking sector.
On his Telegraph blog, Open Europe Director Mats Persson looks at the difficulties for the Spanish government to control spending in its regions, arguing, “Talk of collective borrowing in the single currency – via Eurobonds – are intensifying. If you sit in Berlin or Helsinki, such an arrangement can only work if subject to a brutally simple bargain: we give you our credit rating, if you give us control over your spending. As a very big microcosm of the eurozone, the case of Spain shows just how difficult it’ll be to pull this bargain off.”
Telegraph blogs: Persson Il Sole 24 Ore EUobserver El País Expansión FT 2 CityAM 2 WSJ AFP El Economista Europa Press Times Reuters WSJ 2 AP BBC El Mundo El País FT CityAM Telegraph Mail Le Monde Les Echos Economist: Leader Economist Economist 2
Counting has started in yesterday’s Irish referendum on the fiscal treaty, with senior figures from both sides of the campaign suggesting a victory for the ‘Yes’ vote. However, overall turnout is estimated to have been below 50%. Meanwhile, the parliaments of Sweden, Denmark and Latvia ratified the fiscal treaty yesterday, reports Les Echos.
Irish Times Irish Times: Live Blog Irish Independent Guardian FT CityAM WSJ Reuters EurActiv Mail: Heffer Le Monde Les Echos Les Echos 2
The FT reports that the UK has filed a lawsuit at the ECJ to stop ESMA – the EU’s financial markets watchdog – being granted the power to ban the short-selling of financial products.
FT Open Europe research
European Commission proposes €315,037 daily penalty on Germany for failing to implement Data Retention Directive
The European Commission has proposed that the ECJ impose a daily penalty of €315,037 on Germany over its failure to adopt a new law implementing the EU’s Data Retention Directive, two years after the German Constitutional Court struck down the original law as unconstitutional. However, Süddeutsche reports that the liberal FDP Justice Minister Sabine Leutheusser-Schnarrenberger is still refusing to back down over the issue, which Die Welt notes is increasingly straining relations within the ruling coalition.
EC Press Release Welt FAZ Focus
The last Public Issue survey published by Kathimerini before the two-week pre-election poll ban gives left-wing SYRIZA the lead with 31.5% of vote intentions, followed by centre-right New Democracy on 25.5% and Socialist PASOK party on 13.5%.
Kathimerini Economist Handelsblatt FTD FTD 2
Merkel says treaty change is on the table – “there are no taboos”;
Draghi: Current eurozone set-up is “unsustainable”
German Chancellor Angela Merkel said yesterday, “There are integration steps which will require treaty changes. We are not at that stage today but nevertheless there are no taboos.”
ECB President Mario Draghi described the current set-up of the eurozone as “unsustainable” and urged leaders to quickly come up with a “banking union” to protect depositors and prevent failed banks from threatening the financial system. Draghi criticised the current handling of the banking crisis saying that when regulators are faced with banks needing more capital, they “underestimate the problem and then come out with a second or third or fourth assessment,” citing Franco-Belgian bank Dexia and Spain’s Bankia. He also signalled his support for using the ESM, the eurozone’s permanent bailout fund, to recapitalise banks.
Separately, the FT quotes Italy’s central bank Governor Ignazio Visco as saying that the ECB has not ruled out a third longer-term refinancing operation, although one is not necessary at the moment.
Meanwhile, Italian Prime Minister Mario Monti said yesterday that “Germany should really reflect deeply” about the possibility of a public “backlash” in the eurozone countries undergoing major structural reforms if there is no prospect of economic growth. World Bank Chief Robert Zoellick writes in the FT, “Germany will not achieve its strategic aims of a more integrated and fiscally sound eurozone unless it supports reforming states and prepares for contagion.”
Times IHT Guardian Independent Times: Leader City AM WSJ Telegraph EurActiv Mail EUobserver Le Figaro El País FT BBC FT: Zoellick Economist: Charlemagne Economist FT Editorial FT: Peel WSJ: Fidler WSJ Review & Outlook Telegraph: Reece Telegraph: Warner
Fraser Nelson, the Editor of the Spectator magazine, writes in the Telegraph that renegotiating the terms of the UK’s EU membership would give David Cameron an opportunity to “reset the clock on his premiership”. He argues, “Europe need not split the Coalition. Both Cameron and Osborne can renegotiate a looser membership, which would not trigger a referendum because no more powers would be passed to Europe.”
The BBC reports that the House of Commons Environment, Food and Rural Affairs committee has said the EU should allow member states the freedom to find their own ways of achieving environmental benefits under reforms of the EU’s Common Agricultural Policy.
BBC Open Europe research
According to the last World Competitiveness Yearbook compiled by Swiss-based business school IMD, Sweden and Germany are the only EU countries in the top ten most competitive economies in the world, coming in at fifth and ninth respectively. The UK came in 18th, France 29th while Spain fell to 39th, below Mexico and Turkey.
IMD Press Release Irish Times Welt
Former European Court of Auditors President Jan Karlsson has said that the annual Declaration of Assurance on EU accounts – which has seen the Court fail to give EU accounts a clean bill of health for the last 17 years – should be scrapped because it is “misunderstood” by the public. He advocated issuing a statement every five years instead, reports EUobserver.
In business weekly Heti Valasz, Hungarian Economy Minister Gyorgy Matolcsy accuses the EU of building a “European empire”, which he claims is “contrary to our interests, because it erodes the independence of the Hungarian state, necessary for the country’s economy development.”