Daily Press Summary
Merkel to work towards implementing Financial Transaction Tax “as rapidly and in as many countries as possible”
Angela Merkel’s CDU party’s Bavarian sister party, the CSU, has come out in support of the opposition SPD’s call for a quick introduction of a European Financial Transaction Tax, via the EU’s ‘enhanced co-operation’ clause if necessary. Süddeutsche reports that Merkel’s spokesperson has promised that she will work towards implementing the tax “as rapidly and in as many countries as possible”. The SPD’s parliamentary leader Frank-Walter Steinmeier said this morning on ZDF that providing there was concrete progress on the tax, he saw no reason to delay the vote on ratifying the fiscal treaty until the autumn.
Welt Welt 2 Welt 3 Süddeutsche ARD
Christopher Howarth: “The UK needs to achieve a new model for EU cooperation”
Writing on Conservative Home, Christopher Howarth, co-author of Open Europe’s report, ‘Trading places: Is EU membership still the best option for UK trade?’, published yesterday, argues that the UK’s trading interests are currently “best served by remaining within the EU’s customs union” but that “In order to continue to justify its membership, the UK needs to achieve a new model for EU cooperation based on different – and equally legitimate – circles of EU membership…This would achieve a vital reduction in the non-trade costs of EU membership, such as the EU budget and the burden of regulation, while allowing the UK to remain at the heart of the EU’s cross-border trade.”
Open Europe Director Mats Persson appeared on BBC Radio 4’s The World Tonight programme to discuss the report, arguing that, at the current time, an in/out referendum on the EU would raise more questions than answers regarding Britain’s relationship with Europe. Open Europe's Pieter Cleppe appeared on Belgian Radio 1 this morning to talk about the report, noting that public confidence in the EU “has been shattered by the ongoing failure of its euro project. This has happened in all member states, including the UK".
Open Europe’s report was also featured by Belgian daily De Standaard, the Huffington Post, Deutsche-Boerse, EUobserver, Euractiv, PA, Public Service Europe, Czech news sites Volny.cz and Aktualne.cz, Greek financial news site Capital.gr, and Romanian daily Gandul.
In the Times, Rachel Sylvester argues, “The truth is that all three parties lack a clear idea of what sort of Europe they want to emerge from the current crisis…Nobody knows where events will lead. The politicians need to work out what they want the people to vote on before they start floating the idea of a referendum.”
Conservative Home: Howarth BBC: World Tonight Radio 1 De Standaard EUobserver EurActiv Public Service Europe Huffington Post MNI Slate.fr Gandul Volny.cz Aktualne.cz Capital.gr PA Times: Sylvester
Relief turns to doubt as markets begin to question implications of Spanish rescue
The positive market response to the Spanish rescue lasted only a few hours yesterday as doubts over the conditions on the loan, its duration and the rating of Spanish debt began to take hold. This morning both Spanish and Italian borrowing costs were rising. German Finance Minister Wolfgang Schäuble confirmed yesterday that an EU, IMF, ECB ‘troika’ team will monitor the Spanish package as with the other bail-outs, despite claims from the Spanish government that the money would not come with similar conditions. Schäuble also supported the use of the ESM, the permanent eurozone bailout fund, rather than the EFSF, the temporary bailout fund, to deliver the loans since it offers greater security.
Fitch yesterday downgraded Spain’s two largest banks, Santander and BBVA. ABC reports that any bank receiving funds must set about rigorous reforms, including: imposing limits on the shareholder’s dividends, closing down branches, cutting staff, asset sales and limits on remuneration. The Finnish Prime Minister Jyrki Katainen stressed that funds would not go to unhealthy banks and that any that weren’t viable would be broken up.
FT Reuters CityAM WSJ Independent Le Figaro El País: Palacio Telegraph Telegraph 2 Mail Mail: Brummer El País El Mundo Irish Independent Irish Times Le Monde Guardian Guardian 2 Les Echos FT 2 Expansión El País 2 WSJ 2 FT: Jenkins Irish Times 2 Les Echos 2 Irish Times 3 Le Monde 2 Les Echos 3 El Pais: Vidal-Folch AFP ABC Dow Jones Kathimerini Bloomberg Handelsblatt
Barroso sees EU banking union achievable from next year
In an interview with the FT, European Commission President José Manuel Barroso suggested that a European banking union – including a single watchdog, an EU-wide deposit guarantee scheme and a resolution fund financed through bank levies – could be achieved by next year without changing the EU Treaties.
Barroso also noted, “We have a Chancellor of Germany that is indeed proposing a political union for Europe, which is extremely ambitious. We have a French President that has been highlighting the need for a more European approach regarding crucial issues like growth and investment. And we have a British Government – and this is indeed a very interesting development – that while stating its willingness to stay out of the euro, assumes as indispensable and desirable to further integration in the eurozone”, adding, “It’s of course the British right to decide if they want or not to join further steps of integration. If other countries that are not in the euro area want to join us, I think Britain is going to accept this.”
FT: Barroso FT 2 Reuters Bild ARD
Reuters: Eurozone officials discussed limiting cash withdrawals, introducing capital controls if Greece leaves the euro;
Austrian Finance Minister: Italy could need financial assistance
Reuters reports that, as part of contingency plans to cope with a potential Greek euro exit, eurozone officials have discussed limiting the size of cash withdrawals from ATM machines in Greece as a worst-case scenario, as well as introducing capital controls and border checks for Greeks trying to leave the country. Open Europe’s Raoul Ruparel featured in a documentary aired last night by Greek TV station ANT1 looking at Greece’s prospects in the event it left the euro and returned to the drachma.
Meanwhile, Cypriot Finance Minister Vassos Shiarly yesterday warned that his country may have to seek a bailout by the end of the month, arguing, “The issue is urgent. We know the recapitalisation of [Cypriot] banks must be completed by 30 June, and there are a few days left.” Separately, Austrian Finance Minister Maria Fekter said in an interview yesterday, “Italy has to bring itself out of its economic dilemma of very high deficits and debt, but of course it can be that – given the high rates that Italy already pays to refinance on markets – it can also come to supportive aid.”
FT CityAM CityAM 2 CityAM 3 WSJ Les Echos Les Echos 2 EUobserver El País La Stampa Kathimerini Independent Telegraph Irish Independent EurActiv Independent Le Figaro 2 Telegraph Mail Le Monde IHT Le Figaro Il Sole 24 Ore Le Monde Les Echos 3 Corriere della Sera FT 3 Les Echos 4 Ta Nea
Gideon Rachman: We isolate and overload Germany at our peril
Writing in the FT, Gideon Rachman argues that “despite the burdens and risks that Germany has already taken on, the country’s government finds itself abused for not doing even more. Isolating and berating Berlin, while trying to force the country to underwrite the finances of the whole of the eurozone, is a politically dangerous course.”
FAZ’s Italy correspondent Tobias Piller argues that "Italy’s media and politicians are not, in spite of their difficult situation, discussing reforms. The country is far more pre-occupied with the question of when Germany will finally rescue the Italian economy with eurobonds". Also in FAZ, former ECB chief economist Otmar Issing warns against any further mutualisation of debt, warning that “the principle that each country is responsible for the mistakes of its own policy (no-bail-out-clause) is not only a fundamental part of the foundation of the monetary union, it is also a non-negotiable element of a union of sovereign states.”
FT: Rachman FT: Muellbauer FT: Davies Times: King WSJ: Noyer WSJ: Carney CityAM: Heath CityAM: Gallo FAZ: Piller FAZ: Issing FT Editorial
A new INSA poll for Bild has revealed that Angela Merkel’s CDU party leads on 35%, followed by the SPD on 31% and the Greens on 13%. The pirate party is on 7% while the FDP - Merkel’s junior coalition partner – and the far-left Die Linke are on 5% each.
EUobserver reports that the Bank for International Settlements has said that EU implementation of 'Basel III' capital rules is weaker than it should be due to special EU rules for bank-linked insurance firms.
France’s former ruling centre-right UMP party has rejected the Socialist’s offer of an electoral union to block the far-right Front National’s chances in the second round of parliamentary elections. The Front National won close to 14% of the vote last Sunday.