Daily Press Summary
Coalition talks progress in Greece as positive market response fades;Merkel looks to play down chances of renegotiation of Greek bailout package
New Democracy leader Antonis Samaras held meetings with the leaders of the largest Greek political parties yesterday but SYRIZA, the second largest party, said it would take up a position in opposition. However, more positive talks were held with PASOK and the Democratic Left leaders, with these parties expected to form the governing coalition. Negotiations will continue today, focusing on the set up of the government with PASOK pushing for numerous ministerial posts and the involvement of non-political figures in the cabinet. This morning, PASOK leader Evangelos Venizelos also called for a ‘negotiating group’ to be created, which could include SYRIZA, to lead discussions with the eurozone over adjusting the current bailout programme.
Despite positive comments on the potential for some renegotiation coming out of Germany over the weekend, German Chancellor Angela Merkel stressed yesterday “No departures can be made from the reform measures…we have to count on Greece sticking to its commitments.”
On the Spectator’s Coffee House blog, Open Europe’s Vincenzo Scarpetta argues, “The threat of new elections, which would probably lead to Greece's exit from the Eurozone, will constantly hang over the country’s head like the famous sword of Damocles.”
In City AM Open Europe’s Raoul Ruparel notes, “the Eurozone may tinker at the edges: slightly lower interest rates; extend the debt repayment period; possibly even ease the deficit targets slightly and stump up some funds for investment. But, the core aims of the agreement will ultimately stay the same. This means the agreement will remain unachievable, ineffective and poorly targeted at the real problems in Greece (namely competitiveness and systemic administration flaws).” Raoul also appeared on RTE Drivetime discussing the election. Open Europe’s Q&A on the Greek elections was featured on Zerohedge, Italian news site Linkiesta, in Greek business daily Capital, Deutsche Mittelstands Nachrichten, Deutsche Wirtschafts Nachrichten, Metro, in Belgian De Tijd, in Dutch daily Elsevier, on the Guardian and Telegraph live blogs, Channel 4 news online and the Parliament.
Guardian Kathimerini IHT FT CityAM CityAM 2 WSJ WSJ 2 FT 2 FT 3 Reuters CityAM 3 Irish Times Irish Times BBC European Voice EurActiv Irish Independent Irish Independent Coffee House blog: Scarpetta EUobserver Kathimerini 2 IHT 2 Independent Welt Welt 2 Welt 3 Welt 4 Telegraph CityAM: Ruparel FT: Rachman FT: King FT: Hatzis Welt: Bruederle Times: Sylvester Times: Maddox Reuters Süddeutsche: Kornelius
G20 pressures eurozone countries to sort out the crisis;
BRICS agree to boost their IMF contributions
At the G20 summit in Mexico, eurozone leaders have come under pressure to take decisive action to resolve the crisis, especially with regard to bank recapitalisation. European Commission President José Manuel Barroso hit back at criticism of how the eurozone is handling the situation, and told reporters, “We are not coming here to receive lessons in terms of democracy or in terms of how to manage our economy…This crisis was not originated in Europe.” Separately, BRICS countries have agreed to boost their contributions to the IMF. “As a result, total pledges have risen to $456bn, almost doubling our lending capacity”, IMF Managing Director Christine Lagarde said in a statement.
FT: Summers City AM: Heath WSJ: Oro Die Welt: Wergin Die Welt: Poschardt Express Irish Independent Telegraph Telegraph 2 WSJ Guardian FT FT 2 FT 3 WSJ City AM City AM 2 BBC EurActiv EUobserver Sun Times Irish Times Irish Times Telegraph Süddeutsche Les Echos Le Figaro
The FT reports that support for a eurozone banking union is growing, with the leaders of France, Germany, Italy, Spain and Austria willing to give the ECB a greater supervisory role, particularly over large cross-border banks.
FT FT Analysis
Spain calls for ECB intervention as borrowing costs stay at unsustainable levels;
RBS: Spain will need a bailout of at least €300bn
Spanish Treasury Minister Cristóbal Montoro told the Senate yesterday that the ECB should act “firmly and with reliability” to stop the rise of eurozone peripheral countries’ borrowing costs. In an auction this morning, Spain had to pay interest rates above 5% on its twelve and 18-month debt, reports Expansión. The interest rate on ten-year bonds remains above 7% – a level widely deemed as unsustainable. City AM quotes RBS’s Alberto Gallo saying that Spain is expected to ask for a full bailout, which could be of at least €300bn. Separately, El País notes that Spain’s ruling Partido Popular and opposition Socialist Party have agreed to ratify the fiscal treaty on Thursday, ahead of a meeting of eurozone finance ministers.
El País El País 2 El País 3 Expansión Expansión 2 Expansión 3 Expansión 4 Welt Independent Telegraph Telegraph 2 Guardian Le Figaro El Mundo WSJ City AM
German Constitutional Court rules Bundestag had not been sufficiently informed over ESM
The German Constitutional Court has this morning ruled that the government had not sufficiently informed or consulted parliament over the ESM – the eurozone’s new permanent bailout fund - and also the ‘Euro-Plus-Pact’. According to the verdict, the government will in future be obliged to inform the Bundestag about EU-related international treaties “at the earliest possible opportunity”.
Separately, the Irish High Court will today begin proceedings in a constitutional challenge of the ESM brought by Independent MP Thomas Pringle who is seeking a referendum on the ESM Treaty as well as on the EU Treaty change enabling the ESM to come into existence.
Süddeutsche Welt FAZ NewsTalk Irish Independent: Arnold
Italian Europe Minister Enzo Moavero Milanesi told reporters in Brussels that Italy will propose that “the ECB or other financial institutions” intervene “semi-automatically” every time the spread between the borrowing costs of Germany and eurozone peripheral countries widens excessively.
Reuters Italia Wall Street Italia EUobserver AGI
The Times reports on an opinion poll that 57% of Britons blame the eurozone crisis for the state of the UK economy while 64% think the fault lies with the risks taken by British banks.
Die Welt reports that the European Parliament’s Economic and Monetary Affairs committee will back Commission plans to make credit rating agencies legally liable for their ratings.
EUobserver reports that despite reservations from Cyprus, Austria and France, the EU hopes to announce that it will grant Turkey visa free travel by 2014/2015.
The EU has rejected claims that it is considering easing the terms on Ireland’s EU loans, with Troika officials denying there had been any discussion on lengthening the repayment period.
New EU rules could raise the cost of retirement by 20%, Deloitte has warned. The accountancy firm said that Solvency II reforms are set to affect EU insurance firms by increasing capital requirements and setting common standards.
Euractiv reports that while EU officials will argue in favour of faster and steeper carbon emission reductions at this week’s Earth Summit in Rio, Poland has again made it clear that it will not accept the EU unilaterally forging ahead in the absence of a global agreement.