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Clegg: risk of discrimination against UK in a banking union is not “imaginary”

27 Jun 2012

Writing in the FT ahead of discussions on a European fiscal and banking union, Deputy Prime Minister Nick Clegg warns that the “the risk of discrimination [against the UK] is not imaginary,” although stressing that “economic marginalisation of the UK would bolster calls for a complete exit from the EU.” Clegg calls for financial supervision in the eurozone to be led by the ECB, but for European regulation to be formed by the European Banking Authority – with the UK involved in the latter but not the former.

The FT reports that leading up to this week’s EU summit, the Government has been working closely with financial services firms to ensure that the safeguards to pursues at the discussions are the right one to protect the industry, following concerns that those laid out during December’s veto of the ‘fiscal treaty’ were not the correct demands.

The Times notes that concerns in the City are growing over demands by MEPs to limit the value of a bonus in the financial sector to the recipient’s base salary, as part of the Capital Requirements Directive. Open Europe’s Mats Persson is quoted saying, “There’s an element of special pleading from the City here, but clearly the very strict curbs on bonuses proposed by MEPs would be pretty disastrous for attracting and keeping financial talent in the UK and Europe. As the eurozone moves towards a banking union, battles over bank capital and bonuses could well intensify with the risk being that the eurozone uses an inbuilt majority to outvote the UK and other non-eurozone members.” Andrea Leadsom MP is quoted saying that David Cameron should not shy away from presenting a “shopping list” of UK demands at this week’s summit.
FT: Clegg FT FT 2 FT 3 FT Editorial Telegraph Times

Merkel: No eurobonds “as long as I live”
Van Rompuy’s report on greater eurozone integration significantly scaled back before publication
Germany’s Angela Merkel was quoted as telling a meeting of one of the parties in her coalition on Tuesday that Europe would not have shared total debt liability for “as long as I live”, although her office refused to confirm. Green parliamentary leader Jürgen Trittin described the comments as “stupid” and that they were already a lie given that, “we already have a form of community liability [via the ECB’s bond buying programme]”. Trittin also criticised Bundesbank President Jens Weidmann, saying his resistance to debt pooling was “unwise”. Merkel will meet French President François Hollande in Paris this evening to try and agree a common position ahead of tomorrow’s meeting of EU leaders in Brussels. Meanwhile, the Italian press quotes sources saying that, at yesterday’s meeting of Germany, France, Italy and Spain’s finance ministers in Paris, Germany “made a cautious opening” on bond-buying by the eurozone bailout funds as a means to keep borrowing costs down.

Separately, several papers note that Herman Van Rompuy significantly scaled back his report on greater eurozone integration before its publication yesterday, possibly at France’s request. Ratings agency Egan Jones yesterday cut Germany’s credit rating to A+ from AA-.
FT FT 2 FT 3 FT 4 CityAM CityAM 2 WSJ FT: Spiegel FT: Wolf FT: Magnus WSJ Review&Outlook El País Les Echos EUobserver Telegraph IHT Le Figaro Irish Times Irish Times 2 Irish Independent EurActiv Repubblica Corriere della Sera Corriere della Sera 2 La Stampa European Voice EurActiv Irish Independent Süddeutsche Welt

Samaras sends letter to EU leaders hinting at need for renegotiation in Greek bailout package
Greece yesterday named Yannis Stournaras as the new Finance Minister, following the resignation of the original candidate due to health problems. Stournaras previously worked as an advisor to the Greek government which joined the euro. Separately, Kathimerini reports that Greek President Karolos Papoulias will deliver a letter from Prime Minister Antonis Samaras to tomorrow’s EU summit, which will warn EU leaders of the rising unemployment and deepening recession in Greece, hinting at the need to reform the bailout programme.
FT CityAM WSJ BBC Kathimerini IHT Kathimerini 2

Spanish Prime Minister Mariano Rajoy told MPs this morning that he will continue to push for the Spanish bailout money to go directly to banks, so that the loan “does not undermine the rights of other holders of [our] public debt.” Meanwhile, El País reports that the deficit of the Spanish central government has reached 3.41% of GDP in the first five months of the year, with the ceiling agreed with the European Commission for 2012 set at 3.5%.
El País El País 2 Telegraph Expansión Expansión 2 El Mundo Repubblica

Berlusconi: Germany leaving the euro wouldn’t be a bad thing;
Italian parliament to adopt labour market reforms ahead of EU summit
At a meeting with MPs and Senators from his People of Freedom Party yesterday, Italy’s former Prime Minister Silvio Berlusconi said, “If we rule out greater ECB intervention, then we don’t see which measure could be sufficient to save the entire eurozone. In this regard, we’ve already said that it wouldn’t be a bad thing if Germany left the euro, given that Germany is the only country opposed to the ECB acting as the [eurozone’s] lender of last resort.” He added that, if his party were to win next year’s general election, he would be “ready to serve as Economy Minister” in a new centre-right government. Meanwhile, the Italian government won two separate votes of confidence on its package of labour market reforms yesterday. The final approval by the lower house of the Italian parliament is expected this evening, ahead of the EU summit.
Repubblica AGI Il Sole 24 Ore

Sources quoted by Handelsblatt suggest that Luxembourg’s Prime Minister Jean-Claude Juncker is likely to be confirmed as Eurogroup Chairman.
Handelsblatt

Writing in the IHT, Gunnar Beck, professor of EU law at SOAS, challenges the traditional view that Germany has been the main beneficiary of the single currency.
IHT: Beck

On his Telegraph blog, Benedict Brogan criticises the government’s ambiguous message on Europe, in particular the prospects for a referendum. He argues that “The louder the speculation becomes, the less we know about what Mr Cameron, or for that matter George Osborne, intends. Will there be a vote? And on what? The best we can answer is maybe and no idea.
Telegraph: Brogan

A leader in Sweden’s main daily Expressen, carrying the headline “scrap the EU’s propaganda”, cites Open Europe estimates of the cost of the Commission’s various communication campaigns.
Open Europe Research Expressen

The Times reports that the EU Commission will today lay out new plans aimed at cracking down on tax evasion across the EU, including common minimum rules and sanctions.
Times

The Danish EU Presidency and the European Council President Herman van Rompuy yesterday issued a joint appeal for a compromise aimed at ending the 40 year-long deadlock over setting up a European patent court, reports EUobserver.
EUobserver European Voice

The Irish Times reports that independent MP Thomas Pringle, who is currently contesting the legality of the ESM Treaty at Ireland’s High Court, has urged the Court to note last week’s ruling by the German Constitutional Court that the German government breached its legal obligations to properly inform and consult the German parliament over the issue.
Irish Times

The EU is set to begin talks with Montenegro this Friday on the country’s bid to become an EU member. EU foreign ministers have said that Montenegro must tackle its corruption and crime before being seriously considered.
BBC EurActiv

 

 

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