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CDU deputy warns that Germany will not agree to further aid for Greece; Spanish and Italian property markets stall

13 Aug 2012

Referring to September’s troika report on Greece, Michael Fuchs – the deputy parliamentary leader of Angela Merkel’s CDU party – told Handelsblatt, “Even if the glass is half full, that won’t be sufficient for a new aid package. Germany cannot and will not agree to that. We reached the point where the Greeks must show they are capable of delivering a shift long ago.” In an interview with German magazine Focus, German Economy Minister Philipp Rösler says he has “lost his illusions” regarding Greece’s ability to implement the necessary reforms. The WSJ reports that Greece is expected to issue up to €3.1bn in short-term Treasury bills tomorrow, in an attempt to raise money to cover the €3.7bn in debt maturing and interest payments due on 20 August.

Separately, the FT reports that the Spanish and Italian commercial property markets have collapsed, with the number of transactions falling by 90% in the second quarter of 2012 due to increasing concerns over the eurozone crisis.
Handelsblatt Reuters Kathimerini WSJ Kathimerini 2 EUobserver FT FT 2 Sunday Telegraph: Halligan La Tribune

Former German Finance Minister backs eurozone debt-pooling
In an interview with Süddeutsche published over the weekend, former German Finance Minister and one of the SPD’s most likely chancellor candidates Peer Steinbrück became the latest senior party figure to publicly back eurozone debt-pooling and closer fiscal integration, arguing that “Germany ought to make its creditworthiness and its solidarity available to weaker countries, for which it could demand something in return. There must be an EU authority which will have direct access to national financial policy making.” Steinbrück also dismissed opposition to debt-pooling as “featherbrained”. Meanwhile, SPD Chairman Sigmar Gabriel also defended the policy, arguing on Deutschlandfunk that “Mrs Merkel is [already] establishing a secret debt union. We are constantly ratifying new bailout funds for which Germany is liable.”

However, a new TNS Emnid poll published by German magazine Focus found that 52% of respondents were opposed to joint debt liability between states, with 31% in favour. FAZ’s political editor Rainer Hank warns that “Europe risks breaking up”, adding that calls for a “political union” are “nothing more than a fantasy of poets.” He writes, “It’s time to save Europe from the European saviours and put forward alternatives”, and calls for “a strengthening of national sovereignty…which is often dubbed as going backwards, if not anti-European.”
Reuters Süddeutsche Welt am Sonntag: Schuster Dow Jones Hamburger Abendblatt Welt FAZ: Hank

Italian comedian Beppe Grillo, whose Five Star Movement has been polling at over 20% during the past few months, writes on his blog, “A referendum on the euro and the restructuring of [Italy’s public] debt is ever more necessary. See you in parliament...It will be a pleasure.”
Beppe Grillo’s blog Il Sole 24 Ore FT WSJ

Pawel Swidlicki: Given political will, EU reform could become an unlikely area of consensus for the revamped Coalition 2.0
Writing on Liberal Democrat Voice’s the ‘Independent View’, Open Europe’s Pawel Swidlicki argues that while the Conservatives and Liberal Democrats do not see eye to eye on the EU, given political will in the context of a ‘coalition reset’, there are a number of areas of potential agreement. He writes, “In terms of immediate action and potential achievability, there is no better target than reforming the EU budget [which has] grown year on year despite the vast majority of spending going on policies at best irrelevant, and at worst outright damaging, in the fight to deliver the jobs and growth Europe so desperately needs.” Pawel sets out suggestions for how the CAP and regional policy – the two biggest spending areas – could be reformed, noting that this “would require the coalition adopting a much tougher line in the on-going negotiations over the EU’s next long-term budget than it has done, or else risk the existing flawed spending patterns becoming locked in until 2020…Having shown that they can be ‘tough’ on the EU, Lib Dems would then have greater credibility when making the positive case for its continued involvement in other areas.”
LDV: Swidlicki Open Europe Research: Reforming the EU budget

Open Europe’s blog post responding to Italian Prime Minister Mario Monti’s remarks that eurozone governments “should not be completely bound by the decisions of their parliaments” is quoted by Der Spiegel Online.
Open Europe blog Spiegel Online

The FT reports that draft guidance from the EU’s financial markets watchdog ESMA on the implementation of the Alternative Investment Fund Managers (AIFM) Directive may not allow the FSA to exempt investment and hedge funds from curbs on pay, including deferring 40% of variable pay and claw-backs for underperformance.
FT Open Europe research Open Europe blog

In an interview with Bild am Sonntag, German Foreign Minister Guido Westerwelle said, “I hope someday we have a real European constitution and that there will also be a referendum on it.”
Bild am Sonntag: Westerwelle EUobserver El País La Tribune

Writing in the WSJ, EU Economic and Monetary Affairs Commissioner Olli Rehn lays out how the EU will build ‘EMU 2.0’, noting that, given the importance of the choices being made over the future of Europe, “All efforts must be made to ensure that they are taken in a way that European citizens consider legitimate.”
WSJ: Rehn

According to an IFOP poll published by Le Figaro on Saturday, only 33% of French are confident that French President François Hollande and his government will be able to reduce France’s public deficit and debt.
Le Figaro
EUobserver FT Welt

In an interview with L’Echo, Belgian Central Bank Governor Luc Coene warns that Belgium risks missing its deficit target for this year, due to the country’s worse than expected growth prospects.
L’Echo: Coene

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