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Member states to consider plan to give non-euro countries stronger say in banking union; Commission drops cross-lending for national resolution funds

24 Oct 2012

EU officials have circulated a document outlining the establishment of a new supervisory board within the ECB, a body that would play a role in supervising lenders and where non-eurozone members that choose to join would have a vote. However, the final say would still rest with with the ECB governing council, although it must explain itself if it rejects a decision by the supervisory body.

Meanwhile, Handelsblatt reports that the Commission has been forced to drop plans contained in its proposed directive for a harmonised bank resolution scheme, which would have seen national schemes lend to each other, after opposition from MEPs and in the Council.

Handelsblatt Reuters WSJ

Clegg gives Cameron green light to veto 2014-2020 EU budget;
Commission and MEPs’ demands for 2012 and 2013 would add £2bn to UK’s bill
The Mail reports that Nick Clegg has given David Cameron the green light to veto an inflation-busting rise in the 2014-2020 EU budget.

Meanwhile, the European Commission has demanded a further £7.3bn for the current year’s budget, adding £700m to Britain’s bill. At the same time, the European Parliament voted for a 6.8% increase in the 2013 budget, raising Britain’s annual gross contribution from £15bn to £16.3bn. Taken together they would add £2bn to Britain’s commitments over the next two years. The EP also backed a 5% increase to the EU’s 2014-2020 budget, in line with the European Commission’s original proposal. Open Europe Director Mats Persson is quoted as saying, “This is a spectacular own goal for the Brussels institutions. Both national governments and households have to pay bills at the end of the month or year. Just like them, the Commission must learn how to prioritise and find savings if there is not enough in the pot.”

Dutch Finance Minister Jan Kees de Jager said the European Parliament’s vote was “incomprehensible”, adding “This can't be the case, the Netherlands will vote against this with vigour.”
Mail Elsevier EUobserver EUobserver 2 La Stampa Euractiv European Voice Guardian

Plans for harmonisation of EU bank resolution funds meets opposition
Handelsblatt reports that the Commission has been forced to drop plans for the cross border harmonisation of bank resolution funds included in the EU framework for bank recovery and resolution. Article 97 of the proposal which suggests that national resolution funds will be able to borrow from similar funds in other EU countries if they run short of cash, has reportedly been dropped after opposition amongst MEPs and in the Council.


Bank of Spain: Additional austerity measures could be needed to meet 2012 deficit target;
New poll shows EU membership would be a factor in Catalan independence referendum
Spanish Treasury Minister Cristóbal Montoro told MPs yesterday that the deficit of the Spanish central government had decreased to 3.9% of GDP at the end of September – with the target for 2012 fixed at 4.5% of GDP. However, the Bank of Spain yesterday warned that the Spanish economy contracted by a further 0.4% during the third quarter of the year, suggesting that additional austerity measures could be needed to comply with the EU-mandated deficit target for this year.

Separately, according to a new Feedback poll for Catalan TV channel RAC 1, 62% of Catalans would vote for independence if they were given guarantees that an independent Catalonia would remain a member of the EU. However, the figure would go down to 44.7% if Catalan voters were sure that Catalonia would be out of the EU after independence, notes La Vanguardia.
El País El País 2 Expansión El Mundo La Vanguardia La Vanguardia 2 FT FT: Cœuré WSJ

Greek coalition rejects Troika demands for labour market reform
The Greek coalition government yesterday failed to reach an agreement on the implementation of labour market reforms demanded by the EU/IMF/ECB Troika. Süddeutsche reports that Greece will be given a two year extension in its fiscal consolidation plan, although this was denied by ECB Executive Board member Jörg Asmussen. The Greek Finance Ministry along with the Troika have rejected the proposals for a bond-buyback as a way to help reduce Greek debt.

Kathimerini Kathimerini 2 Kathimerini 3 Kathimerini 4 Kathimerini 5 Süddeutsche FTD Spiegel FAZ El País CityAM

ECB President Mario Draghi will today speak at a closed meeting of the Bundestag Budget, Finance and Europe committees to defend the ECB’s new bond-buying programme. Ahead of the visit, CDU MP Klaus-Peter Willsch said, “The ECB’s model is no longer the Bundesbank but Banca d’Italia”, according to Deutsche Wirtschafts Nachrichten.

In the Mirror, Kevin Maguire writes, “
Senior figures in Labour are finally realising a popular case can be made in favour of the European Union after years of shying away from the argument…Labour’s manifesto will pledge a vote…in the hope of lancing the anti-European boil.”
Mirror: Maguire

The Guardian reports that the Government is planning a draft bill introducing limited voting rights for prisoners to comply with the Strasbourg-based European Court of Human Rights. However, the announcement is likely to be postponed until after the police commissioner elections on 17 November.
Open Europe research Guardian Conservative Home: Goodman

DPA reports that 96% of Germans do not believe that the eurozone crisis is being overcome, compared to 3% that do, according to a new Forsa poll for Stern.
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