Daily Press Summary
Violent protests in Athens as Greek parliament approves latest austerity package; FTD: German Finance Minister supports Greek default, but Merkel does not
After a ten-hour debate the Greek parliament last night approved the latest package of austerity measures amid violent protests in Athens. The package passed by 199 votes to 74, but dozens of government MPs rebelled or abstained – leading to 43 being expelled from the governing coalition parties. Ahead of the vote, Greek Prime Minister Lucas Papademos issued a stark warning, saying, “[This package is] the only alternative to a catastrophic default…that would force Greece, sooner or later, to leave the euro…The social cost of this package is limited in comparison with the social and economic disaster that would follow if it is not adopted.”
The leaders of Greece’s main political parties must now make a written commitment to fully implement the package regardless of who wins the elections in April, before a meeting of eurozone finance ministers on Wednesday. In an interview with Welt am Sonntag, German Finance Minister Wolfgang Schäuble said, “Greece’s promises are no longer enough for us. They must…first implement part of the old programme.” In the same interview, Schäuble also touched on the prospect of a Greek exit from the eurozone, saying, “That is all in the hands of the Greeks themselves. But even in the event [Greece leaves the eurozone], which almost no one assumes will happen, they will still remain part of Europe.”
FT Deutschland quotes a leading member of the CDU/CSU parliamentary group saying, “Schäuble supports the bankruptcy of Greece, [German Chancellor Angela] Merkel wants to strictly avoid it…It goes back and forth, which is not very helpful.” Der Spiegel reports that the German government is keen to avoid Greece leaving the euro, and is seeking a plan B which could allow the country to default but remain in the eurozone. A leader in Bild criticises the hatred directed towards Germany in recent protests in bailed out euro countries. Bavarian Prime Minister Horst Seehofer has called for a referendum in Germany on the eurozone bailouts, and a change to the German constitution which would allow such an action.
It also emerged over the weekend that the Greek bailout may be increased to €145bn, according to the Telegraph. Greek Finance Minister Evangelos Venizelos said, “The banks need more money, and their [the EU/IMF] idea is for financing in 2015 too.” Meanwhile, the China Investment Corporation (CIC), China’s sovereign wealth fund, has stated that it is unlikely to invest heavily in eurozone government bonds.
On his Telegraph blog, Open Europe’s Director Mats Persson argues that “under the assumptions underpinning the second bailout package, Greece is expected to magically return to growth in 2013…And Greece’s debt reduction under this bailout package is actually very small, leaving its debt burden hovering above 140% of GDP this year and interest payments on debt eating up a large amount of government spending…This is to say that, even though there’s still a lot of scope to muddle through, even with the additional bailout package and the debt write-down currently being discussed, Greece is on course to a proper, and full, default within the next few years.”
RTP reports that Eduardo Catroga, Portugal’s former Economy Minister who negotiated the terms of the Portuguese bailout with the EU/IMF/ECB Troika on behalf of the ruling Social-Democratic Party, told a conference in Lisbon that the conditions attached to the Portuguese rescue package ought to be renegotiated in light of the worsening of the eurozone crisis, adding that the initiative should be taken by the Troika.
El Mundo reports that Spanish Labour Minister Fátima Bañez will today hold talks with trade unions and opposition leader Alfredo Pérez Rubalcaba to discuss the reform of the labour market adopted by the government last week. Spanish trade unions have called a strike on 19 February in protest against the reform.
Telegraph blogs: Persson FT CityAM WSJ Times EUobserver Il Sole 24 Ore La Stampa blogs: Zatterin Independent Le Figaro Le Figaro 2 Expansión EurActiv European Voice Express Telegraph Guardian Telegraph 2 Guardian 2 Irish Independent Irish Times Welt am Sonntag: Schäuble RTP El Mundo WSJ 3 Le Figaro Irish Times 2 Saturday’s Telegraph FT 2 CityAM 2 WSJ 2 IHT Irish Times 3 Handelsblatt Handelsblatt 2 FAZ Reuters Bild Leader Welt am Sonntag Times: Leader Times: Manolopoulos FT: Davies FT: Dizard FT: Munchau FT Lex CityAM: Westgate WSJ: Nixon El País: Ruiz-Jarabo Irish Independent Telegraph: Evans-Pritchard Guardian: Margaronis Guardian: Stewart
Greek daily Kathimerini notes that, of the €4.3bn earmarked for Greece under the EU’s European Social Fund, more than €1.1bn has not yet been absorbed despite the unemployment rate surpassing 20% in November. Sources from the Education Ministry said that staff shortages are making it difficult for officials to plan the programmes that will absorb EU structural funds.
Open Europe research Kathimerini
The heads of the City’s main trade bodies have written to the Telegraph in response to EU Taxation Commissioner Algirdas Semeta’s previous op-ed in the paper defending the idea of an EU-wide financial transactions tax (FTT). The letter argues that the FTT “would not achieve the stated aims, and would have a fundamental and negative impact on the European economy and employment across all sectors.”
Open Europe research Telegraph Telegraph: Business letters
The FT reports that fund managers are warning that the EU’s proposed rules on insider trading – which form part of the review of the EU’s Market Abuse Directive – potentially threaten those who hold investigative meetings with companies they might invest in.
Open Europe research FT
Nicolas Sarkozy is expected to officially announce his candidacy for the upcoming French presidential elections this week, as the March 16 deadline for the nomination approaches. In an interview with Le Figaro on Sunday, Sarkozy said that he would campaign on a hard-right platform of restricted immigration, Christian values and welfare cuts.
La Croix Le Figaro Le Figaro: Sarkozy Irish Times Times Guardian
The EU is set propose an extension of its limits on mobile phone roaming charges through 2022, reports the IHT. Experts believe that the new measures could lead to lower roaming prices in non-EU states, as EU carriers will seek to put pressure on foreign operators to lower their charges.