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Greek PM refuses to rule out further financial assistance for Greece

30 Mar 2012

In an interview with Italian business daily Il Sole 24 Ore, Greek Prime Minister Lucas Papademos argues, “Greece will do everything so that a third adjustment programme is not needed…Having said that, Greece may not have access to the markets even if all the measures are fully implemented. It’s difficult to foresee what the conditions and the expectations on the markets will be in 2015. One can’t rule out that some form of financial assistance could be necessary, but we must work intensively to avoid this.”
Il Sole 24 Ore: Papademos Kathimerini Les Echos Economist: Charlemagne WSJ

Eurozone plans to boost bailout funds fail to appease IMF;
Bundesbank attracts criticism as it rejects Greek, Irish and Portuguese bonds as collateral
Eurozone finance ministers meet in Copenhagen today to discuss how best to combine the EFSF and ESM, the eurozone’s temporary and permanent bailout funds respectively. Despite Germany pushing for the most limited combination, the most likely option now looks to include keeping the extra €240bn of unspent EFSF funds in reserve for ‘exceptional circumstances’ until mid-2013. However, since it will take some time for the ESM to reach its full lending capacity, the combined lending capacity of the two will probably actually never top €500bn. French Finance Minister Francois Baroin said "The bailout fund is a bit like the nuclear weapon in the military domain…It is not intended to be used but to act as a deterrent."

At a summit in New Delhi yesterday, the leaders of the BRICs suggested that any future increase of IMF contributions would be conditional on an increase of their voting rights. This deals a significant blow to eurozone leaders hopes that the IMF would increase its resources once a deal on the eurozone firewall had been agreed. 

FAZ reports that the Bundesbank has become the first central bank to reject the use of Greek, Irish and Portuguese bonds as collateral for its lending operations, after the ECB recently gave national central banks the discretion to do so, marking a split between different central banks and the eurozone. The Telegraph reports that the German government has introduced a draft law which would give the Bundesbank a greater role in monitoring overheating in the economy, in what is seen as an effort to counter the inflationary effects of loose ECB monetary policy. 
FT Irish Times Le Monde Les Echos Le Monde 2 Irish Independent Telegraph EUobserver Le Figaro Independent 2 FT 2 WSJ  Irish Times Irish Independent 2 FT 3 Les Echos 2 La Tribune FT 4 Les Echos 3 Les Echos 4 EUobserver 2 Le Monde 3 Les Echos 5 FT Editorial FT: O’Sullivan Boersen-Zeitung FAZ Bild: Schäuble Welt Telegraph 2

Lib Dem Minister says UK should resist “barmy” ECJ ruling on Working Time Directive
Norman Lamb, the Lib Dem Employment Minister, told BBC Newsnight that he regards new rules allowing workers who fall ill when on annual leave to receive extra holiday in lieu, driven by an ECJ ruling on the EU’s Working Time Directive, “as barmy”. He told the programme that the UK needed to find allies in attempting to resist the new rules and said that the ECJ is extending employment rights without the “democratic mandate to do it”. He said that the UK should resist pressure to implement the ECJ ruling, which would risk the UK facing infraction proceedings at the court.

Dutch coalition closes in on agreement on budget cuts
The Dutch media reports that a deal on the Dutch budget may be close, as coalition partners seem to have agreed to €14bn worth of austerity measures, including a €1bn cut in development aid spending. The WSJ reports that the Netherlands’ status as a ‘core’ eurozone country is questioned amidst falling household consumption, an anticipate 0.9% economic contraction, and the government’s failure to meet its deficit targets.
Nu.nl Telegraaf Volkskrant Volkskrant leader NRC WSJ Les Echos Irish Times

Vincenzo Scarpetta: Lack of popular mandate could come back to haunt Monti when his reforms start to bite
In an opinion piece for EUobserver, Open Europe’s Vincenzo Scarpetta argues, “While [Italian Prime Minister Mario] Monti is pushing through some vital changes in Italy, his lack of a clear mandate from voters could backfire – and spell big problems for the eurozone… already there are signs that support for him is dwindling, as his reforms become better understood.”

Vincenzo concludes, “The best scenario would perhaps be for Monti himself to run in the elections in 2013 (or even earlier), to get that clear mandate and get on with business…Technocracy may be working in Italy for now, but at the end of the day, there is no replacing the power and conviction that only democratic legitimacy can provide.”

Meanwhile, in a letter to Il Corriere della Sera, Monti argues, “What happens after the [2013 Italian] elections? Indeed, ‘political’ governments will be back, as is natural (even in Japan I declared that I will disappear and that there’s no such thing as ‘Montism’). But I think this should not be seen as a risk.” Separately, Il Sole 24 Ore reports that Italian research institute EURISPES has estimated the size of black economy in Italy at €540bn in 2011 – around
35% of Italy’s ‘official’ GDP.
EUobserver: Scarpetta Il Sole 24 Ore Corriere della Sera: Monti’s letter

Spanish government to unveil new austerity measures;
800,000 Spaniards marched against the government’s labour market reforms
The Spanish government is due to unveil a new set of austerity measures aimed at bringing Spain’s public deficit down to 5.3% of GDP by the end of the year. El País reports that the new measures could include scrapping deductions on corporate taxes and increasing VAT on a number of goods and services, as well as cuts to the budgets of the public administration and other tax hikes.

Meanwhile, around 800,000 Spaniards marched against the government’s labour market reforms yesterday. Protests turned violent in Barcelona, with isolated clashes between protesters and the police also taking place in other Spanish cities and more than 170 people being arrested in total. Spanish trade unions warned that protests will intensify if the government does not agree to re-open negotiations over labour market reforms by 1 May.
Le Monde BBC EurActiv Irish Independent El País El País 2 El País 3 Expansión Cinco Días Les Echos Independent Economist Economist 2 Le Figaro: Editorial Le Figaro

Schäuble to lobby for alternative FTT at EU level
Süddeutsche reports that German Finance Minister Wolfgang Schäuble has said that he prepared to push for a fresh proposal for an EU financial transaction tax at tomorrow’s meeting of EU finance ministers which would be modelled on the UK’s stamp duty on share dealing, but widened to include derivatives. During yesterday’s debate in the Bundestag on the eurozone bailouts, the head of the opposition SPD’s parliamentary group Frank -Walter Steinmeier indicated that his party could accept such a compromise in return for its support for ratifying the ‘fiscal treaty’.
FT WSJ Welt Süddeutsche DMN FAZ: Seltzner

The House of Lords Economic Affairs Committee’s report into UK development aid spending recommends that, “The Government should push for a substantial reduction in the European Commission's aid programmes given its focus on the EU's neighbours rather than poorer, low income countries that are in greater need.” The report cites Open Europe’s research on EU aid.
HoL report
Open Europe research

Speaking to Polish MPs yesterday, Foreign Minister Radoslaw Sikorski said that Poland was "disappointed" that the UK does not want to build up joint EU defence capabilities and that pro-EU-defence countries should use the enhanced co-operation clause in the Lisbon Treaty to go ahead without it.

De Standaard reports that Greek fishermen are receiving up to €70 000 in EU funding to destroy their old traditional fishing boats. A spokesperson for EU Fisheries Commissioner Maria Damanaki admitted that current EU rules increase overfishing, as subsidies are used to purchase more efficient boats.

EUobserver reports that MEPs have voted (429 to 184) to put an end to the European Parliament having two seats.

The Spanish government has challenged a claim by Nato that the alliance forwarded a distress call to a nearby Spanish warship that might have saved the lives of 63 African migrants bound for Europe, adrift in the Mediterranean.

Hungarian President Pal Schmitt has been stripped of his doctorate by a University in Hungary, after it was revealed that large chunks of the text had been plagiarised. The opposition has called on him to resign.
Le MondeBBC

In a vote in the European Parliament yesterday, MEPs backed proposals for new regulation on derivatives trading, in a bid to ensure safer trading and greater transparency.
EurActivEuropean Voice

An April Fool’s joke by officials in EU Council President Herman Van Rompuy’s office suggests that the Vatican should be invited to a Eurozone summit because "The presence of His Holiness the Pope affords an opportunity to pray for divine intervention to save the euro. This is now seen as the most credible strategy.” One official is quoted as saying: "I glad someone thinks this is a laughing matter, but it's no joke for us".
FT: Brussels Blog Unofficial press release

The Irish Times reports that low cost airline Ryanair has complained that the EU Commission’s policy of banning its staff from flying on cheap airlines or reimbursing low cost flights is discriminatory.
Irish Times

Bild reports that the EU Commission has written to the German government warning that it faces a €28m fine unless it puts forward a commitment to implementing the EU’s Data Retention Directive within the next three weeks.
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