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Dutch PM resigns after talks to bring deficit in line with EU rules collapse

23 Apr 2012

Dutch Prime Minister Mark Rutte has offered his resignation this morning, after talks over new budget cuts to bring Dutch deficit in line with EU rules broke down on Saturday. After more than seven weeks of negotiations, far-right PVV party led by Geert Wilders withdrew its support for the significant budget cuts, many of which demanded by the EU, and for the minority government itself. Wilders said, “We will not accept having our people bleed at the hands of bureaucrats in Brussels,” adding that the election will be about Europe and the euro.

Early elections may take place after the summer recess, around September. A snap poll by Maurice de Hond released on Sunday showed Wilders’ support steady at 14%. A leader in Handelsblatt notes that “for Germany, new [Dutch] elections bring along further insecurity at the European level”, noting that if Wilders gains greater influence it could become harder for the new government to ratify and implement the ESM treaty and the fiscal compact.
Reuters EUobserver Reuters Dutchnews.nl NOS NRC Volkskrant leader Le Figaro EUobserver 2 Expansión FT CityAM WSJ Bloomberg EurActiv Telegraph Welt Handelsblatt leader WSJ Review & Outlook Expansión


New Open Europe briefing: Cost of EU quangos to European taxpayers has risen by 33% over two years, now standing at €2.64bn

Ahead of the EU Commission’s proposal for the 2013 EU Budget, which is expected to call for a 6% increase in spending, Open Europe has published an updated briefing assessing the effectiveness and cost of the EU’s 52 agencies and committees. The total cost to European taxpayers of these bodies now stands at €2.64bn (£2.17bn), up 3.4% from last year and a massive 33.2% compared with 2010, with the UK paying around €362m (£298m) this year, Germany paying €490m and France paying €386m. This comes as Treasury Chief Secretary Danny Alexander has announced that UK government departments will have to find further cuts of 5% in order to set-aside funds for contingencies.

Open Europe has identified at least ten agencies that serve no unique purpose and ought to be abolished. Most of the remaining should but cut by 30%, saving EU member states just over €668m (£566.4m) every year, with the UK saving €100.4m (£82.6m), France saving €107.3m and Germany saving €136m.
Open Europe Press Release Open Europe Research: EU quangos

Hollande to face Sarkozy in final run-off after winning first round of French presidential elections;
FAZ: Election results reveal “scary political landscape” in France
Socialist candidate François Hollande won the first round of the French presidential election yesterday with 28.63% of votes, followed by incumbent Nicolas Sarkozy on 27%. The two frontrunners will contest the Presidency in the second round on 6 May. In third position, far-right Front National leader Marine Le Pen won a surprising 18.5% of votes – the party’s highest-ever score. Leftist Front candidate Jean-Luc Mélenchon received 11.13% of votes, followed by centrist candidate Francois Bayrou, on 9.11%. Turnout was higher than expected, on 70%.

Exit polls currently predict that Hollande would win the second round vote with 54%, although the distribution of Le Pen, Mélenchon and Bayrou votes remains a determining factor of the result.  Mélenchon has lent his support to Hollande, calling on his supporters to “mobilise themselves to defeat Nicolas Sarkozy”, a sentiment echoed by Green candidate Eva Joly. An opinion poll published by Le Monde and Le Point suggests that 60% of Le Pen supporters would vote for Sarkozy in the second round, 18% would choose Hollande, and the rest would abstain.

A leader in Deutsche Mittelstands Nachricten describes the results as a “painful defeat” for Merkel’s concept of Europe with both the ‘fiscal treaty’ on budgetary discipline and the ESM treaty potentially at risk.” A leader in FAZ argues that France “reveals a scary political landscape…A third of voters have voted for candidates with a completely alien view of the world, but who have in common one thing: explicitly nationalist, anti-European beliefs.”

An editorial in Spanish business daily Expansión notes, “The victory of one or another candidate would also change the scenario in Spain. Hollande’s victory – and a Europe with ‘Merkhollande’ – would allow Spain to take it easier on its deficit reduction targets. On the contrary, five more years with Nicolas Sarkozy at the Elysée – and ‘Merkozy’ in Europe – would mean further tightening the rope around Spain’s neck.”

Meanwhile, FT Deutschland reports that EU Economic and Monetary Affairs Commissioner Olli Rehn has indirectly warned that France could see its share of EU funds cut if it does not stick to its commitments on deficit reduction, adding, “It's very important that the new [EU] economic rules are being used and deliver results.”
Le Figaro IHT Independent EUobserver Il Sole 24 Ore Corriere della Sera Times FT FT 2 CityAM WSJ BBC Mail EurActiv Irish Independent Telegraph Guardian  Welt Welt 2 Bild Süddeutsche Irish Times Irish Times 2 Le Monde Le Monde 2 Le Monde 3 Le Monde 4  Libération L’Express Le Monde 5 Le Figaro 2 Il Sole 24 Ore FT 3 DMN FTD FAZ leader Sunday Times FT: Rachman CityAM: Heath Times: Leader Times: Fleming Le Figaro: Editorial La Stampa blogs: Zatterin La Stampa: Martinetti Expansión: Editorial La Tribune: Editorial Le Monde blogs: Leparmentier Corriere della Sera: Nava El País Les Echos: Pécresse

UK pledges almost £10bn as IMF almost doubles resources
The IMF agreed over the weekend to boost its resources by $430bn, with the UK agreeing to contribute $15bn (just under £10bn). Chancellor George Osborne was criticised by Conservative party backbenchers over the contribution, although MPs such as George Eustice and Andrea Leadsom, leaders of the Fresh Start group for EU reform, came out in support of the move. Open Europe’s Raoul Ruparel appeared on BBC News and Sky News discussing the implications of the increase in resources and the UK’s contribution.

Reuters reports that IMF Chief Economist Olivier Blanchard has called on Germany to accept Eurobonds and higher inflation as a means of resolving the eurozone crisis, particularly now that the fiscal pact is in place.
FT Weekend Saturday’s Telegraph Saturday’s Times Saturday’s Mail Saturday’s Sun Saturday’s Independent Saturday’s Guardian EUobserver Kathimerini WSJ WSJ 2 Telegraph Guardian Elsevier De Volkskrant: Knot Nu.nl: Knot Reuters Saturday’s Telegraph: Balls Times: Wighton Times: Fleming FT Editorial FT: Harding Irish Times Irish Times Irish Times Saturday’s Mail: Heffer FT: Munchau

ECB exposure to the PIIGS tops €918bn
Reuters’ MacroScope blog covers updated figures by Open Europe which show that the ECB now has a total exposure to the PIIGS countries of €918bn, up from €444bn a year ago. Of this €704bn comes from the ECB’s lending operations to banks in these countries, while €214bn comes from the ECB’s bond purchasing programme. Open Europe’s Raoul Ruparel is quoted saying, “Given the financial state of these countries – and the banks within them – it is clear that the ECB now owns billions of high risk debt.”
Open Europe blog Reuters blogs: MacroScope

The New Democracy party laid out its plans for the Greek economy over the weekend, with leader Antonis Samaras saying, “Our goal is to change everything: the growth model, the way of government, not just one or the other, both,” despite a strict EU/IMF plan for Greece already being in place.

Kathimerini Kathimerini 2 WSJ

The Telegraph reports that the National Association of Pension Funds (NAPF) will warn at a conference tomorrow that the “unbearable” financial burden under Commission plans to revise the EU’s Pensions Funds Directive could lead to the closure of every final salary – or ‘defined benefit’ – scheme.

Telegraph Open Europe research

In the Sun, Trevor Kavanagh writes, “With Europe imploding, Mr Cameron can stand up for Eurosceptics in all parties. Or he can risk letting UKIP deprive him of a last chance to lead a Conservative government in its own right.”
Sun: Kavanagh

Czech ruling coalition agrees to dissolve after junior member is sentenced for bribery
Czech Prime Minister Petr Necas told the press yesterday that the Czech ruling coalition has agreed to dissolve, most likely leading to early elections in June. The decision came after Public Affairs party leader Vit Barta – a junior coalition member – was given an 18-month sentence for bribing party colleagues and some 90,000 people demonstrated against corruption and austerity measures over the weekend.
EUobserver Cesky Noviny Prague Monitor

Bild reports that due to the inability of the Interior and Justice ministries to reach an agreement on implementation of the EU’s Data Retention Directive, the German government will miss the deadline set by the EU and is likely to face infringement proceedings and possibly high fines.
No link

EU Taxation Commissioner Algirdas Šemeta has told Die Zeit that he will not give up on the idea that “derivatives must also be covered by the [EU-wide financial transactions] tax” in order to reach a compromise on the FTT at the EU level.
Zeit CityAM

Saturday’s Guardian reported that two senior UKIP MEPs have repaid more than £37,000 they say they were asked to divert to party workers in the UK by a senior adviser to the party. EU fraud watchdog OLAF concluded, “The discussed payments could be considered illegal indirect party funding.”
Saturday’s Guardian 

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