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Greece unlikely to receive next tranche of bailout funds at next Eurogroup meeting

09 Nov 2012

Kathimerini reports that, despite looking likely to pass the latest round of economic reforms and budget cuts, Greece will not get approval for the release of the next tranche of bailout funds at Monday’s meeting of eurozone finance ministers. This is due to differences between the IMF and the eurozone over Greece’s debt sustainability, but also on-going brinksmanship between the ECB and the eurozone over who should provide additional funding to Greece. In his monthly press conference yesterday ECB President Mario Draghi highlighted this divide, saying that the ECB is “by and large done” in terms of helping Greece. Separately, the Greek unemployment rate in August 2012 reached 25.4% up from 18.4% a year earlier.

Writing in City AM Open Europe’s Raoul Ruparel argues, “a larger decision on Greece’s position in the eurozone is closing in on EU leaders…However the funding is found, it will likely involve breaking a taboo – either by the European Central Bank helping to fund states, or more likely by Eurozone countries allowing permanent transfers to a country whose future funding is far from assured.”
Kathimerini FT 2 Kathimerini 2 Kathimerini 3 WSJ WSJ 2 Kathimerini 4 FT 3 WSJ 3 FT Editorial Kathimerini 5 CityAM: Ruparel WSJ Review & Outlook Telegraph Irish Times European Voice EUobserver Expansión Economist: Leader Economist

Cameron to try to build an alliance on freezing the EU’s 2014-2020 budget
Ahead of the EU leaders’ summit on the EU’s long term budget later this month, David Cameron will travel around Europe in order to rally support for the UK’s position of a real terms freeze after Wednesday’s talks with Angela Merkel on the issue ended in deadlock. The Times reports he will talk to his counterparts in Netherlands, Sweden, Finland and Denmark, while the Independent notes that he may also try to win support from Spain and Italy. FAZ reports that Italy and France have agreed to focus on cutting the UK’s rebate during the budget negotiations.

Meanwhile, a new YouGov poll cited by the Telegraph shows that 49% of UK voters would vote to leave the EU, 28% would vote to stay in, with 17% undecided. In Germany, 57% would vote to stay in with 25% voting to leave. The Times reports that Cameron is under growing pressure from Conservative MPs to make an explicit pledge that a future referendum would give voters the chance to leave the EU. George Eustice MP said “Having done a successful negotiation, I have no doubt that it would be quite easy to win a referendum in terms of staying in,” adding, “There’s got to be proper consequences to referendums otherwise they don’t really work.”
Telegraph Independent Sun Welt FAZ Express: Forsyth Mail: Hannan Conservative Home: Barrett

In the WSJ, Stephen Fidler cites Open Europe’s ‘Trading Places’ report which assessed the Norwegian, Swiss and Turkish alternatives to EU membership and concluded that Britain should seek to negotiate “a pick-and-mix approach” to EU policy areas.
WSJ Brussels Beat Open Europe research: Trading Places

The electoral campaign in Catalonia kicked off yesterday. According to the latest opinion polls, Catalan President Artur Mas’s nationalist CiU party is set to win the elections – but he may or may not secure an absolute majority in the Catalan parliament.
El País El País 2 El País 3 El Mundo El Mundo 2

The ECB’s Governing Council yesterday decided to keep the key interest rates unchanged. After the meeting, ECB President Mario Draghi told the press that the eurozone’s economic outlook remains weak.
IHT FT FT 2 City AM European Voice Euractiv

The FT reports that, according to UK diplomats, no serious compromise to prevent non-euro countries being outvoted by the eurozone voting as a bloc within the EU-27 banking regulator – the European Banking Authority – has been discussed since the 18-19 October EU summit.
FT Open Europe research: EBA safeguards

France and Belgium have agreed to inject €5.5bn of fresh capital into bailed-out bank Dexia. Belgium will put in 53% of the amount, with France providing the rest, City AM reports.
FT Times City AM

According to a source quoted by EUobserver, bailout talks between the Cypriot government and the EU/IMF/ECB Troika are expected to wrap up by Monday at the earliest or by the end of next week at the latest.

In a new report the financial services trade group TheCityUK concludes that “In many ways, London’s pre-eminence as a global financial centre rests upon its participation in the European Union and access to the Single Market” but that EU membership is “not regarded as an unalloyed competitive advantage.”
City UK press release Open Europe research: EBA Open Europe research: Continental Shift

Reuters reports that German exports fell by 3.4% in September, hit by declining demand among the crisis hit eurozone countries.
Reuters Süddeutsche DWN

In a letter to the Telegraph, Ronald Stewart-Brown, Director of the Trade Policy Research Centre, argues for a “radically reformed EU with countries like Britain recovering control over most areas of their government.”
Telegraph: Letters

EU trade unions yesterday took the first in series of rolling one-day strikes in protest at demands by David Cameron, and other EU leaders, for European spending cuts. De Morgen reports that, according to the trade unions, between 20% and 30% of officials took part.
Telegraph De Morgen

Polish Prime Minister Donald Tusk announced this morning that the Polish Cabinet would accept the fiscal treaty on eurozone governance and submit it to Parliament for ratification.
Gazeta Wyborcza

The EU has agreed to lower its tariffs on banana imports from ten Latin American countries in exchange for them dropping their ten year-long complaint at the WTO.
Le Monde EUbusiness

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