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Eurozone posts poor growth figures for the end of 2012; Youth unemployment in Greece reaches 62%

14 Feb 2013

Eurostat announced this morning that eurozone GDP fell by 0.6% in the final quarter of last year. The German economy contracted by 0.6%, Italy 0.9% and Portugal a massive 1.8%. Separately, Italy’s national statistics bureau (ISTAT) said the Italian economy shrank by 2.2% last year. The German statistics office suggested that a large contraction in demand for German exports around Europe was to blame for its poor growth.

Meanwhile, Greek statistics agency announced that Greek unemployment reached 27% in November 2012, this compares to the EU/IMF/ECB troika target of 24.4% for the end of 2012. Youth unemployment in Greece eached a massive 61.7% in the same period.
Eurostat FT CityAM Reuters Süddeutsche FAZ DWN BBC Le Monde

French PM: France will miss its deficit target this year;
Le Figaro
editorial: “Welcome to Club Med!”
In an interview with France 3, French Prime Minister Jean-Marc Ayrault has said that France’s public deficit “is not going to be exactly 3% [of GDP] this year…[but] we will not be very far from it.” New figures published by France’s National Statistics Office (INSEE) this morning show that France experienced zero growth last year. However, the EU Economic and Monetary Affairs Commissioner Olli Rehn wrote in a letter to EU finance ministers, “If growth deteriorates unexpectedly, a country may receive extra time to correct its excessive deficit, provided it has delivered the agreed structural fiscal effort.” 

A front page editorial in Le Figaro carries the headline, “Welcome to Club Med!” and notes, “The truth is that France has to blame itself, and no-one else, for its relegation [from the eurozone core]. In today’s Bild, chief political correspondent Nikolaus Blome writes, “Chancellor [Angela Merkel] once said that Germany is able to read every country in the EU the riot act more or less clearly with the exception of one: France. If the euro is not to plunge into a new crisis of confidence, this must change. Now.”    
Le Figaro La Tribune Irish Times Le Figaro: de Capèle Le Figaro: Saint-Etienne Le Figaro 2 EUobserver 

Turkey’s EU Affairs Minister: "it’s time for Europe to think about changing itself, its institutions and its decision-making processes”
In a speech given to an Open Europe and RUSI joint event yesterday, Turkish Minister for EU Affairs and Chief Negotiator of Turkey's EU accession talks Egemen Bagis said, “I’m hoping that the recent statement of my prime minister and [David Cameron] will have an effect to put Europe back in business…it’s time for Europe to think about changing itself, its institutions and its decision-making processes”. The event was covered by Reuters, Euractiv, Kirkan Haber and Gercek Gundem.  

In an editorial the FT argues that “The debate about a multi-tier Europe triggered by the eurozone crisis (as well as noises-off in Britain) should involve Turkish leaders, who think they can more easily slot their country into an outer ring of the EU. It would also be a shame to waste Cyprus’s financial crisis. Is there no leverage there to inject some reason into the wrangle about the island’s future?” Separately EUobserver reports that Germany has welcomed France's move to allow the opening of one more Turkish EU negotiating chapter quoting a government spokesman as saying, “We think it would make sense to look at other chapters too, but it's a complex process.”
Open Europe Video
Open Europe event: Egemen Bagis FT Editorial EUobserver Euractiv Kirikan Haber Gercek Gundem

Sir John Major will back David Cameron's approach to European renegotiation in a speech made at Chatham House this afternoon. He will say that the step is a “gamble which can't be avoided.”
Chatham House

Secretary of State for Defence Philip Hammond has confirmed that that the UK will remain a member of the European Defence Agency (EDA) but that the “case for continued membership remains finely balanced. Overall, I have concluded that for now the UK should remain a member of the EDA with our continuing membership to be reviewed again in late 2013 in light of progress made during the year.”
Hansard: Written Ministerial Statement

EU Economic and Monetary Affairs Commissioner Olli Rehn has rejected the possibility of adjusting the Greek programme over IMF errors in calculating fiscal multipliers, saying the claim amounted to a “fundamental misreading of historical record”.
Kathimerini Kathimerini 2

US hits out at Commission plans for an FTT
A group of US business groups, including the US Chamber of Commerce, has written to the European Commission objecting to plans for a financial transaction tax (FTT) which are expected to be released today. The letter claims the tax overreaches borders, breaks international treaties and amounts to a “unilateral” imposition of a global FTT. A spokeswoman for the US Treasury also warned that the current plans would “harm” US investors, according to the WSJ.

EU and US officials have said they aim to complete talks on free trade agreement within two years. EUobserver reports that French trade minister Nicole Bricq has warned that France would only support a deal that "respects our values, Europe's cultural vision, our agricultural model and which will facilitate progress in ecological and energy matters."
FT CityAM FT 2 FT Editorial Guardian FAZ FAZ 2 Süddeutsche: Piper Telegraph Euractiv European Voice Irish Times BBC EUobserver                                        

In a discussion paper released yesterday, the IMF called on the eurozone to complete its banking union, including a single resolution mechanism and a combined deposit guarantee scheme, while also issuing a stark warning on the risks of complacency.
FT Irish Times   

Mario Monti has for the first time hinted he may be willing to cooperate with the smaller left-wing SEL party, if the latter “adopts a more pro-reformist stance” on issues like great infrastructure projects and labour market reform. 
ll Sole 24 Ore Repubblica FT: D’Alimonte FT

DWN reports that according to a new Market and Media research poll, 63.3% of Icelanders oppose their country’s accession to the EU with only 24.2% in favour.

The Times reports that EU migrants could have their access to benefits, healthcare, housing and legal aid restricted under UK Government plans to deter a possible influx of Bulgarians and Romanians when current EU transitional controls are lifted next year.
Times Independent Mail  

In the Times, the co-CEOs of Goldman Sachs International, Richard Gnodde and Michael Sherwood, write that “Banks won’t disappear from London overnight, but they will over time” if Britain were to leave the EU. “But that does not mean that the EU, with Britain as part of it, does not need to change,” they add.
Times: Gnodde & Sherwood  

The European Commission has proposed a DNA testing campaign to uncover the extent of horse meat contamination within Europe's beef supply. The Irish Times reports that Europol is to co-ordinate criminal investigations into the scandal.
FT WSJ Irish Independent Welt Irish Times CityAM: Oulds & Dodds   

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