ING research suggests one-off effects of eurozone break-up “would dwarf Lehman Brothers collapse”
08 July 2010
A new report from Dutch bank ING, entitled “Quantifying the Unthinkable”, has warned that the break-up of the eurozone “would have effects that dwarf the post Lehman Brothers collapse”. It predicts that a new Greek drachma would crash by 80pc against the new Deutschmark, and the currencies of
However, the analysis also admits that it doesn’t take into account the long-term costs of keeping the eurozone intact, noting “Some argue that the current sovereign debt crisis has exposed EMU as not being what economists would call an optimal currency area. We do not address the potential long-term pros and cons of dismantling EMU here.”
In an interview in Handelsblatt, Dieter Spethman, former Chairman of Thyssen, who has joined four professors in challenging the eurozone bailout at the
Meanwhile, the new German President, Christian Wulff, has asked the EP for understanding of German concerns over calls for financial transfers between EU member states, saying that, as a federal state, Germany has had “mixed experiences” with internal financial transfers.
Telegraph FT Guardian AFP Handelsblatt
EU’s stress tests will largely dodge question on risk of sovereign debt;
Robert Peston: Tests “may sow alarm rather than calm”
The WSJ reports that the EU’s Committee of European Banking Supervisors (CEBS) has said that stress tests will cover 91 banks and 65 percent of the region’s banking assets. However, the FT notes that the CEBS did not reveal the nature of the stress tests for the banks’ sovereign debt holdings, the biggest area of concern for investors.
In the Mail, Alex Brummer comments, “It is somewhat astonishing that three years after the credit crunch only now are European Union regulators conducting the kind of stress tests that
WSJ WSJ: Wheatcroft CityAM EUobserver Guardian Irish Independent Times Telegraph FT EUobserver Mail: Brummer BBC: Peston blog FT: Analysis
MEPs want all three of EU’s new financial supervisors to be based in Frankfurt
The European Parliament voted yesterday on a series of amendments to the Commission’s proposals for the creation of the three new European Supervisory Authorities (ESAs) and of the European Systemic Risk Board (ESRB). However, MEPs deferred the final vote on the legislative resolution in order to buy more time for negotiations with the Council in September. De Standaard reports that the Belgian EU Presidency is resolved to use qualified majority voting to outvote the
European Voice notes that the EP is still holding out for positions that have been rejected by EU finance ministers – for example, on what extra powers ESAs would be given in case a crisis occurs, which institutions would be entitled to determine the existence of an “emergency situation” and how easy it would be for member states to veto the ESAs’ decisions. Stuart Fraser, Policy Director of the City of
FT European Voice De Standaard EP press release WSJ: Real Time Brussels blog
Commission’s proposed pensions shake-up could cost
The Telegraph reports that the European Commission’s Green Paper on pensions, published yesterday, could end up forcing pension schemes to adopt the EU’s so-called Solvency II capital rules that, according to the CBI, would cost firms an additional £500bn in pension contributions. The Green Paper also calls for “A common platform for monitoring all aspects of pension policy and regulation in an integrated manner” as well as a system of “peer review” for member states’ pension systems. The Express quotes Open Europe’s
Mail Telegraph Telegraph: Reece FT Express FT: Brussels blog
The Mail and Telegraph report that the EU has fined
Top Commission official: EU decision-making under
The Parliament reports that Catherine Day, Secretary General of the European Commission, has said that, despite the Lisbon Treaty, the current EU decision-making process was still “too slow”, adding: “We need to fast-track key pieces of legislation”, without elaborating what those were.
MEPs back new bank bonus curbs
MEPs yesterday voted by 625 to 28 in favour of new rules to curb bankers’ bonuses, which will see bankers required to defer 40 to 60 percent of bonuses for three to five years, while half of any immediate bonus must be paid in shares or in other securities linked to the bank’s performance. As a result, bankers will only be able to receive between 20 and 30 percent of any bonus in upfront cash. The legislation calls on national regulators to implement the rules by January 2011, reports the FT. The rules already have the backing of member states – who will likely rubber-stamp them in a meeting of finance ministers next Tuesday. The WSJ reports that EU officials said the rules would apply to banks and investment firms, but not hedge-fund managers, though they would apply to investment firms that manage hedge-fund assets.
The Mail quotes Michael Connarty, former Chair of Parliament’s European Scrutiny Committee, saying: “There has been a call for tougher rules for some time but it should be up to the
FT FT 2 Independent EUobserver BBC EurActiv WSJ Mail El Mundo CityAM Telegraph
EU Data Protection Supervisor: EU-US data sharing agreement does not contain sufficient protection of personal information
Meanwhile, the Irish Times reports that the Irish government has moved to block a Commission initiative allowing the transfer of personal European citizen data to Israel, following the use of eight fake Irish passports by the alleged Israeli assassins of a Hamas operative earlier this year.
Welt Presse Irish Times Open Europe research
Open Europe’s
Commission demands billions more from member states as research project runs over budget
European Voice reports that the Commission is demanding more money from member states to cover the rising costs of the construction of an experimental fusion reactor, ITER. The EU's required financial contribution to ITER's construction is currently estimated at €7.2 billion, compared to an initial estimate of €2.7bn. Member states are insisting that the money be found from elsewhere in the EU budget.
Commissioner wants “European supervisory authority” for oil drilling
Günther Oettinger, EU Commissioner for Energy, has called on member states to forbid any expansion of deep-water oil drilling off their coasts until investigations into the causes of the oil leak in the
EUobserver EurActiv European Voice
Italian news agency Asca reports that yesterday the EU entered into official talks with the Council of
In a debate on the EU’s diplomatic service in the European Parliament yesterday, Conservative MEP Charles Tannock said that, “The British Conservatives are reconciled and ready to engage with the service”, adding that national MPs would need to be involved in the scrutiny of the EEAS and EU defence missions.
The Independent reports that the
Conservative Home notes that Bill Cash, MP for Stone, has been nominated unopposed to chair the House of Commons European Scrutiny Committee.
Iain Dale’s blog suggests that David Cameron last week proposed that current leader of the ECR grouping in the EP Michal Kaminski, and leader of the Conservatives in the EP Timothy Kirkhope share chairmanship of the grouping, without other MEPs in the grouping being consulted, which has caused “uproar” in
Spectator: Coffee House blog Iain Dale's diary
Writing in Dutch newspaper De Pers, journalist Peter Wierenga argues that “We don't need the EU at all…Take
Euractiv reports that the European Parliament has approved the Industrial Emissions Directive (IED), strengthening pollution limits on industrial installations. “The IED is a reasonable compromise," said Nigel Burdett, the Head of Environment at Drax –
Independent EurActiv Rzeczpospolita
The European Commission will next week propose rules to make it easier for non-EU citizens to come and work in the EU as “seasonal workers”.
Les Echos reports that Iveta Radicova will today be appointed as the new Slovakian Prime Minister. Ms. Radicova will head a coalition government formed by four centre-right parties.