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Bundesbank questions ECB bond buying and recent bailouts;Moody’s: Disagreement over Greco-Finnish collateral deal could derail Greek bailoutThe ECB purchased €14.3bn in bonds last week, down from €22bn in the previous week, with most purchases thought to be Italian and Spanish bonds, bringing the total bought to €110.5bn. In its August bulletin the Bundesbank criticised the purchases, suggesting that the increasing cost of borrowing in Italy and Spain “in no way” amounted to an unsustainable burden, suggesting that the ECB’s decision to purchase bonds was premature, according to the FT.

The Bundesbank went on to criticise the second Greek bailout saying, “Unless and until a fundamental change of regime occurs involving an extensive surrender of national fiscal sovereignty, it is imperative that the no bail-out rule that is still enshrined in the treaties and the associated disciplining function of the capital markets be strengthened, and not fatally weakened.”

FTD reports that, following a meeting of the CDU leadership yesterday, CDU General Secretary Hermann Gröhe announced that the CDU leadership unanimously agreed to oppose Eurobonds, and the front page of Handelsblatt suggests that German Chancellor Angela Merkel is getting more isolated over Eurobonds at the EU level. Reports also suggest the FDP have threatened to bring down the governing coalition if the government decides in favour of Eurobonds.

The disagreement in the eurozone over the Greco-Finnish collateral deal, which sees Greece provide cash as collateral for Finnish bailout loans but not for those from other countries, threatened to re-open the bailout debate yesterday, with Moody’s warning that, “The pursuit of such agreements could delay the next tranche of financial support for Greece and so precipitate a payment default.” Yle reports that Finnish Prime Minister Jyrki Katainen said yesterday that Finland will not take part in the second loan package if other Eurozone countries block the collateral agreement, however FD suggests that Finland is prepared to change the deal.

Italian PM Silvio Berlusconi’s party is at odds with its main ally the Lega Nord party over its latest austerity package, with the two parties unable to agree on pension reform or cuts to transfers to regions. The package will be examined by the Senate’s Budget Committee from today and will pass to the Senate for debate in two weeks.
FT EurActiv Bloomberg EUobserver FT 2 WSJ FT 3 Telegraph WSJ 2 FT 4 CityAM CityAM 2 WSJ 3 WSJ 4 Irish Times Irish Times: O'Brien Il Sole 24 Ore Telegraph 2 Irish Times 2 Les Echos Handelsblatt NYT CityAM 3 Irish Times 3 IHT El Pais El Pais 2 El Pais 3 Bloomberg El Pais 4 El Pais 5 El Pais 6 Irish Independent Irish Independent 2 Irish Independent 3 Irish Independent 4 Repubblica Repubblica 2 Les Echos 2 Spiegel Expansion Expansion 2 Jornal de Negocios Volkskrant FD Blikopdebeurs Geenstijl.nl De Dagelijkse Standaard NRC Nieuwsbank Letter de Jager FAZ Bundesbank Monthly Report Handelsblatt Paavo Väyrynen YLE TS FD

Political Editor of Spiegel argues for a “European referendum”
Roland Nelles, the Political Editor of Spiegel, argues that “Europeans need a European referendum. It would ask the question: Should we roll back the European Union, or do we dare to choose more Europe?...Now is the moment to decide. Such a referendum would finally spark a widespread debate.” He adds, “We have to get away from the economist-dominated debate and into a political discussion. Anyone who agrees with a common currency, or even speaks of a transfer union, should take the next step and bring up clear political unity. Anything else is beating around the bush.”
Spiegel: Nelles

Vincenzo Scarpetta: Italy may have to plan for a future outside the eurozone without radical economic reform
In a comment piece on EUobserver, Open Europe’s Vincenzo Scarpetta discusses some of the changes that need to happen in order for Italy to get out of the current economic and political crisis, including a change of leadership, a radical opening of the labour market and a reduction of the tax burden on SMEs. He warns, “Italy now has one, possibly final, chance to push for radical economic reform and break its chronic growth problem. Failing this, Silvio Berlusconi & Co. may have to plan for a future outside the single currency.” He concludes, “Both Italy and Europe need to be fully aware of the consequences of Rome failing to deliver deep-rooted and necessary change.”

Writing in Dutch paper De Volkskrant, Dutch historian René Cuperus calls the euro "the suicide pill of Europe", arguing, "who-ever thinks to make from Europe a project of accounting discipline, whereby Southern European countries are being humiliated as monetary colonies and Triple-A people are being over-demanded through a false appeal on solidarity, is living in a technocratic utopia." He concludes: "It is time for a plan B - European cooperation without the euro." In Die Welt, German authorGünther Lachmann argues that "Merkel and Sarkozy are governors without people. They want a political euro-union. But the people of Europe want to renew democracy."
EUobserver: Scarpetta Welt: Lachmann Volkskrant: Cuperus IHT: Ockrent IHT: Barkin WSJ: Hannon FT Editorial

EU hopes to send funds to Libya "as soon as possible" to support democratic transition
As the conflict in Libya appears to be close to an end, EU spokesperson for the EEAS Michael Mann said, "We would hope that we can launch our assistance as soon as possible".

In an op-ed in Le Monde, Bastien Nivet of the Paris-based IRIS think-tank notes, “Paris is about to succeed in the incredible challenge of reducing the ambitions and the interests of the European Security and Defence Policy at a pace and with an effectiveness that not even the most eurosceptic Britons would have dreamed of…Paris now seems to have come to a decision: what is ambitious will be done with the Britons outside of the EU framework, what is not will be done with them as well, within the EU framework.” He warns that a number of factors combined are making the EU an “Ashtonised actor, which doesn’t keep up with the global strategic changes under way.”
Open Europe research WSJ IHT El Pais EUobserver Independent Le Figaro Les Echos Reuters Italia Le Monde: Nivet

A new Commission report reveals that €83.5mn was paid out through the European Globalisation Adjustment Fund (EGF) in 2010 to 23,700 workers, who lost their jobs, in nine member states - Denmark, Germany, Ireland, Lithuania, Netherlands, Poland, Portugal, Slovenia, Spain.
European Commission press release El Pais

Member states seeking to reimpose internal borders within the Schengen area will have to obtain permission from Brussels for any period longer than five days, under a draft proposed by the Commission, reports the FT. The proposal is likely to meet with resistance from member states such as France who were pushing for a loosening of Schengen rules.
FT

Le Monde reports on a study by three French political scientists showing that French President Nicolas Sarkozy lags behind both the most likely Socialist candidates for next year’s Presidential elections, François Hollande and Martine Aubry. According to the study, Sarkozy can count on a ‘potential electorate’ of only 22%, with Hollande and Aubry both at more than one third of support.
Le Monde

Reuters reports that EU member states will in the next few weeks discuss a plan to extend the life of the 1997 Kyoto protocol on climate change, on condition that it would expire in 2018 and be replaced with a global agreement involving capping all major countries’ emissions.
Reuters

UK

The Guardian reports that David Cameron has refused to meet a local delegation of business leaders and town councilors, saying that he does not intend to reverse the decision to award a £1.4bn contract to build 1,200 carriages for the London Thameslink route to Germany’s Siemens. The contract is set to cost more than 1,400 jobs at train manufacturer Bombardier’s Derby plant.
Guardian

Bron: politics.be