Open Europe : persoverzicht

[Politics.be]

Germany and France agree to remove pressure for private sector losses under future bailouts;S&P warns 15 eurozone countries that a downgrade may be imminentGerman Chancellor Angela Merkel and French President Nicolas Sarkozy yesterday unveiled their joint proposals for eurozone fiscal integration. The plans include: automatic sanctions for countries that break the 3% deficit rule; allowing the European Court of Justice to rule on whether the fiscal rules are being properly implemented by national law, but not passing judgements on national budgets; bringing forward the introduction of the European Stability Mechanism (ESM), the eurozone’s permanent bailout fund, to 2012 and agreeing to reword the ESM structure so that it does not force losses on private bondholders. To achieve these changes the leaders will seek a Treaty change involving all 27 member states, however, if that is not possible they will be enforced with a smaller Treaty involving the 17 eurozone members and any other member states that wish to join.

In an interview with Die Welt, European Commission President José Manuel Barroso said that, depending on the specific nature of any Treaty change, it could be implemented within four to five months. Markets responded positively to the plan with the borrowing costs for Italy and Spain both falling significantly. Le Figaro reports that IMF Managing Director Christine Lagarde welcomed the Franco-German agreement, although she warned that it was “insufficient in itself, and much more will be needed” for the eurozone to regain the markets’ confidence.

The positive sentiment did not last for long, as Standard & Poor’s last night put 15 eurozone member states onto negative credit watch, a move which normally means that there is a 50% chance of a credit rating downgrade within 90 days. S&P suggested that all non-AAA rated countries and France could be subject to a two notch downgrade, depending on the outcome of this week’s summit. S&P said the move was "prompted by belief that systemic stresses in the euro zone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the euro zone as a whole."

The IMF yesterday agreed to immediately release the next tranche of bailout funds to Greece. Separately, Antonis Samaras, leader of the Greek New Democracy party, said that he expects the recession in Greece to be deeper than forecast this year and to continue for longer than predicted. The ECB purchased €3.66bn in government bonds last week, less than half of the previous week. The FT reports that over the course of ten days Belgium was able to sell €5.7bn in debt to its citizens, raising 30 times the predicted amount.

Open Europe’s Raoul Ruparel was quoted in the Times and Telegraph, on the Telegraph’s live blog and by Business Insider discussing the eurozone crisis and the Merkel-Sarkozy meeting. Open Europe’s Pieter Cleppe appeared on Polish TV Polsat discussing the future of the eurozone and the EU. Open Europe’s Pawel Swidlicki is quoted by Channel 4 News saying that, even with automatic sanctions, the deficit limits in the eurozone could become “mired in political wrangling between the EU and member states, especially if one of the larger countries, say France, is in violation of the rules.”
Open Europe blog FT CityAM WSJ EUobserver IHT Irish Times Irish Independent Le Figaro Le Monde blogs: Leparmentier La Tribune La Stampa EurActiv European Voice BBC Guardian Welt Bild Süddeutsche FTD FAZ Handelsblatt Bild 2 Süddeutsche 2 FAZ 2 Süddeutsche 3 Welt 2 FTD 2 FT 2 IHT 2 Irish Times 2 Le Figaro 2 EUobserver 2 FT 3 FT Alphaville FT 4 WSJ 2 European Voice 2 Guardian BBC 2 Mail Telegraph Telegraph 2 Telegraph 3 Welt 3 Le Figaro 3 IHT 3 Irish Independent 2 Irish Times 3 Irish Independent 3 FT 6 WSJ 4 FT 7 WSJ 5 EUobserver 3 Il Sole 24 Ore Business Insider Times Channel 4 News Welt Welt: Barroso Times

Chris Howarth: Cameron needs to show resolve to “secure vital UK interest” in financial services;
No 10 rules out referendum on proposed Treaty change
On Conservative Home, Open Europe’s Christopher Howarth argues that the UK’s financial services exports are vital to the UK economy and that David Cameron needs to show a “sense of purpose and resolve to secure a vital UK interest” in negotiations on EU Treaty changes at this week’s summit. The BBC cites Open Europe’s new report, “Continental Shift”, published yesterday, which argues that the UK is increasingly losing influence over EU financial regulation and that the UK must seek safeguards as the eurozone “pushes its own agenda.” The Evening Standard quoted Open Europe Director Mats Persson saying, “There's a growing divergence between the UK's economic interests and the slew of regulations coming from Europe.”

An editorial in the FT argues that the rising tide of EU regulation is “a worry” and that “some rules that Brussels has introduced since the crisis have been unnecessarily intrusive.” However, with regard to Open Europe’s proposal for a UK “emergency brake” on EU financial regulation, the paper argues, “It would be hard to justify such a large expenditure of political capital to offset a regulatory risk when the scale of the threat remains unclear…The UK may need to review is relationship with the EU, but that time is not now.”

On Conservative Home, Anthony Browne writes that Open Europe’s report makes a “compelling case for the government to spend what political capital it has in the EU defending the City.” He concludes that, “Of course, getting any protection for financial services – or repatriating any powers – depends on their being treaty negotiations at the level of the EU 27…So in fact, it is in our interest to quietly support the cause of treaty renegotiations.” Andrew Lilico of Europe Economics, which provided analysis for Open Europe and an accompanying report, features the two reports on his Telegraph blog. The research was also featured by the Mail, Politics.co.uk, and the Times’ live blog.

Meanwhile, Downing Street has ruled out a referendum on the Franco-German plans for Treaty change, stating that it would not represent a transfer of sovereignty from the UK to the EU. The Telegraph and Mail both argue in editorials that the Treaty changes should be subject to a referendum. The Telegraph states, “It is, at the very least, an odd negotiating strategy for Mr Cameron to throw away the strongest card in his hand before the game has even started. A bigger problem is that the British people have not been told where their Prime Minister thinks the country’s interests lie, or how he proposes to pursue them. Before he heads to Brussels, perhaps he can enlighten us.”
Open Europe research: Continental Shift Conservative Home: Howarth FT Telegraph: Editorial FT: Editorial Telegraph: Martin FT: Johnson Express Guardian Mirror Times Times 2 Mail Sun BBC Evening Standard Politics.co.uk Telegraph: Live blog Times: Live blog Telegraph blogs: Lilico FT: Stephens Conservative Home: Browne

Italian government’s new economic measures get lukewarm welcome in parliament
Italian Prime Minister Mario Monti yesterday presented the new package of austerity measures and economic reforms adopted by his cabinet to both houses of the Italian parliament. Former Italian Prime Minister Silvio Berlusconi said that the government’s proposals “include several measures we do not agree with,” and suggested that the entire package be put to a vote of confidence. Pier Luigi Bersani, the leader of Italy’s main centre-left party, said that the proposed reform of the pension system must be made “more gradual”. Meanwhile, Italy’s main trade unions have called a general strike of between two and four hours for next Monday to protest against the government’s proposed measures.
Repubblica La Stampa Il Messaggero FT WSJ EurActiv Telegraph FT: Editorial

Eurozone comment round-up
In the Irish Times, European Politics Professor Brigid Laffan argues that Ireland needs to be cautious in agreeing to any EU Treaty change, arguing, “Inevitably, France will try to use this opportunity to put corporation tax on the agenda. This can be handled with relative ease but should not become the sole focus of Irish attention. Ireland is not without negotiating power going into these discussions, particularly given the requirement to have a referendum on any significant Treaty change. It may be possible to link Treaty change to the sustainability of the Irish debt. It is an opportunity that should not be lost.”

An editorial on Le Figaro’s front page notes, “There’s no doubt that will need to go ahead at 17 and not at 27, although non-euro member states will be allowed to join if they wish to. In times of crisis, pragmatism prevails over fears of a two-speed Europe.” A leader in FT Deutschland argues that the Franco-German proposals are a good basis for discussion, and that “the message directed at Britain could not have been clearer: are not afraid of dividing Europe up into different weight categories.”
FT: Beattie FT: Rajan WSJ Ahead of the Tape WSJ Review&Outlook WSJ Review&Outlook 2 Irish Times: Beesley Irish Times: Laffan Le Figaro: Editorial Les Echos: Barré Les Echos: Rachline BBC: Peston Guardian: Barysch BBC: Flanders BBC: Hewitt Economist: Charlemagne Mail: Hastings Mail: Leader Times: Boyes Times: Fleming Telegraph: Reece Telegraph: Warner Welt: Wegrin FTD: Leader

On Conservative Home, Andrew Bridgen MP cites research from Open Europe’s ‘Still out of control’ report showing that EU Directives accounted for 94% of the cost of UK health and safety laws introduced between 1998 and 2009.
Open Europe research Conservative Home: Bridgen

A new Skop poll shows that 88% of Swedes are opposed to their country joining the euro, reports HBL.
HBL

EUobserver reports that EU ministers yesterday failed to reach an agreement over the seat and the funding of a new unified litigation court for the upcoming EU patent, with London, Paris and Munich in line to host the tribunal.
EUobserver

The Express reports that the European Commission yesterday threatened to impose fines on the UK Government for its refusal to automatically grant certain welfare benefits to citizens of other EU member states.
Express Express: Editorial

The Sun reports that the last Labour Government spent nearly £5m on preparations to join the euro under the guise of the Euro Preparations Unit it set up shortly after taking power in 1997.
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Bron: politics.be