Open Europe : persoverzicht

[Politics.be]

Eurozone leaders split over revision of second Greek bailout;Bild: German government privately expects a Greek default by DecemberThe FT reports that, according to senior European officials, splits are opening up between eurozone leaders over whether to revise the second Greek bailout package. Germany and the Netherlands, along with up to five other eurozone members, are leading the calls for bondholders to take bigger write downs on their holdings of Greek debt, while France and the ECB are fiercely resisting such a move. The news is likely to dampen the recent market rally in Europe, especially for European banks. Reuters reports on concerns that the completion of the EU/IMF/ECB review mission in Greece will reveal higher funding needs than estimated under the second Greek bailout plan. German Chancellor Angela Merkel said to Greek state TV NET, "We have to wait and see what the troika...finds and what it will tell us [whether] we will have to renegotiate or not." Bild reports that the German government privately expects a Greek default by December. According to an unnamed source, Merkel told CDU MPs in a meeting recently, "We are trying to avoid a Greek insolvency. I can however not exclude this any longer.”

The Greek parliament yesterday voted to approve the new property tax aimed at raising an extra €2bn a year, although reports suggest the vote sparked riots in Athens. The move will allow the EU/IMF/ECB review mission to return to Greece today, with a final decision on whether to release the next tranche of Greek bailout funds not expected until mid-October.


Meanwhile, the Bundestag will vote to approve the expanded EFSF tomorrow and although the proposal should pass with opposition support, it is still unsure whether Merkel will gain the majority support from her governing coalition which she has demanded. The coalition can stand to lose up 19 votes and still maintain a majority, however, with the number of junior coalition FDP MPs planning to abstain or vote no still uncertain, the outcome is yet to be assured. Handelsblatt reports that the Slovakian parliament vote on the expanded EFSF may be delayed until 22 October or later, and is not guaranteed to pass, with the parties again failing to reach a compromise on the topic last night. Finland will vote on the issue today, and is expected to approve the proposal, while Slovenia passed the plan yesterday.


Debate continued over the state of an increased eurozone bailout fund, with a clear proposal yet to emerge. French Finance Minister Francois Baroin said, “It is out of the question to put forward, three days from the Bundestag vote, the issue of whether we should increase the fund…Let’s not open Pandora’s box on something that is a red flag for Germany.” German Finance Minister Wolfgang Schaeuble also termed proposals to increase the fund or even leverage it as “stupid”, according to the Telegraph.


On Dutch blog De Dagelijkse Standaard, Open Europe's Pieter Cleppe discusses the trade-off between keeping the monetary union together or breaking it up, arguing, "One difference is all too clear: the cost of a break up, as high as it may be, will be a one-off cost, while the cost of keeping it together, through sharing wealth, is more or less permanent."
FT FTD CityAM Guardian Reuters FT 2 CityAM 2 Telegraph WSJ 2 European Voice NY Times Irish Times Irish Times Telegraph Irish Times BBC El Pa�*s 2 Independent BBC 2 FT 4 CityAM 4 WSJ Guardian Irish Independent NY Times FAZ FAZ 2 Handelsblatt Le Monde Le Parisien Le Figaro Reuters France Irish Times FT 3 CityAM 3 Repubblica FT 5 EUobserver Independent 2 Le Figaro El Pa�*s Times Times 2 Reuters Il Sole 24 Ore Corriere della Sera: Trichet Bild FAZ SZ Zeit YLE YLE 2 Elsevier Handelsblatt Libération Handelsblatt Les Echos Standaard Le Point Reuters France Les Echos Le Figaro CityAM 5 WSJ 3 FAZ Slovak Spectator Sme Le Point Dow Jones Handelsblatt Europolitics ORF Welt Times 3 De Dagelijkse Standaard: Cleppe


Barroso: Commission would support treaty change to speed up integration;

Barroso calls for pooling of debt at the eurozone level
President of the European Commission, José Manuel Barroso, delivered his annual ‘State of the Union’ address to the European Parliament this morning in which he said the EU faced the biggest challenges in its history. He insisted that: "Greece is, and will remain, a member of the euro area", argued that monetary union needed to be completed with an economic union, and announced that the Commission will present proposals for a "single, coherent framework to deepen economic co-ordination and integration, in particular in the euro area" in the coming weeks.


Barroso rebuked eurozone nations for delaying the ratification of the expanded eurozone bailout fund (EFSF), arguing that "the pace of our joint endeavour cannot be dictated by the slowest”, and that the Commission was willing to envisage Treaty changes to reinforce the credibility of its decisions, specifically to remove “the constraint of unanimity”. He also argued for the introduction of joint debt, in the form of “stability bonds” which would ensure both integration and discipline, saying, “Once the euro area is fully equipped with the instruments necessary to ensure both integration and discipline, the issuance of joint debt will be seen as a natural and advantageous step for all…Some of these options can be implemented within the current Treaty , whereas fully fledged 'Eurobonds' would require Treaty change.”


Barroso also called for the introduction of a Financial Transaction Tax (FTT) in the EU and between the EU and third countries, arguing that it is “only fair to tax financial activities”, given that taxpayers had contributed €4.6 trillion to stabilise the financial sector during the crisis. Barroso claimed the tax would bring in revenues of €55bn, although the FT reports that the Commission’s own study had found that the tax could potentially dent long-term economic growth in the region by between 0.53% and 1.76% of GDP.


Barroso also called for more integration between EU member states, including greater political union and more pooling of efforts in the defence sector, and urged national governments across the EU "to show a bit more pride in Europe…I want to see and hear that pride in being European".
BBC FT FT: Plender Telegraph Welt Handelsblatt ARD Le Figaro Il Sole 24 Ore La Stampa Europa PR


Eurozone comment round-up
In City AM, Juliet Samuel argues, “Markets and euro politicians are tying themselves in knots over one very simple problem: how to convert junk bonds into triple-A rated bonds…Whatever the details, the aim is the same: Brussels wants to underwrite Greek debt with German cash – all without letting the voters know.” In Le Monde, French economists Augustin Landier and David Thesmar argue that in order for Eurobonds to be introduced, “a European institution under German domination will have to be able to veto budgets deemed as deviant, against the opinion of national parliaments…Now, voters are opposed to this big step towards federalism, and politicians know it. The road to Eurobonds is therefore sci-fi: it leads to stalemate.”


On the WSJ’s Real Time Brussels blog, Stephen Fidler notes, “It appears that the only way to bulk up the EFSF convincingly through leverage is for it to gain access to ECB funding, directly or indirectly. That leads to the question now being asked by some analysts in Brussels: Why, if the expansion of the EFSF depends entirely on the ECB’s balance sheet, wouldn’t it make more sense for that balance sheet be used to buy government bonds directly, cutting out the middle man?” In the Irish Independent, David McWilliams argues, “Expect the Greeks to be allowed to default in some form in the next few days…if Greece can default on its debts, why not the Irish banks on their bondholders?…This would save us tens of billions of euro. After all, the ECB is on the hook in Greece, and it is also on the hook here. What is good for the Grecian goose must also be good for the Celtic gander.”


On his BBC blog, Paul Mason notes, “Internally, the euro is the one major currency that has no strategy to save itself or defend itself. Internally, the idea of expanding the EFSF through leverage, had to be pushed by the US and IMF. It was not thought up in Berlin and it will be resisted in Berlin. Externally, the eurozone also has no strategy. It does not and cannot respond to the Swiss move, or to American QE.” In the FT, the leader of Liberal MEPs Guy Verhofstadt writes, “It is time to consider the merger of the functions of the Presidents of the Commission and European Council…Once the euro is back to full health, there should be a single representation of the eurozone in international financial institutions.”
FT Editorial FT: Bremner FT: Wolf FT: Verhofstadt CityAM: Samuel WSJ: Fidler WSJ Review&Outlook WSJ Heard on the Street Guardian: Jenkins Irish Independent: McWilliams Irish Times: Beesley BBC: Mason Independent: Patterson Le Monde: Landier & Thesmar FAZ: Rueb


De Telegraaf reports that Dutch Europe Minister Ben Knapen has told Dutch MPs that he will campaign to ensure that EU agricultural subsidies are only provided to active farmers. The article cites Open Europe's finding that Swedish King Carl Gustav XVI received €1.6m in EU farm subsidies over five years.
Telegraaf Open Europe research


The Telegraph reports that MEPs are planning to spend £26m on bigger offices that will only be occupied during the eleven annual four-day plenary sessions held at the European Parliament's second seat in Strasbourg.
Telegraph


Writing in City AM, Ian Powell, Chairman and Senior Partner at PwC UK, argues that the European Commission’s plans to shake up the auditing industry could “create severe disruption and undermine quality and confidence”, and calls for more input from UK firms in shaping the proposals.
City AM WSJ European Voice EurActiv City AM: Powell FT Editorial


Bloomberg reports that the European Parliament has voted to grant the Palestinian Authority direct duty-free and quota-free access to the EU market for farm and fisheries goods from the West Bank and Gaza Strip.
Bloomberg Public Service Europe El Mundo EUobserver


Yesterday’s Evening Standard reported that Labour leader Ed Miliband is being pressured by backbench Labour MPs to back a “game changing” referendum on Britain's EU membership as a way of splitting the Coalition Government.
Evening Standard


The European Commission has called for a ban on cod fishing for the whole of next year off the west coast of Scotland and in the Irish Sea, in an attempt to replenish stocks. Richard Benyon, the Fisheries Minister, said, “Today's proposals make clear the urgent need to radically reform the Common Fisheries Policy.”
Independent


Writing in EUobserver, Roland Vaubel, Professor of Economics at the University of Mannheim in Germany, highlights that a recent study has found that at least 39% of EU Commissioners “become representatives of some private interests after leaving the European Commission”, joining either a “company or an interest group association or a consulting business of their own.”
EUobserver


The European Parliament has this morning given the green light to the set of six pieces of legislation strengthening economic governance in the eurozone and the EU, the so-called ‘six-pack’.
EP press release






Bron: politics.be