Open Europe : Cut through the chatter

[Politics.be]

ECB considers €50bn in sovereign debt purchases per monthLeaked reports from unnamed officials suggested last night that the ECB is considering unveiling a Quantitative Easing (QE) programme at its meeting today involving €50bn purchases of sovereign debt per month. The programme would run for at least a year, and possibly for two. However, officials stressed the final decision has still not been taken. Open Europe’s report looking at the effectiveness of QE and the shares which could be purchased is cited by EUobserver and Jornal de Negócios.

In an interview with Handelsblatt, Greek Finance Minister Gikas Hardouvelis said, “I hope that Greece will not be excluded as no country needs Quantitative Easing as much as Greece.” Italian Prime Minister Matteo Renzi, speaking in Davos, said the ECB could “help Europe give a message of a new economic direction,” adding that his “dream is parity,” between the euro and the dollar exchange rate. French Finance Minister Michel Sapin told France Info this morning, “The Germans taught us to respect the independence of the ECB. They need to remember that themselves.”

However, De Standaard reports that Belgian Finance Minister Johan Van Overtveldt warned that the ECB should not “silently attack savings”, adding that the problems in the Eurozone are partly down to a lack of trust between citizens and business across the bloc, but QE is unlikely to “bring back trust”. In an interview with CNBC, Dutch Prime Minister Mark Rutte warned that, “The ECB has to play its part, but at the same time it is up to the countries to do what they have to do.”

Source: Handelsblatt France Info De Standaard CNBC EUObserver Jornal de Negócios

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Greek banks prepare to help support Greek state’s short term debt needs
A new poll by Pulse on behalf of Action24 puts SYRIZA on 31% ahead of Sunday’s Greek election – putting it 4% ahead of New Democracy. According to the poll, the percentage of Greeks wanting consensus in talks with the EU/IMF/ECB Troika has risen from 41% on December 6 to 61%. Kathimerini reports that Greek banks have had their request for access to Emergency Liquidity Assistance (ELA) approved by the ECB and will require it to purchase up to a further €5.5bn in short term government debt in the next two months to help finance the government.

Separately, Greek economist Yanis Varoufakis, a parliamentary candidate for SYRIZA, told El Mundo, “We owe our European partners €280bn. Fine: we will issue new bonds worth this amount, with exactly the same repayment schedule that we had agreed – but linked to nominal, not real, GDP growth…These bonds expire in 2038. We will have repaid what we could. What we couldn’t repay, we wouldn’t. It is about making debt repayments conditional on progress in the real economy.”

Source: Kathimerini The Wall Street Journal
EU prisoner transfer agreement “not worth the paper it is written on”
The Times reports that the Government’s plans to deport nearly 2,000 prisoners who are EU nationals back to their home state are in disarray because several EU countries have not ratified the bloc’s prisoner transfer agreement. The nine states that have not ratified the deal are Bulgaria, Estonia, Germany, Greece, the Irish Republic, Lithuania, Portugal, Spain and Sweden, which together account for 1,600 of the more than 4,600 EU nationals in jails in England and Wales. Keith Vaz MP, Chairman of the Commons Home Affairs Select Committee, said, “This EU agreement is not worth the paper it is written on. What is extraordinary is that those countries that have not ratified have not faced any action from the Commission.”

Source: The Times Open Europe Intelligence
German ‘anti-Islamisation’ leader steps down after posing as Hitler
Lutz Bachmann, lead organiser of Germany’s ‘anti-Islamisation’ Pegida movement has stepped down after a photograph of him posing as Adolf Hitler on Facebook – calling immigrants “cattle” and “trash” – went viral, causing furore in Germany. A spokesman for Germany’s anti-euro AfD party said that Bachmann had “embarrassed the people who have been compelled by honest concerns to take to the streets.” Separately, a Pediga march of 15,000 in Leipzig turned violent on Wednesday night – as scuffles broke out amongst it and 20,000 ‘anti-Pediga’ protestors.

Source: Spiegel Süddeutsche Zeitung
Spanish unemployment decreased in 2014, new data show
According to new data released by the Spanish national statistics institute INE this morning, the number of unemployed people in Spain fell by 477,900 in 2014 compared to 2013 – although it increased by 30,100 in the last quarter of the year. The unemployment rate at the end of 2014 was 23.7%, down from 25.73% at the end of 2013. The economically active population – people working or actively looking for a job – decreased by 44,000 last year. According to INE, this is mainly due to ageing population.

Source: El Pa�*s El Mundo INE
Portugal to follow Ireland’s lead and repay IMF loans early
The Portuguese government has announced that it will repay its IMF loans early, as Ireland did, in order to take advantage of decreasing market borrowing costs.

Source: The Wall Street Journal
Berlin talks yield agreement on demarcation line in Eastern Ukraine
German Foreign Minister Frank-Walter Steinmeier claimed that following yesterday’s four-way summit between Germany, France, Ukraine and Russia, an agreement was reached that “the demarcation line mentioned in the Minsk protocol will be the line from which the withdrawal of heavy weaponry should start now.” Speaking in Davos, Ukrainian President Petro Poroschenko accused Russia of having more than 9,000 troops in Ukraine including 500 tanks, heavy artillery and armoured personnel carriers.

Source: Reuters Die Welt
Open Europe's need-to-know ahead of today’s crucial ECB meeting

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Ahead of today’s crucial ECB meeting, where the central bank is expected to unveil a significant bond purchase programme, Open Europe has produced a series of analyses to help explain what the impact of such a decision could be. A new briefing looks at the effectiveness of the plans, warning that – due to a differing economic structure and being at a different point in the economic cycle – such a QE programme could be less effective in the Eurozone than it has been elsewhere. Open Europe has also produced a number of blogs on the issue including one examining the implication of the programme being the primary responsibility of National Central Banks rather than the ECB as well as one breaking down the effect of the recent opinion from a European Court of Justice Advocate General on the ECB proposals.

Bron: politics.be