September 30, 2010


Press Summary Archive

Fears over Ireland grow as cost of its banking bailout increase to €50bn

30 September 2010

Fears over Ireland’s public finances are continuing with Ernst & Young predicting that the country’s public deficit will remain the highest in the eurozone until 2014 at the earliest, according to the Irish Independent. The news comes as the Irish government has announced that the cost of its banking bail-out will rise to €50 billion, Bloomberg reports.

The Telegraph reports that markets are concerned by the growing number of ECB governors calling for an end to emergency support measures for the eurozone, such as bond purchases and other lending facilities. Hans Redeker from BNP Paribas is quoted saying, “We think there is going to a double-dip recession in eurozone periphery.”

Meanwhile, Le Figaro notes that Moody’s has downgraded Spain’s debt rating and Portugal has announced a new set of austerity measures, while Euractiv reports that the ECB has warned that Europe’s banking sector is still vulnerable to the eurozone’s debt problems. A leader in Le Monde argues, “The eurozone is less unified than one could think. 16 countries are still sharing the same currency, but the markets no longer consider them as part of a single homogeneous space.”
Bloomberg Telegraph Telegraph 2 WSJ Le Monde: Editorial Irish Independent BBC: Peston Irish Times: Beesley Irish Independent 2 BBC: Today Le Figaro 2 Le Figaro AFP Nouvel Observateur Le Monde El Pais Expansion City AM Euractiv City AM 2 Handelsblatt Handelsblatt 2

Barroso declares “sea change” in economic governance of the EU
FT: Eurozone leaders must stomach the idea of sovereign default
There is widespread coverage of the proposals for stronger economic governance unveiled yesterday by EU Commissioner for Economic and Monetary Affairs Olli Rehn. The first set of proposals only envisages financial sanctions for rule-breakers and is restricted to eurozone member states. Fines for countries which persistently fail to meet the Stability and Growth Pact criteria will be “quasi-automatic”, meaning that they could only be blocked by a qualified majority within the Council. Controversially, sanctions could possibly be imposed on countries with trade or current account imbalances.

European Commission President Jose Manuel Barroso said, “The proposals we are making today represent the biggest step forward on economic governance since we adopted the Stability and Growth Pact. Once approved and implemented by the Member States, they will mark a sea change in the way economic governance is dealt with in the European Union, and in particular in the Euro area”.

Meanwhile, in an interview with Euractiv Deutschland, Austrian Chancellor Werner Faymann has voiced his opposition to Treaty changes aimed at strengthening the EU’s economic governance. "Everything that is within the bounds of current legal measures can be used. But all measures that would require Treaty change I find – thinking back to the Lisbon Treaty – hard to imagine in the next two years", he said.

In the WSJ, Richard Barley argues that the Commission's “proposals still represent something of a transfer of power to the Commission – and for that reason alone, some countries may try to water them down.”  A leader in the FT argues, “A well-enforced [Stability and Growth] pact might have stopped Greece’s reckless borrowing sooner, but would not have stopped the problems in Spain and Ireland, which were built up by private financial flows.” It concludes that EU leaders cannot “stomach the idea of eurozone sovereign default. No one wants that, but an open-ended promise of bail-out weakens the force of the best-laid rules.”
Independent  El Pais Euractiv: Faymann Irish Independent Le Figaro BBC European Voice EUobserver Euractiv FT: Leader WSJ WSJ: Analysis Guardian Irish Times FT Handelsblatt: Leader EC press release

France wins German support on AIFM Directive
France has won the backing of Germany in opposing the ‘passport’ provision in the AIFM Directive, which would allow funds and managers outside the EU to obtain pan-EU marketing rights, raising fears that the Directive will take an even more protectionist format than before. Finance ministers will today discuss the proposal with a view to reaching a compromise.
FT City AM Open Europe research Open Europe research 2

The European Commission gives France an ultimatum on Roma but refrains from taking legal action on discrimination
It is widely reported that the European Commission has threatened to launch legal proceedings against France for failing to implement EU rules on freedom of movement. The French government has been given until 15 October to provide evidence that its policies on repatriations of Roma people comply with EU law. Crucially, the Commission has refrained from suing France for discriminating against the ethnic group. However, Le Point reports that EU Justice Commissioner Viviane Reding said yesterday that “this dossier is not closed”, suggesting that there could still be room for a legal action specifically against discrimination. The FT describes the Commission’s decision as “a political victory” for Paris.  
Le Monde Le Point WSJ Mail Guardian Irish Times FT Irish Independent BBC European Voice EUobserver Euractiv AFP Independent IHT El Pais

More than 100,000 marchers converged on Brussels from across the EU to protest against austerity measures yesterday. Open Europe’s Mats Persson appeared on Sky News’ Jeff Randall show yesterday, discussing the protests and European governments’ austerity programmes.
Telegraph Guardian: Leader FT: Brussels blog Mirror Irish Independent BBC BBC: Hewitt EUobserver El Mundo WSJ: Real Time Brussels blog

Head of EU’s food agency accused of conflict of interest over GM foods
Le Monde reports that Hungarian scientist Diana Banati – who chairs the European Food Safety Authority (EFSA) – has been accused of a conflict of interest. While the EFSA is supposed to provide the European Commission with scientific advice on genetically modified foods, Ms. Banati did not reveal that she had previously sat on the board of directors of the International Life Science Institute, which lobbies in favour of genetically modified products and includes among its members several multinationals such as Kraft Foods, Danone, Nestlé, BASF and Bayer.
Coulisses de Bruxelles Le Monde

EU officials’ union: “If there are no EU institutions, there is no Europe
EUobserver reports that Renzo Carpenito from the European Council’s FFPE union has complained about some national governments’ approach to EU expenditure, describing it as “scapegoating” and “caricaturing”, following French and British demands for reduced budget increases. “They [European leaders] come here to Brussels and they agree to the Lisbon Treaty, to more Europe but they are not willing to pay for it. If there are no EU institutions, there is no Europe”, Carpenito argued.
EUobserver

Dutch University research: European Arrest Warrant leads to race to the bottom in human rights protection
NRC Handelsblad reports that Dutch judges and prosecutors have “strong suspicions" that the European Arrest Warrant is being abused by authorities in other countries. Researchers from Utrecht University found that judicial protection for suspects is often insufficient and that the instrument is mainly being used to transfer “petty criminals” from country to country.
NRC Handelsblad Utrecht University research

Der Spiegel reports that the discovery of secret documents now ‘proves’ that Germany only traded the Deutschemark for the euro as a French condition for German reunification.
Spiegel

MEPs are threatening to freeze part of the budget for European Commissioners' salaries and allowances unless changes are made to the Commissioners' code of conduct.
European Voice Open Europe blog

Euractiv notes that Egemen Bagis, Turkey's chief EU negotiator, sought yesterday to unblock Ankara's accession bid by calling on EU member states to call referenda on the country's membership. Meanwhile, European Voice reports that NATO Secretary-General Anders Fogh Rasmussen has called on the EU to give Turkey a role in the Union's security policy.
European Voice Euractiv

The Chief Executive of Goldman Sachs Lloyd Blankfein yesterday warned that overregulation could force banks to move out of Europe. He is concerned that the new Basel III rules aimed at toughening banks’ capital and liquidity requirements may be enforced more rigorously by European regulators than by other jurisdictions.
Telegraph FT

FT Deutschland has called into question the influence of the newly created European Systemic Risk Board, noting that its recommendations will only be made public in ‘special cases’. The article notes that this is unlikely to have much impact on member states, unless early warnings of financial hazards are made public.
No link

The WSJ’s Real Time Brussels blog notes that a legal advisor to the European Court of Justice has said that insurance companies may not charge men and women different rates for products. That would include life insurance, in which women routinely get better deals than men because they live longer.
WSJ: Real Time Brussels

ORF reports that the EU is considering yearly stress test for banks.
ORF