October 15, 2010

Press Summary Archive

Leading German think tanks and Bundesbank back Merkel’s demands for eurozone insolvency procedure and Treaty change; MEPs expected to call for new ‘Mr. Euro’ post

15 October 2010

The FT reports that Germany’s leading economic research institutes have given their support to the German government’s drive for an insolvency mechanism for member states that are in effect bankrupt. The widely respected institutes – including the Munich-based Ifo institute and the Institute for the World Economy in Kiel – insist the emergency €440 billion eurozone rescue package was only a temporary solution and could encourage moral hazard for borrowers and lenders alike.

Instead they have called for an “orderly insolvency” procedure that would involve private lenders, as well as fellow members of the eurozone, sharing in the costs of any debt rescheduling forced on any member of the euro. The WSJ notes that, in a speech in Berlin, Bundesbank President Axel Weber repeated his backing for the idea. Writing in the paper, Terence Roth argues that Weber’s outspokenness “could cost him the votes he needs next year” to become ECB President.

Meanwhile, in London, Luxembourg central-bank chief Yves Mersch argued that the new eurozone rules should also “take aim at national rigidities that are incompatible with a currency union, like automatic indexation mechanisms of wages and pensions,” he said.

Euractiv reports that the European Parliament is expected to back a proposal for a ‘Mr. Euro’ based in the European Commission, who would preside over meetings of the EU Council of Ministers for economic and financial affairs – known as ECOFIN – and chair the regular meetings of finance ministers from countries using the euro – commonly called the Eurogroup. MEPs will debate the proposals on 20 October.

In the WSJ, Stephen Fidler notes an IMF research paper, published this week, underlines that trade imbalances within the eurozone have widened considerably and have become more persistent since the introduction of the euro. Italy’s trade deficit with Germany has risen fivefold within a decade, the paper points out.
Irish Independent Irish Times FT WSJ WSJ: Roth Euractiv Euractiv 2 WSJ: Fidler WSJ: Analysis Handelsblatt Ifo Institute OE research

Italy joins France and Germany in defence of CAP budget
AFP reports that Italian Agriculture Minister Giancarlo Galan and his French counterpart Bruno Le Maire agreed yesterday that “it is indispensable that the Common Agriculture Policy budget matches up its ambitions”. Speaking after talks held in Rome, Le Maire said: “Together with Germany and Italy we believe that we need to keep [the CAP budget] at least at current levels, and we have the feeling that nowadays a majority of EU member states are on the same line”. He added that France has shown “great openness” as it accepted to “review the level of its direct subsidies” to French farmers. “It’s not easy to tell [French farmers] that if they receive €100 from the EU today, tomorrow they may only get €90, €80 or €70 to support Polish or Czech farmers”, he argued.
AFP

The WSJ Real Time Brussels blog reports that the Commission is considering harmonising alcohol taxes across the EU.
WSJ blog

The Times of Malta cites Open Europe in an article looking at proposed changes to EU Commissioners’ Code of Conduct.
Times of Malta OE blog

French and UK Finance Ministers Christine Lagarde and George Osborne are expected to engage in last-ditch talks over the weekend to try to thrash out an agreement on the EU’s AIFM Directive ahead of next week’s meeting of Finance Ministers. The WSJ’s Real Time Brussels blog suggests France is losing allies in the negotiations.
City AM FT WSJ: Real Time Brussels blog Bloomberg

The Telegraph reports that, after a fifteen-year legal battle, three British lecturers based in Italy have won compensation after being excluded from promotion for not having Italian qualifications. The European Court of Justice has ruled that Italy has violated EU rules against discrimination on seven different occasions.
Telegraph

The Times reports that the NHS has “stopped monitoring” hospitals’ compliance with the EU’s controversial Working Time Directive in a bid to improve patient care and to cut unnecessary bureaucracy and cost.
No link

Irish MEP Jim Higgins has defended his decision to go on €400,000 EU funded three-day "study break" to the Portuguese island Madeira, claiming the excursion is value for money and represents important work.
Irish Independent

Iain Martin: A “new breed” of Conservative euroscepticism?
On his WSJ blog, Iain Martin comments on a “new breed” of Conservative euroscepticism. “The government has a majority of little more than 80. It will not have escaped the attention of the whips that a group of 50 plus of Euroskeptics means that the government cannot presume it has a majority on EU-related matters”, he argues.
WSJ: Martin's blog

European Council President Herman Van Rompuy has cited “security reasons” in defence of using two official cars to go on holiday with his family. The article notes that EU Commissioners are not allowed use official vehicles for family purposes, reports the Irish Times.
Irish Times

Le Figaro reports that recent opinion polls show that popularity of German Chancellor Angela Merkel is falling. She could be replaced by German Defence Minister Karl-Theodor zu Guttenberg if she loses regional elections in March 2011, reports FAZ.
Le Figaro FAZ

An internal document seen by The Parliament reveals that the European Commission is working on proposals to “Europeanise” energy policy in a bid to secure future energy supply.  
The Parliament

The Telegraph reports that yesterday a group of British business leaders urged MEPs to vote against a 20 week provision for maternity pay, arguing that these “additional costs” would “come at the wrong time".
Telegraph

50 deputies from French President Nicolas Sarkozy's party are proposing to cut EU pre-accession funds given to Turkey from the national finance bill for 2011. €900 million has been allocated to Turkey for the period 2007-2013 – of which France contributes €127 million, reports EUobserver.
EUobserver Le Monde

The Economist’s Bagehot blog comments on the upcoming budget negotiations arguing: “I differ from [angry Tory commentators] because they think that Britain has a range of attractive alternatives to full EU membership, and I think the alternatives are not attractive at all. But this budget row shows us that Britain is as far away as ever from influencing the main direction of travel in the EU”.
Economist: Bagehot’s blog

AFP reports that yesterday the Belgian parliament ratified the €440 billion eurozone bailout fund, the European Financial Stability Facility.
AFP

US Secretary of State Hillary Clinton has suggested EU leaders should follow the US and withhold further flood-relief funding from Pakistan until it does more to fight corruption and collect tax revenues.
WSJ

European Voice notes that the talks on Serbia’s EU accession could be at a deadlock because of resistance from the Dutch parliament
European Voice