FT Deutschland: Merkel pushing for a Greek default; Merkel and Sarkozy pledge to present “comprehensive solution” to euro crisis by end of October
Monday, October 10, 2011
The front page of FT Deutschland reports that German Chancellor Angela Merkel is actively working for a Greek default. The paper quotes a government source saying, “That’s what we are pushing for.” In an interview with FAZ yesterday, German Finance Minister Wolfgang Schäuble suggested that bigger write downs for Greek bondholders may be needed under the second Greek bailout plan. DPA reported that the German government is considering a plan which involves a 60% write down on Greek debt. France and the European Commission remain opposed to the idea of bigger write downs.
Following a meeting in Berlin yesterday, Merkel and French President Nicolas Sarkozy pledged to come up with a “sustainable and comprehensive solution” to the eurozone crisis by the end of October. Merkel also said that stronger economic coordination in the eurozone would require a Treaty change. The German Chancellor also stressed, “We are determined to do whatever is necessary for the recapitalisation of our banks,” but offered no further details. Irish Finance Minister Michael Noonan is quoted by the Sunday Times suggesting that the size of bank recapitalisation “will be significantly in excess of €100bn.”
The FT reports that Prime Minister David Cameron has called on European leaders to take a “big bazooka” approach to tackling the eurozone crisis, implying that the eurozone’s bailout fund, the EFSF, should be radically increased. Separately, Handelsblatt reports that ratification of the EFSF expansion by the Slovakian parliament still looks uncertain after Richard Sulik’s Freedom and Solidarity (SaS) party rejected a compromise deal offered by Prime Minister Iveta Radicova over the weekend. Sulik is demanding a Slovak veto over future EFSF activation.
Meanwhile, Belgium, France and Luxembourg have reached an agreement to rescue Dexia. Under the deal, the Belgian government will buy the bank’s division in Belgium for €4bn. Dexia also secured state guarantees of up to €90bn in order to secure borrowing over the next 10 year, with Belgium providing 60.5% of these guarantees, France 36.5% and Luxembourg 3%. Separately, Fitch downgraded the credit ratings of Italy and Spain on Friday.
FT FT 2 FT 3 FT 4 CityAM WSJ EurActiv European Voice Independent on Sunday Sunday Telegraph BBC EUobserver 2 Les Echos Independent Le Figaro ABC El País Irish Times Irish Independent Guardian Times Guardian Sunday Times Sunday Express Observer CityAM 3 WSJ 4 Le Figaro: Chryssohoidis Telegraph Saturday’s Times Saturday’s Times 2 Saturday’s Telegraph Saturday’s Telegraph 2 Saturday’s Telegraph 3 EUobserver BBC BBC: Peston Le Figaro CityAM 2 WSJ 2 European Voice 2 Irish Times Times Saturday’s FT WSJ 3 Irish Independent BBC 2 Les Echos Saturday’s Guardian FT: Leader Independent on Sunday: Pagano Sunday Times: O’Connell WSJ: Stelzer CityAM: Heath FT: Munchau FT: Dizard CityAM: Fraser CityAM: Drake Times: Emmott Times: Maddox Le Point Les Echos FTD Welt
John Major: Future treaty changes offer chance to repatriate powers
Speaking on the BBC‘s Andrew Marr Show, former Prime Minister Sir John Major said, “At some stage there will be another treaty because if there is fiscal union in Europe it changes our relationship to Europe”, adding, “I think there are some areas that are worth looking [at]. Fishing is one. I think there are some elements of employment law…things like the working time directive, which I think is a very foolish piece of legislation – we could look at repatriating part of it.”
In the Independent, Mary Ann Sieghart argues that, “the two Coalition partners aren’t nearly as far apart on Europe as most people believe,” noting that some Lib Dem ministers “are instinctive localists and wouldn’t mind seeing Britain take back control of employment and social affairs, fisheries or agriculture.” On BBC Five Live and Radio 4, Conservative MP Andrea Leadsom said that the new “Fresh Start” project, looking to reshape UK-EU relations in “every policy area”, has a lot of support from MPs and ministers. Meanwhile, Open Europe’s Stephen Booth appeared on LBC Radio this morning arguing in favour of repatriating aspects of EU employment law, particularly the Working Time Directive.
Telegraph Telegraph: Leader Mail EUobserver FT Independent: Sieghart Times Conservative Home BBC Five Live
FT Deutschland: Proposal on CAP reform “a great victory for the agricultural lobby”
According to a confidential draft proposal on CAP reform seen by FT Deutschland, EU farmers are set to receive €418.4bn in subsidies during the 2014-2020 budgetary period, an increase of €10.4bn compared with 2007-2013, of which over three-quarters will be disbursed as direct payments to farmers. The paper notes that despite attempts to distribute CAP benefits more evenly around the EU, from the North and West to the East, Dutch and Belgian farmers (€400 per hectare on average) will still receive almost three times as much as Latvian Farmers (€140 per hectare on average).
EU financial transaction tax could cost 50,000 City jobs
The Sunday Times reported that the EU Commission’s own assessment of their proposed financial transactions tax states that around 70 to 90% of derivatives trades and 10% of securities trades would leave the EU and that 0.03 per cent of all EU jobs would be lost. The paper concluded that, as Britain is home to about 75% of EU financial trades, the tax would lead to the loss of 50,000 jobs in the City and among support staff across the country.
Open Europe research Sunday Times Independent on Sunday: Lawson
Polish Government wins historic second term
Polish Prime Minister Donald Tusk’s Civic Platform (PO) party and its coalition partner the Peasants’ Party (PSL) have won enough seats following yesterday’s parliamentary elections to continue with the present coalition government, with Tusk becoming the first PM to serve consecutive terms since the fall of Communism. With 93% of the vote counted, PO won 39% and PSL 8.5% to Law and Justice’s 30%, Palikot Movement’s 10% and the Democratic Left Alliance’s 8.2%. EurActiv describes the result ‘good news’ for EU Presidency because Tusk is a “pragmatic liberal conservative” opposed to what he sees as “a new wave of euroscepticism” within the EU.
Gazeta Wyborcza Rzeczpospolita EurActiv European Voice IHT Telegraph Guardian
The Times notes that the European Parliament’s Budget Committee is tomorrow expected to vote for a €6.6bn (£5.7bn) rise to the EU’s 2012 budget, which would see it reach €133bn. The increase would amount to some £680m extra from Britain on top of this year’s £9bn contribution.
Handelsblatt features a two-page article noting how France’s economic situation and lack of competitiveness might result in the country losing its Triple-A rating.
Saturday’s Mail reported that under the EU’s Pregnant Workers’ Directive, currently being considered by MEPs, new mothers returning to work after having a baby must be allowed ‘breastfeeding breaks’ of up to two hours each day, have the right to work part-time for a year, and be entitled to 20 weeks’ maternity leave on full pay.
The Sunday Times reported that, under the terms of the EU’s toy safety directive, balloons must not be blown up by unsupervised children under the age of eight in case they accidentally swallow them and choke, and a number of traditional children’s toys have been banned because they have been deemed to be “too risky”.
Sunday Times Telegraph Mail Express
The FT reports that Stefan Ingves, Swedish Riksbank Governor and new chairman of the Basel Committee on Banking Supervision, has said that global banking regulators will push ahead with plans to force banks to hold more liquid assets, despite complaints that the new rules could damage the broader economy.
On the Guardian‘s Comment is Free, EU Justice Commissioner Viviane Reding and Lib-Dem MEP Diana Wallis argue for a common European sales law based on the US model.
Comment is Free: Reding & Wallis
In the Mail on Sunday, Lib Dem peer Lord Carlile argued for “fundamental reform” of the Human Rights Act and wrote that “Only rare and exceptional cases should go from the UK, where we now have a Supreme Court, to the European Court of Human Rights.”
Mail on Sunday: Lord Carlile Mail on Sunday
Almost 60% of the City thinks a referendum on the UK’s EU membership should “definitely” or “probably” be held, according to a survey of finance and business professionals conducted by City AM and PoliticsHome. If a vote was held, 49.51% would probably or definitely vote for Britain to leave and 49.2% for Britain to remain in the EU.
This post originally appeared on Open Europe.