Moody’s warns that France’s Triple-A rating could be put on negative outlook;
Merkel’s Spokesperson: Dreams of a magic solution will not be fulfilled this week
Reuters reports that eurozone leaders are likely to agree to leverage the eurozone’s bailout fund, the EFSF, by allowing it to guarantee a portion of newly issued eurozone debt at Sunday’s summit of EU leaders. La Tribune reports that yesterday Moody’s said that it may put France’s sovereign credit rating on a negative outlook in the next three months, arguing that the country’s financial stability “has weakened.” The announcement came after the Berlin-based DIW institute warned that any attempts to leverage the EFSF, and increase its effective lending capacity up to €2tr would be “poisonous” for France’s credit rating, adding that the eurozone may ultimately break up if France lost its Triple-A rating, reports Die Welt.
Meanwhile, stock markets plunged yesterday after the German government played down expectations of a comprehensive deal to sort out the eurozone crisis at Sunday’s meeting. Following similar remarks from German Finance Minister Wolfgang Schäuble, German Chancellor Angela Merkel’s spokesperson Steffen Seibert yesterday insisted that “the dreams which are emerging again, that on Monday everything will be resolved and everything will be over, will again not be fulfilled.” Open Europe’s Director Mats Persson appeared on Sky News‘ Jeff Randall live show yesterday, arguing, “The markets already want more than what is likely to be announced on Sunday…Merkel and Sarkozy have made some progress, but they’re still miles away from where they need to be.”
Le Point reports that, following a meeting with French President Nicolas Sarkozy in Paris, Dutch Prime Minister Mark Rutte said that Sarkozy “looked positively” at the Dutch proposal of giving an EU Commissioner the power to enforce budget discipline in the eurozone. Meanwhile, Jornal de Negocios reports that Portugal’s two main trade unions have agreed to call a general strike after the Portuguese government unveiled a new series of austerity measures, although a date is yet to be fixed. Separately, Les Echos reports that the ECB bought €2.24bn of eurozone government bonds last week, approximately the same amount as the previous week.
BBC Le Monde Les Echos El País La Tribune Expansión FT: Global Insight FT FT 2 FT 3 FT 4 CityAM WSJ EurActiv European Voice Times IHT FT 5 WSJ 2 FT 6 Irish Independent El País Independent EUobserver EUobserver 2 El Mundo WSJ 4 Telegraph Telegraph 2 Telegraph 3 Telegraph: Leader Guardian Irish Times WSJ 3 Le Figaro Le Monde Jornal de Negocios EurActiv Le Point Les Echos 2 Les Echos 3 Welt Welt 2 FAZ: Mussler WSJ: Hannon Handelsblatt: Berschens
Following the violent clashes between groups of armed protesters and police in Rome over the weekend, France has announced that – starting from 24 October – it will temporary re-instate checks at the border with Italy ahead of the 3-4 November G20 summit in Cannes, reports Il Sole 24 Ore.
Il Sole 24 Ore ANSA
55% of ECB staff believe Trichet exceeded his mandate during the crisis
FTD reports that a staff survey conducted by the ECB’s trade union IPSO assessing the eight year tenure of outgoing head Jean-Claude Trichet found that 55% of respondents believed that by taking an active role in managing the crisis, Trichet had overstepped the ECB’s mandate of maintaining price stability within the eurozone. However, 53% believed that his actions were correct, while 36% condemned them.
ECHR Judge used his position to shield wife from corruption investigation
The Mail reports that Romanian Judge Corneliu Barsan, who was not a judge before sitting in the European Court of Human Rights, is reported to have used diplomatic immunity to protect his wife from a corruption investigation. Open Europe’s Stephen Booth is quoted saying: “This is a damning indictment on the standard of some judges at the court, which has the power to overrule the UK. The sooner the UK introduces proper safeguards against rulings from judges in Strasbourg the better.”
In the FT, Patrick Jenkins argues that new bank core tier one capital ratios of 9% could lead to reduced lending. He explains that several big banks across Europe have made clear that they will reduce lending commitments rather than raise additional capital in order to meet new EU capital requirements.
FTD reports that the German government is confident that it will be able to implement a general ban on unsecured credit default swaps of sovereign debt, although some member states fear that markets for government bonds would dry up if such a ban was introduced.
Les Echos reports that yesterday outgoing ECB Chief Economist Jürgen Stark told MEPs that a European budget office could “potentially constitute the embryo of what could become, in the course of time and by stages, a European Finance Ministry.”
Bild reports that the new headquarters of the European Council in Brussels, scheduled for completion in 2014, has so far cost €290m, exceeding its initial budget of €240m.
FTD reports that despite significant emphasis placed on R&D by the EU, Volkswagen is the only EU-based company among the world’s top 10 companies measured by R&D spending, whereas last year three EU based companies made the top 10.
Ukrainian President Victor Janukovic has said that he would not bow to EU pressure to free his political rival and former PM Yulia Tymoshenko, and argued that the matter should not be linked to Ukraine’s cooperation with, and possible membership of the EU.
IHT Bloomberg EUobserver
An analysis by BBC Radio 4 has found that according to Conservative Party insiders, two-thirds of Conservative MPs would like to renegotiate the UK’s relationship with Europe.
BBC Radio 4 Analysis BBC: Ed Stourton
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