Cameron: Treaty changes provide “opportunities” to repatriate powers; Government faces rebellion on today’s EU referendum vote
At yesterday’s summit, leaders agreed to explore a “limited” treaty change to deliver stronger economic governance within the eurozone. Speaking following last night’s meeting of EU leaders, Prime Minister David Cameron said: “I don’t think this is the right time to legislate for an in/out referendum. This is the right time to sort out the eurozone’s problems, defend your national interest and look to the opportunities there may be in the future to repatriate powers back to Britain. Obviously the idea of some limited treaty change in the future might give us that opportunity.” However, Cameron stressed that, “Treaty change can only happen if it is agreed by all the 27 member states of the European Union.”
Cameron’s insistence that the discussions involve all 27 members and not just the eurozone states angered French President Nicolas Sarkozy, who said, “You have lost a good opportunity to shut up”. He added, “We are sick of you criticising us and telling us what to do. You say you hate the euro and now you want to interfere in our meetings.”
In Saturday’s Telegraph, William Hague also ruled out an in/out referendum. Instead, he argued that: “The entire Government is agreed that we must first make sure that eurozone integration would not allow countries in the single currency to impose decisions on countries outside it and, second, ensure that Britain’s leading position in financial services is recognised and protected. Beyond that, we should seize opportunities as they arise to reduce the EU’s powers in Britain in other areas, most importantly in social and employment laws, where EU interference is doing real harm.”
At least 60, and possibly as many as 100, Conservative MPs will vote against the Government, or abstain from voting, on today’s EU referendum motion, despite a three-line whip and the threat of disciplinary action. Several alternative amendments have been tabled which stop short of calling an immediate referendum but demand new Government plans for a repatriation of powers, however there is no guarantee these will be debated as John Bercow, the Speaker of the House of Commons, has discretion over which amendments are called.
Summit conclusions Guardian FT Times Saturday’s Telegraph: Hague Sunday Times: Leader Sunday Telegraph: Jenkin EUobserver EUobserver 2 Irish Times Mail Telegraph Independent Le Figaro El País Independent: Sieghart BBC Mail 2 Mail: Heffer City AM FT: Editorial Telegraph: Johnson Times 2 Irish Times Conservative Home: Lidington Conservative Home: Nuttal Conservative Home Conservative Home: Browne Conservative Home: Eustice Sunday Telegraph Mail on Sunday Sunday Express Sunday Times Independent on Sunday Observer Observer 2 Mail on Sunday: Leader Mail on Sunday: Forsyth Independent on Sunday: Rentoul Observer: Leader Observer: Rawnsley Sunday Express: Leader Sunday Telegraph: Leader Sunday Telegraph: d’Ancona Saturday’s Telegraph: Moore Saturday’s Telegraph Saturday’s Telegraph Saturday’s Guardian: Toynbee Saturday’s Guardian Saturday’s Times: Editorial Saturday’s Times Saturday’s Times: Parris Saturday’s Times Saturday’s Independent Saturday’s Express Saturday’s Express: O’Flynn City AM: Heath
Little agreement at EU summit marred by arguments between EU leaders
EU leaders agreed a broad €108bn plan to recapitalise European banks at the EU summit over the weekend, despite reports suggesting the meetings were marred by a series of arguments between European leaders. Under the plan, which is expected to be formally announced on Wednesday, European banks will need to find €108bn in new capital over the next six to nine months, initially through private funding with state and European funds as a last resort, although the final details will depend on the level of private sector involvement in the second Greek bailout.
Despite not reaching a final agreement on how best to leverage the EFSF, the eurozone’s bailout fund, reports suggest the discussions are now focused creating a special purpose fund which would attempt to attract funding from the IMF and global investors to purchase the debt of struggling eurozone countries, while another fund running in tandem would insure parts of new issues of these countries’ sovereign debt. EU Commissioner Karel de Gucht told Belgian Radio 1 that it is likely that the EFSF can be increased to €1.25tr, while Bundesbank President Jens Weidmann warned in Bild am Sonntag that increasing leverage “obviously increases risk”.
The FT reports that German Chancellor Angela Merkel and French President Nicolas Sarkozy had a significant disagreement with Italian Prime Minister Silvio Berlusconi after failing to receive sufficient assurances over the Italian government’s commitment to cutting its debt and deficit levels and instituting economic reforms. Following their meeting Berlusconi announced a plan to increase the retirement age to 67, putting him on a collision course with junior coalition party Lega Nord. Sarkozy was reportedly also angered by the fact that Italy’s ECB executive board member Lorenzo Bini-Smaghi had not been appointed as the next Italian central bank governor by Berlusconi, a decision that risks leaving France without a representative on the board when Jean-Claude Trichet leaves the ECB Presidency at the end of October. Open Europe’s Raoul Ruparel is quoted saying, “Clearly [choosing ECB posts] has become highly politicised and subject to horse-trading…That’s a worrying trend.”
Meanwhile, European officials are still locked in talks with the banking sector over the size of write downs which bondholders should take under the second Greek bailout, with EU officials pushing for a 60% write down. The final report of the EU/IMF/ECB review team, which was leaked over the weekend, suggested that even with a 60% write down, Greece’s debt to GDP ratio would still be 110% in 2020. The report also stated that the size of the second Greek bailout would need to be increased.
Le Monde reports that European leaders have appointed Herman van Rompuy, European Council President, to oversee future eurozone meetings, until mid-2012 when someone will be appointed to the post.
FT CityAM CityAM 2 WSJ FT 2 WSJ 2 WSJ 3 WSJ 4 WSJ 5 FT 3 FT 4 BBC Irish Independent BBC 2 EUobserver 3 Independent Sun BBC 3 Straneuropa Le Figaro El País La Stampa Corriere della Sera Corriere della Sera 2 Il Sole 24 Ore Repubblica Economist: Charlemagne Il Sole 24 Ore 2 EUobserver EUobserver 2 Independent 2 Le Figaro 2 EUobserver 4 Times Times 2 Irish Times Irish Times 2 Irish Times 3 Irish Times 4 BBC 4 Mail Guardian Guardian 2 Sunday’s Telegraph Sunday’s Telegraph 2 Sunday’s Telegraph 3 Sunday Times Mail on Sunday Independent on Sunday Sunday’s Express Sunday’s Mirror Sunday’s Mirror 2 Sunday’s Telegraph 4 FT Weekend FT Weekend 2 FT Weekend 3 FT Weekend 4 FT Weekend 5 FT Weekend 6 FT Weekend 7 Saturday’s Telegraph Saturday’s Telegraph 2 Saturday’s Telegraph 3 Saturday’s Guardian Saturday’s Guardian 2 Saturday’s Independent Saturday’s Independent 2 RTL Z Standaard DPA DPA 2 HLN Handelsblatt Reuters France Le Monde Le Parisien Reuters France Le Figaro Contrepoints Le Monde 2 FTD FTD 2 YLE YLE 2 YLE 3 SR DI Reuters FAZ Radio 1 Bild am Sonntag Kathimerini BBC: Hewitt BBC: Peston Coulisses de Bruxelles Independent: Leader Repubblica: Boeri La Stampa: Calabresi La Stampa: Lepri Il Sole 24 Ore: Tabellini Les Echos: Seux Times: Leader Times: Fleming Times: Bremner FT: Munchau WSJ: Jenkins WSJ: Nixon FT Weekend: Harford FT Weekend: Authers Saturday’s Telegraph Editorial Saturday’s Guardian: Henley Saturday’s Times: Wighton Independent on Sunday: Cockburn Sunday Times: O’Connell Sunday’s Telegraph: Stephenson Welt: Siems Sueddeutsche: Gammelin FAZ: Steltzner
Belgian daily De Tijd reports on Open Europe’s discussion in Brussels with German Professor Markus C. Kerber, who has sued the ECB. Kerber is quoted saying that “[ECB President Jean-Claude] Trichet claims that the ECB has sterilised its increase of the monetary base by removing an equivalent amount as the portfolio of purchased government bonds out of the market through short term deposits. But that’s a lie! Banks can just simply present those the next day as collateral, in exchange for money.”
Open Europe Events
EU’s revised Mifid directive opens loophole on kickbacks to financial advisers
The FT reports that proposals contained in the European Commission’s draft Mifid II directive could undermine moves taken by national regulators to clamp down on cash payments to financial advisers. In City AM, Conservative MEP Syed Kamall writes that: “I share concerns expressed that the rules on third countries may stop institutions from emerging markets advertising their services in the EU, which could disproportionately affect London”, and adds that “Esma [European Securities and Markets Authority] is being given too much power to enforce the proposed new rules. As a consequence, the regulator could become the policeman of the rulebook rather than its interpreter. We must ensure that it is not given discretionary powers over individual firms.”
FT City AM: Kamall Open Europe Research
The Mail reports that Tesco has cut back on temporary staff following this month’s introduction of the EU’s Agency Workers Directive, which gives temporary employees the same rights as full-time staff after 12 weeks in a job. Separately, the Sunday Telegraph reported that following discussions between Tesco and Mainstream, a recruitment agency supplying truck drivers, a number of temporary workers had agreed to sign contracts waiving their rights under the Directive.
Mail Sunday Telegraph
German Justice Minister Sabine Leutheusser-Schnarrenberger has expressed fears that if the FDP were to vote against the establishment of the European Stability Mechanism in an internal party vote, this would make the FDP “unable to act” within the governing coalition.
Le Parisien reports that due to unfavourable economic conditions the French government has had to reduce its growth forecast and may need to find at least an additional €10bn in savings or tax revenues to balance the budget in 2012.
Speaking on the BBC’s Andrew Marr show yesterday, Scotland’s first minister and SNP leader Alex Salmond said that an independent Scotland would continue to use sterling as its currency until “it was to Scotland’s economic advantage to join the Euro.”
Andrew Marr Show: Salmond
Lord Adair Turner, Chairman of the FSA and co-author of a 2002 paper entitled ‘Why Britain should join the Euro’, which argued that “joining the euro would increase our incomes and our standard of living”, has now said: “I got it wrong.”
Observer CityAM 2
This post orlginally appeared on Open Europe.
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