Germany agrees in principle to help bail out Greece;
Finance Minister admits there is "no alternative"
The front page of City AM reports that Germany and other European countries are working on a bailout plan to save Greece and restore confidence in the euro. A senior German ruling coalition source said last night that eurozone countries had decided "in principle" to help Athens. The WSJ reports that German Finance Minister Wolfgang Schäuble told officials in Berlin on Monday that there "was no alternative" to a rescue plan.
The Telegraph reports that Mr Schäuble has asked officials to prepare a plan in time for tomorrow's EU summit, according to German media. The summit will discuss what form the financial support should with the WSJ suggesting that loan guarantees from Germany and other countries are most likely. The Deputy Head of the German CDU Party Michael Meister is quoted by Le Figaro saying: "whether it is bilateral or collective, any help for Greece will be under strict conditions".
The European Investment Bank said yesterday it would not become involved in a Greek bailout, saying its statute did not allow it, notes EUobserver.
The FT quotes officials in Berlin saying: "We're thinking about what we should do if the crisis spills from Greece into other euro countries. So it's more about finding firewalls, containing the problem, than principally about helping the Greeks." He said there were "no concrete plans" as yet. Outgoing EU Monetary Affairs Commissioner Joaquin Almunia said: "I would like the leaders of Europe to say to the Greek authorities that in exchange for the efforts you are making, you are going to get support from us".
An Open Europe poll of German voters in June 2009 found that 70% of Germans were against using public money to bail out other countries that had got into financial difficulties. Only 25% said they were in favour of it.
The Times reports that German Chancellor Angela Merkel has repeatedly rejected suggestions that the IMF would have to be called in. However, divisions still exist within the EU over how to deal with the crisis, with the UK and Sweden saying that the IMF would be best placed to help Greece, reports the Irish Times. Swedish Finance Minister Anders Borg said "The IMF has the technical knowledge" to resolve the Greek crisis.
On her BBC blog Economics Editor Stephanie Flanders argues: "Almost everyone - including, I'm told, the Greek government - thinks an IMF programme would provide the cleanest, most credible, solution...However, key European officials are dead against the idea. This is mainly because they can't bear the symbolism of the IMF coming in to bail out the euro."
A leader in the Times argues, "The fundamental objection to monetary union is that it leads to a common budgetary policy as well as a single interest rate. Greece's woes illustrate how this happens; the taxpayers of other eurozone countries pay the price. Britain has its own economic problems, but British voters at least have the power to punish the policymakers who created them. Joining the euro means giving up that democratic right. That choice would be irreversible and wrong."
Meanwhile, public sector workers in Greece have today launched a nationwide strike, protesting against the Greek government's measures to cut the country's budget deficit, including pay freezes and pension reforms.
Times Times: Leader Times 2 Times: Maddox BBC France-Info Le Monde WSJ City AM City AM: Heath EUobserver EurActiv EUobserver 2 FT FT 2 FT 3 WSJ 2 WSJ 3 Irish Times FT BBC: Stephanomics blog Telegraph: Hannan blog Telegraph Guardian Telegraph 2 Guardian 2 Guardian: Leader Mail Mail 2 Le Monde Financial Times Deutschland Mail: Alexander Le Figaro OE press release OE blog
Four MEPs launch legal case against reforms to EP's controversial second pension scheme
The Telegraph reports that four Conservative MEPs, Sir Robert Atkins, Giles Chichester, Roger Helmer and Robert Sturdy, are part of a legal action against measures introduced by the European Parliament which will affect the terms and conditions of their taxpayer-funded second pension scheme. They are the only British MEPs taking part in the legal challenge, which includes 59 other retired or serving MEPs, and lost their right to anonymity during the court case.
The reforms, including raising the eligibility age to 63, ending early retirement at 50 and scrapping lump sum payouts, were drawn up to help plug a £106 million shortfall in the fund following the economic crisis. Under the scheme, taxpayers contribute £2 for every £1 contributed by the MEP. It is a voluntary scheme, which gives MEPs an extra £44,000 a year, as they already receive a standard pension set at the same level as Westminster MPs. The combined pension, including the top-up, for an MEP who has served 15 years is worth in excess of £67,000 a year.
Telegraph OE blog OE press release
Lords Committee hits out at 'damaging' EU financial reforms
A new report by the House of Lords European Union Committee is calling for the UK to withhold its endorsement of the EU's proposed Alternative Investment Fund Managers Directive, declaring that it would "seriously damage the EU and UK economies."
The report recommends that the UK Government should "not agree to the directive unless it is compatible with equivalent legislation with regulatory regimes in third countries and in particular in the United States." However, there may be significant opposition should the UK take such a stance, as many EU member states favour much tighter regulatory controls. Amendments to the proposed AIFM Directive are currently being reconciled under the watch of the Spanish government, which holds the EU rotating presidency.
The report singles out the European Commission for criticism, stating that "Had the commission followed its own better regulation principles, the shortcomings of the directive could have been dealt with at a much earlier point or might not have been there in the first place."
Independent Bloomberg Telegraph FT Committee report Open Europe research
The BBC reports that Portuguese Finance Minister Fernando Teixeira dos Santos has said in an interview that Portugal will not leave the euro. He also rejected the idea of either an EU bailout or IMF bailout, saying: "I would not say yes to a bail-out, because we have to make important reforms and corrections. Such a kind of a bail-out would look like some kind of anaesthesia that will not correct what we should correct."
BBC IHT
In an interview with the Express UK Conservative leader David Cameron said he was opposed to Britain joining the euro, adding: "If I am Prime Minister and for as long as I would be Prime Minister, I would never take Britain into the euro, full stop, end of story."
Express
EU President advocates "encouragement mechanism" for EU 2020 strategy
According to Le Monde, EU President Herman Van Rompuy has presented his plan for an EU 2020 growth strategy in a note sent to EU leaders in preparation for tomorrow's EU summit. In it, he advocates reducing the number of objectives, compared to those in the Lisbon Strategy, to a maximum of five. The supervision on progress made by the member states should also be enforced, without financial sanctions, but with an encouragement mechanism: privileged access to European Investment Bank loans, to the use of European research budgets, structural and cohesion funds.
Meanwhile, following President Van Rompuy's calls for EU 'economic government', noted in yesterday's Open Europe press summary, the Economist's Charlemagne notebook argues: "government leaders in places like Spain and France, or the new President of the European Council Herman Van Rompuy, are currently talking about the need for more policy co-ordination and European 'economic government'. And when they say that, I think they come close to treating the diversity of the 27 member union as a problem."
Economist: Charlemagne notebook BBC: Hewitt blog Independent OE press summaryLe Monde
MEPs voted yesterday to confirm the new European Commission by a margin of 488 to 137, with 72 abstentions.
European Voice Le Figaro Il Sole 24 Ore Euronews Handelsblatt FT WSJ EUobserver Qui a dit quoi L'Alsace Irish Times Guardian
New Lisbon Treaty powers for European Parliament opens door to lobbyists
FT: Analysis
EU organic label to be mandatory on goods from 1 July
The Express reports that the EU's new label for organic food, the 'Euroleaf', will have to appear on all pre-packaged organic goods produced in Europe from 1 July 2010. The Soil Association's logo, which certifies the bulk of organic goods produced in the UK, will continue to appear on goods in tandem with the Euro-leaf.
Express BBC
The Irish Times reports that Irish Foreign Minister Micheál Martin said yesterday that preliminary research commissioned by the government indicated that there was a perceived link between Ireland's second vote on the Lisbon Treaty and the state of the Irish economy.
Irish Times
Supporters of losing candidate Yulia Tymoshenko said they were preparing legal challenges to the result of Ukraine's Presidential election.
WSJ EUobserver BBC Telegraph
EUobserver reports that China has officially topped Germany as world's No.1 exporter.
EUobserver
Le Monde reports that reform of the retirement and pension system is high on the agenda in several EU states, all under pressure from the economic crisis, writing: "Greece and Spain have announced it, France envisages it, the Czech Republic has done it, Finland would like to do it and the UK is thinking about it".
Le Monde
77% of the French think of the EU as 'essential' to meet global challenges, according to a Eurobarometer survey published yesterday.
NouvelObs
Spanish daily La Razón report that after this morning's EU summit, Spanish Minister for Industry, Business and Tourism, Miguel Sebastián, announced that "today the electric car has been born." Spain would like to see plans for the electric car to be formalised in May this year and to be part of the EU's 2020 economic strategy.
EUobserver La Razón Europa Press Transport and Environment
EurActiv report that the extra 18 'ghost MEPs' set to join the European Parliament after the Lisbon Treaty came into force last year, met with further debate on Monday when the matter of national selection was discussed by the European Parliament's Constitutional Affairs Committee.
EurActiv
The Guardian reports that "unscrupulous" speculators are contributing to serious shortages around the UK of commonly used drugs for conditions such as cancer and high-blood pressure, by selling them to Europe at a profit due to the weak pound.
Guardian
Open Europe is an independent think tank campaigning for radical reform of the EU. For information on our research, events and other activities, please visit our website: openeurope.org.uk or call us on 0207 197 2333.
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