Commission says EU could go it alone with €50bn bank tax
The Telegraph reports that the European Commission yesterday unveiled how a potential EU 'bank tax' would work and said the 27-member bloc would introduce the tax unilaterally, should other countries refuse to implement their own measures. The Commission document said, "Actions by the EU alone would be less effective but could be considered, particularly if there are good reasons to expect that an EU role of global leadership would be followed by other key countries."
EUobserver reports that the Commission has said that the new bank tax could generate as much as €50 billion a year for EU governments to "strengthen public finances". Michel Barnier, the EU's Internal Market Commissioner, said, "The financial sector needs to contribute to the costs of financial stability. This should be one of the building blocks in our effort to set up a crisis management framework in Europe".
However, the Commission said it would shortly announce separate plans for a levy on financial institutions that would establish a specific EU "resolution fund" for "crisis prevention and management in the financial sector". The Commission's document also proposes new levies on carbon-dioxide emissions, financial transactions, bonuses and profits to guard against future financial crises and help pay for development aid. It's unclear how the levies would be administered or raised, but revenues are likely to be kept by national governments, with the Commission setting the minimum rate.
EU's rules on financial markets make it "almost impossible" to scrutinise trades
The FT reports that a collection of consulting groups in Britain has published a study showing that the fragmentation of trading venues as a result of the EU's Markets in Financial Instruments Directive (MiFID) has left Europe open to abuse by traders wanting to manipulate the markets, warning that the surveillance of bids and offers and executed trades is "now almost impossible to undertake comprehensively". Maria Velentza, Head of the Securities Markets Unit in the European Commission's Directorate-General for the Internal Market and Services, which is reviewing MiFID, said, "We are going to fix this."
Member states will need to ratify Lisbon again to permit three German MEPs to stay in EP
Dutch magazine Elsevier reports that "EU Member states will need to ratify Lisbon again" as the EU treaties will have to be modified in order to ensure that three German members of European Parliament will be able to remain in the EP until 2014. The Lisbon Treaty provides for the number of MEPs to rise from 736 to 751. However, Germany loses three MEPs under this change, and a Treaty change is necessary to permit them to serve out their term, or they will have to leave the EP. The member states have now produced a proposal to deal with the matter, which the EP will vote on in May. After that, member states and national Parliaments will have to agree to the proposal.
A press release by the EP notes that the Constitutional Affairs Committee gave its support today to a modification to the Lisbon Treaty that would allow 18 new MEPs to take their seats during the current term. They did not consider it necessary to call a Convention to discuss the Treaty change.
Rumours of bailout renegotiation cause Greek bond sell-off
Rumours that Greece might try to renegotiate the bailout plan agreed by EU leaders at last month's summit sparked a sell-off in Greek sovereign bonds yesterday, and pushed up the cost of borrowing to record levels, with Athens paying an interest rate premium four percentage points higher than benchmark German bonds. It also cast doubts on its ability to refinance up to €15 billion of debt over the next two months, according to the Times.
City AM reports that the Greek Finance Ministry have denied the reports and quotes Finance Minister George Papaconstantinou saying: "There has never been any move on the part of our country to change the conditions of the recent agreement." AP reports that IMF officials will meet with Mr Papaconstantinou today to discuss ways to speed up fiscal reforms, at the start of a two-week IMF inspection.
The Telegraph reports that hedge fund managers have predicted Greece will have to accept hedge fund orders in its next bond issue if it is to raise enough money, with hedge funds having been excluded from previous bond issues.
Meanwhile ALDE leader Guy Verhofstadt argues in the WSJ that, in order to solve the underlying crisis in the eurozone, three key reforms are needed: the creation of a 'European Monetary Fund'; the construction of a 'common euro-bond market (EBM)' within the euro zone; and "a real economic-political pillar that determines economic policy [and] makes sure member states adhere to it".
Commission shows reticence on EU carbon tariff
The European Commission yesterday published a staff working document, detailing reservations about the complexity of the possible introduction of a carbon tariff system. In its analysis of financing options the European Commission said that "a carbon border tax has a considerable number of drawbacks which would need to be addressed". It would have to be designed in a way so as to ensure compatibility with WTO rules, with the document noting that, "whatever design is chosen, it could lead to trade conflicts and possible retaliatory measures."
The report also says that the "administrative costs could be very high, as the tax rate would have to vary according to the [varying] emissions of products with likely difficulties of defining and enforcing reliable rules of origin and of coping with the variety of climate-related instruments applied in different countries."
German Christian Democrat MEP Martin Kastler has launched a citizens' initiative petition to call for Sunday to be made a work-free day across the EU, calling the campaign "Mum and dad belong to us on Sunday". It has received over 13,000 signatures so far.
Geithner: Don't "discriminate" against US fund managers
The FT reports on a new letter sent this week by US Treasury Secretary Tim Geithner to Chancellor Alistair Darling and the finance ministers of Germany, France and Spain, urging them not to "discriminate" against US fund managers by denying them access to the EU single market "via a passport approach" under the EU's proposed Alternative Investment Fund Managers Directive.
He writes, "It is my hope that this provision will be revised to provide non-EU funds, fund managers and global custodians the same access as their EU counterparts and promote a single market". He also said that financial reform currently being considered in the US "will treat all advisers and funds operating in the US equally regardless of their origin - domestic or non-US".
European Voice reports that a European Parliament draft report on the Common Agricultural Policy (CAP), which advocates the continuation of farm subsidies and no reduction in the CAP's €58 billion budget is at odds with an independent report, commissioned by the EP, calling for the phasing out of "farm income support" and a greater emphasis on "biodiversity and climate change mitigation."
A Dutch ship, which was part of an EU naval taskforce, circumvented EU consultation processes and received authorisation from the Dutch government instead, to use force to free a German cargo ship held hostage by Somali pirates.
The Mail reports that the Home Office has launched a scheme whereby homeless migrants, including those from the EU, will be forced to leave the country if they cannot support themselves financially. EU rules state that citizens have a right to live in other member states for three months and then only remain if they are self-supporting, working, or registered students.
The FT reports that, when informed that Sky Italia, a rival TV broadcaster to Silvio Berlusconi's Mediaset empire, might be permitted by the EU to bid for new Italian digital terrestrial frequencies, the Italian Communications Minister Paolo Romani said that any such decision would be ignored by Italy.
EUobserver reports that EU President Herman Van Rompuy has suggested that EU summits should sometimes take place in the member state holding the rotating EU Presidency, instead of always in Brussels.
An article in the FT suggests that, as Chancellor, Gordon Brown was seen as an "awkward customer in Europe, given to lecturing fellow finance ministers", but he has emphasised his commitment to the European Union in the last year.
A press release by the European Parliament notes that the EP will vote on a system of 'delegated acts' in April, allowing the Commission authority to amend non-essential aspects of EU law, which replaces the old comitology system before the Lisbon Treaty. According to the release, "the precise legal framework is still under discussion and a report on how delegated acts will work is due to be discussed in plenary in April, after being approved by the Legal Affairs Committee on 23 March".
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