Eurozone ministers approve €110bn bailout package for Greece
Eurozone finance ministers approved a €110bn package of emergency loans for Greece on Sunday, €80bn of which will be provided by eurozone countries, and the rest from the IMF. The loans will be co-ordinated by the European Commission, with up to €30bn of the eurozone loans available in the first year. Quarterly reviews will be done to decide what instalments are to be paid out.
Greece also announced on Sunday an additional €24bn in austerity measures in return for the loans, including a three-year freeze on public sector salaries and pensions and raising the retirement age. There were a series of May Day protests in the country and Greek public sector workers, who will face the brunt of the measures, have begun a 48-hour strike, ahead of a nation-wide general strike tomorrow.
The European Central Bank has announced it is suspending its rules on minimum credit ratings, which would have prevented it accepting junk-rated government bonds in return for loans. It said that the indefinite suspension applied to Greek government debt only.
The German cabinet yesterday agreed on a bill to provide Greece with £19bn over three years as part of the bailout, reports the Mail. Germany will contribute £9.5bn this year, followed by £12bn over 2011 and 2012. German Finance Minister Wolfgang Schäuble said the bill could be passed by parliament by the end of the week, reports the IHT.
EUobserver reports that the Slovakian government has said it will not immediately contribute its share, and quotes Slovak Prime Minister Robert Fico saying: "I don't trust the Greeks. The approval by the [Greek] government is not enough. We want to see laws approved by the parliament leading to cuts in salaries, pensions and social benefits. Until then the Slovak cabinet will not authorise its loan."
Meanwhile, El Mundo reports that Angela Merkel announced on ARD television that one of her biggest election promises, to introduce a second tax relief, will no longer be possible due to the bailout.
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French Finance Minister: Eurozone needs to get "serious" about economic government "or all this will end as a flash in the pan"
EU President Herman Van Rompuy has said he wants an exchange of views on the lessons for the eurozone from the Greek crisis, ahead of new economic surveillance measures to be presented on 12 May. Handelsblatt reports that German Chancellor Angela Merkel has said that she will use Friday's summit to strengthen the EU's Stability and Growth pact, and call for a European credit ratings agency to be set up. A draft parliamentary resolution from the CDU, seen by the paper, proposes to suspend voting rights in the European Council for member states "which have considerably violated the rules of European Economic and Monetary Law".
German Finance Minister Wolfgang Schäuble is quoted by Milano Finanza, explaining that "we [the Eurozone governments] need to consider introducing a bankruptcy procedure for member States. We must think of how to accompany - in extreme circumstances - a member country along some kind of controlled default, without putting the whole Eurozone at risk".
In an interview with Le Monde, asked whether the Stability and Growth pact will need to be modified, French Finance Minister Christine Lagarde said: "Yes, indeed. We must imperatively include in our radar the controls over competitiveness and financial stability. We didn't pay enough attention to the widening of the competitiveness gap between Germany, on the one side, and Greece, Portugal and Ireland, on the other".
When asked whether 'political union' will follow 'monetary union', she said: "[The Greek crisis] will force us into deep reflections with all of our Eurozone partners - notably with our German friends - over the economic government, economic convergence, and the reduction of economic gaps. Either we are serious and try to build something together, or all this will end as a flash in the pan".
Italian Central Bank President Mario Draghi has said he would like to "broaden the scope of the Stability and Growth Pact [...] The ideal solution would be a new Treaty, but it would be anything but straightforward".
Le Monde European Voice Le Figaro EUobserver EUobserver 2 Le Monde 2 Le Figaro 2 Il Sole 24 Ore Handelsblatt El Mundo Rheinischen Post
Wolfgang Munchau: "The experiment of a monetary union without political union has failed";
Writing in Monday's FT Wolfgang Munchau argued that the aim of the Greek bailout package is not to prevent a default, and that, in spite of the austerity measures, "Greece will not get by without some form of debt forgiveness...A debt restructuring will eventually be necessary". He adds that the idea of a fiscal union and a single European bond "are [now] without alternative, as the experiment of a monetary union without political union has failed. The EU is thus about to confront a historic choice between integration and disintegration."
Writing in Monday's FT Quentin Peel looked at the reaction to the bailout in Germany and argued that Angela Merkel's popularity seems stable, and a likely result is "the Greek deal will simply reinforce German unhappiness about having given up the D-Mark for the euro at all." Bild features on its front page today, the headline: "Why are our politicians breaking the EU Treaty?", printing a copy of the no-bailout clause in the EU treaties.
A leader in Handelsblatt carries the title "Merkel leads citizens the wrong way" and argues, "in order to make it easier to obtain consent from her party on the Greek aid, the Chancellor has demanded changes to the Stability and Growth Pact... With such proposals Merkel is leading citizens the wrong way. First of all, in most cases a change in EU treaties is necessary. That could take years... Secondly, Merkel would be better making sure that Germany respects the rules which have been already been applied, instead of trying to make new ones for the future."
Dutch daily De Volkskrant notes that "the role of the European Commission in recent weeks has been remarkable. Although it doesn't have the budget or competences for this kind of emergency aid, it was along with France the motor behind the support operation."
Telegraph: Bootle FT: Munchau FT: Peel FT: Barber IHT: Vinocur Times: Kaletsky Independent: Lichfield FAZ Leader Sunday Times: Kiberd Sunday Times: Liddle Observer: Wachman IHT: Heritage Sunday Telegraph: Stevenson Handelsblatt Comment FT: Brussels blog Telegraph: Hannan blog FT: Rachman blog Economist: Charlemagne notebook BBC: Hewitt blog
European Development banks warn AIFM Directive could "restrict the flow of capital to some of the poorest countries in the world"
Monday's FT reported that the Association of European Development Finance Institutions (EDFI), a group of 15 government bodies that invest in emerging markets, have written to the Spanish EU Presidency to warn that the proposed directive on hedge funds and private equity (AIFM Directive) could prevent them carrying out their work. The letter said that the Directive could "restrict the flow of capital to some of the poorest countries in the world, thereby preventing the EDFI members from achieving some of its developmental objectives".
Meanwhile, in a letter in today's FT, Tom Ingram, Chief Executive of Caledonia Investments, argues that the EU's proposed AIFM Directive "will impose significant cost and compliance burdens, with no benefits whatsoever" for investment trusts.
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Former security chiefs warn Lib Dems that enhanced EU defence "cannot substitute for American power"
In a letter to the Times, three former leading members of the UK's security services write, "We are concerned that the Liberal Democrats make no mention of Nato in their manifesto. Almost every reference to the United States is accompanied by a call for a much more distant relationship -- and this includes the Obama Administration. An enhanced European defence and security posture, however welcome, cannot substitute for American power."
Meanwhile, in the Mail, Christopher Meyer, former British Ambassador to Washington, writes, "Nick Clegg, a former MEP, speaks of his 'long-term interest to be part of the euro', just at the moment when the entire project has started to totter under the strain of the Greek financial crisis (and we should thank our lucky stars that we are not trying to solve our own economic problems from inside the strait-jacket of the Eurozone)."
In the Irish Times, Arthur Beesley argues, "Europe would divide the Tories and the Lib Dems in any joint administration, but the schism would be secondary to Clegg's totemic demand for reform of Britain's first-past-the-post electoral system."
Times: Letters Express Mail: Meyer FT: Duff Irish Times: Beesley FT: Patten Open Europe briefing
Defra delays publishing recipients of EU farming subsidies until after election
EUobserver reports that the Department of Environment, Food and Rural Affairs (Defra) has chosen to postpone the publication of details concerning the latest farm subsidy payments until after Thursday's General Election, although the deadline had been fixed at midnight last Friday. A spokesman for Defra is quoted saying "it is not appropriate for us to publish this information at this point on the basis that some of the details may refer to people standing for election".
EP changed rules to allow former President to continue enjoying chauffeured limo
Der Spiegel reports that former European Parliament President Hans-Gert Pöttering MEP is keeping his privilege of a limousine with a driver on call. The article notes that he should have given back his limousine last October, as this was three months after the new EP President entered office. However, last November, the Presidium of the European Parliament changed the rules by signing a note from EP Secretary General Klaus Welle, who used to be an assistant to Pöttering.
Mandelson forced to deny accusations he is plotting against Ashton
Last week's media speculation that EU Foreign Minister, Cathy Ashton, threatened to resign before the end of her term has met with criticism from EU officials, who have denied the claims. Saturday's Mail reported that aides close to Ashton suspect it may be part of a "whispering campaign" by Lord Mandelson to propel Foreign Secretary David Miliband into the position. Mandelson's spokesman denied the claims, saying, "He thinks she is doing quite a reasonable job."
The Telegraph's Deputy Editor, Benedict Brogan, writes on his blog: "Last night I heard a curious thing: I'm told a plan is being hatched to replace Lady Ashton, the Labour peer currently serving as British commissioner, with [former Tory chairman] Lord Patten of Barnes."
Meanwhile, a leader in the Irish Times looks at the creation of the EU's External Action Service, arguing, "political tussles between the European Commission, Council of Ministers and individual member states over lines of accountability and control are in danger of distorting the original design and purpose of the exercise".
Mail Express EurActiv Telegraph: Brogan blog Irish Times
Lawyers warn that upcoming ECJ ruling may deprive UK companies of "crucial legal advice"
EU cross-border healthcare "is going to happen: the ECJ has ruled it must"
Member states secure delay in EU rules on power stations' emissions
Monday's Independent reported that lobbying by the UK and other member states appears to have secured a delay in EU plans to cut power station emissions due to be voted through the European Parliament this week. The original plan for a 2015 deadline is part of the integrated pollution prevention and control (IPPC) directive which will follow on from the large combustion plant directive (LCPD). But it was opposed strongly by member states, who proposed a 2020 deadline to give power generators more time to upgrade emissions reduction equipment. Holger Krahmer MEP, who is the rapporteur for the Directive, said he is confident that an extension until June 2019 will be voted through.
The FT reports that Lib Dem MEP Andrew Duff has proposed that EU citizens should be able to select 25 MEP candidates from a brand-new Europe-wide list in the next European elections. French newspaper La Croix also notes that Mr. Duff would like to include celebrities in the new pan-European list "like Carla Bruni or football stars", as a means to attract voters.
FT La Croix
European Voice reports that EU Commissioners swore a formal oath yesterday "pledging to act independently of national governments and to respect the EU's treaties. They also swore for the first time to respect the Charter of Fundamental Rights, reflecting the legal status the charter now has under the Treaty of Lisbon".
The Times notes that EU regulations will require manufacturers of 'silent' electric cars to install artificial warning sounds to the new generation of zero-emission vehicles.
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