Europe
Commission to give new EU supervisor key role in regulating derivatives;
French calls for tighter commodities derivatives oversight "fully shared" by the Commission
Handelsblatt reports on the Commission's proposals for stricter regulation and supervision of the derivatives market, to be published later in the month. According to a draft of the proposal seen by the paper, the Commission plans to take a "central role" in regulating "bilaterally traded derivatives [which] will have to be processed through a central counterparty". The limits and rules of derivatives trading will be determined by the European Commission and ESMA - the new EU supervisor likely to be set up in 2011 - and will be published in a central register, probably located in either Brussels or Paris. The article notes that the new rules for derivatives trading will not just be there for financial institutions, but also for industrial companies, who use derivatives to insure themselves against currency risk, for example. The Commission doesn't want to completely ban derivatives trading, the article notes, but put limits on it.
Meanwhile, in a letter to Internal Market Commissioner Michel Barnier, the French government yesterday called for tighter oversight of the European commodity derivatives markets. France wants to broker a common position on commodities derivatives within the EU before becoming chair of the G-20, at the end of November, the WSJ reports. "It is essential that Europe commit fully to regulation of these markets and that it do so now" in order to avoid price volatility, the undersigned French ministers said in the letter, suggesting "legislation defining regulation of trading of commodity derivatives and assimilated products," including a new EU commodities regulator.
According to AFP, Barnier said he "shares fully" the concerns in Paris, adding that they would be tackled in the upcoming proposals. Barnier will table the first proposal next Tuesday.
FAZ: Lagarde's remarks on Germany's wage policy are "unsolicited advice"
FAZ reports on new comments made on Berlin's wage policy by French Economy Minister Christine Lagarde, who argued: "I have always said that the recovery of the German economy only pays off for the eurozone when workers benefit from wage increases and this leads to consumption". A comment piece in the paper describes these remarks as "unsolicited advice" and adds: "[Ms. Lagarde] just cannot refrain from it [...] Once again she gives advice on German wage policy with a view to supporting French exports. As if the consumer can be so simply directed from above [...] Excessive wage increases endanger competiveness of companies and therefore employment".
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FAZ attacks "EU regulation fury"
An article by Matthias Wissman in FAZ criticises the EU's "regulation fury", arguing that over regulation has led to a "sinking number of EU member states where industry is a genuine concern. In a Union which consists of 27 member states, the weights have shifted. Countries without industrial heartlands are building majorities and gaining influence". He notes this is "especially visible in environmental and climate policy. Central institutions as the Council and the Commission do not show here sufficient understanding of the industrial value added by the automotive, chemical or mechanical engineering industries. Month after month new regulations are being created".
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Commissioner for Budget foresees "tough, not to say explosive" discussions on the UK rebate and the CAP
EU Commissioner for Budget Janusz Lewandowski yesterday travelled to Paris to discuss the future of the EU budget with the French Ministers of Agriculture, Budget and European Affairs. Lewandowski is quoted by EurActiv saying that he foresees "tough, not to say explosive" negotiations over the EU's next financial framework (2014-2020) Budget, adding that the UK rebate and the reform of the EU's Common Agricultural Policy (CAP) will certainly be the two main issues to be discussed.
Meanwhile, Les Echos quotes French Europe Minister Pierre Lellouche saying, after his meeting with Commissioner Lewandowski: "I have told the Commission many times that member states should not be the only ones to make savings. Everyone must make its own efforts". Mr. Lellouche went on to say: "I have told [Commissioner Lewandowski] to pay attention to the number of European agencies, since some of them do not seem to be indispensable and their added value is at least questionable".
UK and France in talks over defence cooperation
UK Defence Secretary Liam Fox has confirmed that the Ministry of Defence (MoD) is to commence talks with France on further defence co-operation this Friday. However, contrary to yesterday's report by the Times, the BBC reports that a senior MoD source had denied suggestions that the UK and France could share aircraft carriers. The cost cutting measure would help the UK meet austerity targets, however has been widely criticised in the press as putting UK naval independence at risk.
It is widely reported that, according to data released yesterday by the EU's statistics office Eurostat, average unemployment rates in the euro zone are 10 percent, with unemployed unevenly distributed among member states, continuing to fuel fears of a "two-speed" recovery in the eurozone.
European Voice reports that yesterday's meeting between the European Commission and the French government on the Roma people ended inconclusively after the Commission refused to validate France's action. France must provide more information to the Commission before a final judgement is made.
In response to the European Commission's controversial Eurobarometer study released last week which revealed declining popularity of the EU institutions, European Commission President Jose Manuel Barroso has blamed national capitals for not defending the European project during the economic crisis, reports EUobserver.
In an interview with Le Monde, Polish President Bronislaw Komorowski said that energy security and deeper integration in the defence sector will be the two priorities of the Polish EU Presidency, due to start in July 2011. Mr. Komorowski also reiterated that his country is opposed to cutting the cohesion funds budget.
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NRC Handelsblad reports that Dutch caretaker Finance Minister Jan Kees de Jager, who is likely to become the next Finance Minister, has declared his opposition to an EU aviation tax.
An article in FT Deutschland notes that French President Nicolas Sarkozy's calls for a Franco-German fiscal union have so far been met with a sceptical response from the German government.
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A report on EU internal security reports that an estimated 900,000 illegal migrants enter the EU each year. Statewatch comments that "The number of illegal migrants is logically unknown. Now we have the three leading EU agencies inventing a figure to get headlines. This is not only irresponsible it also fuels racism in the EU."
Italian foreign minister Franco Frattini has said the EU will in November discuss a proposal by Libyan leader Muammar Gaddafi that the 27-nation bloc pay the north African country €5 billion a year to stop halt the flow of EU bound migrants.
The WSJ reports that German Bundesbank President Axel Weber's support to be the next president of the European Central Bank (ECB) may be waning as tensions arise over his public criticisms of the ECB's decisions to buy national debts of EU member states.
Labour's former Europe minister Denis MacShane has criticised the UK Government for opting out of the EU directive against sex trafficking, reports the Guardian.
EUobserver reports that negotiations over the proposed EU anti-discrimination directive are facing opposition and are unlikely to lead to a final directive.
A new trade agreement between the EU and Australia enters into force on Wednesday.
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