German Finance Ministry outlines new eurozone bailout institution;
Euro must be based on “German stability interests” as concession for support
Sueddeutsche reports that a leaked position paper has revealed that the German Finance Ministry has drawn up proposals for a new body, named the “European Stability and Growth Investment Fund”, to manage the permanent eurozone bailout fund planned for 2013, the European Stability Mechanism. If granted loans from the fund, countries would be required to provide 120% in collateral in the form of gold reserves, stakes in companies, or revenue rights, the newspaper said. The fund would also be able to buy existing European government bonds, freeing the ECB from this task.
Reuters quotes the Ministry’s paper saying that Germany will affirm its “national interest” rests in maintaining the single currency. The euro, however, must “orientate itself on German stability interests” as a “concession to Germany, as the largest economy in the euro zone, serving as an anchor of stability.” According to Sueddeutsche, the new fund would in principle have access to “unlimited refinancing” in order to secure the health of the single currency. The Ministry confirmed the existence of the paper but said it had not approved the proposal, nor had the German government.
Meanwhile, Bloomberg has filed a lawsuit against the ECB, seeking the disclosure of documents showing how Greece used derivatives to hide its fiscal deficit and helped trigger the region’s sovereign debt crisis. The lawsuit asks the EU’s General Court to overturn a decision by the ECB not to disclose two internal documents drafted for the executive board this year. The notes show how Greece used swaps to hide its borrowings.
In an interview with Sueddeutsche, French Finance Minister Christine Lagarde has said she wants “a strong EU economic government” adding that the UK's refusal to take part “shouldn't hold all the others back”. She said that the economic government shouldn’t be limited to the 16 eurozone countries, but that other countries are welcome to join. She named it “the formula 16 plus”. A leader in the paper argues, “Nobody will admit it, but a new institution will be the core of a common European economic and financial policy, introduced through the backdoor”.
WSJ Reuters Bloomberg Telegraph Euractiv.es IHT: Raghavan Handelsblatt Bloomberg FT: Milne MA Welt Volkskrant
New Open Europe briefing: What to expect from the EU in 2011
Open Europe has today published a briefing outlining what to expect from the EU in 2011. It will be an absolutely crucial year for the euro, with eurozone governments facing record levels of refinancing and potentially more bail-outs. The EU will also begin negotiations on the future of the long-term budget, with the UK holding a pivotal role in the talks.
The EU is at a cross-roads and it will have to choose: take a radical step towards an economic and political union in the hope of saving the Single Currency – or go the other way. But any further step towards an economic union, with more bail-outs and supranational budget rules, would radically widen the EU’s democratic deficit.
Open Europe’s Pieter Cleppe was interviewed by Czech TV commenting on the first year with the Lisbon Treaty. He said: “it clearly hasn’t done much to reform the EU for the better. On the contrary, it created more turf wars, less transparent with less democratic accountability. In its first year of existence, the EU Foreign Service has already broken its promise of budget neutrality.”
Member states warn against Romania and Bulgaria joining Schengen
Interior ministers from Germany and France have warned against Romania and Bulgaria joining the Schengen area in March, as initially planned, due to concerns over corruption, crime and insufficient judicial reforms. Romania’s president, Traian Băsescu, hit back calling it “an act of discrimination” and warned it would create an “unacceptable precedent”, reports the FT. In an interview with Le Figaro, French Europe Minister Laurent Wauquiez urges the EU to “stop letting new countries access the EU at full speed”.
President of European Parliament Industry Committee calls for “immediate end” to EU’s ban on light bulbs
Die Presse reports that prominent MEPs are calling for an end to the EU's ban on traditional light bulbs. CDU MEP Herbert Reul, who heads the European Parliament's Committee on Industry, Research and Energy argues in favour of "lifting the ban immediately and without delay”, adding that "the Commission should look if energy saving light bulbs, which are being proposed as an alternative, should be allowed for sale at all, considering the indicated dangers to health.” The Mail reports on research indicating that energy saving light bulbs can release potentially harmful amounts of mercury if broken.
The Commission has denied having a "credibility problem" on human trafficking after a Council of Europe report accused EU institutions of silently tolerating Kosovo abuses, Home Affairs Commissioner Cecilia Malmstrom said during the launch of an anti-trafficking platform, reports EUobserver.
The Telegraph reports that Hungary is due to reintroduce state censorship for all media on 1 January, the same day it takes up the EU’s rotating Presidency. A leader in Die Welt argues, “Fascist tendencies in Hungary are obvious. Should the country be able to take up the EU Presidency in January?”
A former UK Independence party MEP has won her claim that the party discriminated against her because she was a lesbian. Nikki Sinclaire MEP had the whip removed by Ukip leader Nigel Farage in January after she refused to sit with members of the far-right Italian party Lega Nord, claiming that some of its members were homophobic.
The Express reports that next year EU officials will get a 1.92% pay rise; increasing the salaries of Council President Herman Van Rompuy and Commission president Jose Manuel Barroso to £259,000 per year.
Catherine Ashton, head of the EU’s new foreign service the EEAS, has published an organisational chart. She has now almost finished the recruitment phase.