German Finance Minister on EU 'economic government': I'm convinced that politicians will be able to convey the concept of a "federal Europe"
In an interview with Die Zeit, German Finance Minister Wolfgang Schäuble talks about "European economic government", saying "We need better instruments to enforce the stability pact. And we need greater coordination along the lines of an economic government - even if we don't love this phase very much." On the question of whether a European federal state is needed, he responds: "Europe will not become a state like the Federal Republic of Germany is." But he added, "I'm convinced that politicians will be able to convey the concept of a federal Europe of states." When asked whether the German leadership was unanimous in the demand for more Europe, he replied: "Not always".
The EU Correspondent of Dutch daily Het Financieele Dagblad comments on his blog: "Schäuble's officials are not allowed to hold discussions any more with those of Merkel, out of fear that Merkel would get to know about Schäuble's plans and kill them off before they are ready."
In an interview with Le Monde, Olli Rehn, the EU Commissioner for Economic and Monetary Affairs, also calls for increased EU economic governance, "through better coordination and greater budgetary surveillance". He envisages three stages; the rescue of Greece, the use of the Lisbon Treaty and new instruments, leading towards "governance, or economic government".
Zeit Reuters Local Spiegel FD Blog Le Monde The Local
Greece's borrowing costs remain 'unsustainable';
Iain Martin: Eurozone crisis has reignited debate on 'two-speed' EU
The WSJ reports that Greek government bonds continue to come under market pressure after Monday's €5 billion, seven-year bond issue drew slim demand from investors. Bloomberg notes that Greece may pay about €13 billion more in interest on the debt it sells this year, than it would have if yields had stayed at their pre-crisis levels, relative to Germany's. Jim Reid, Head of Fundamental Strategy at Deutsche Bank, is quoted saying, "This story will run and run as these levels of funding relative to core Europe aren't really sustainable."
The IHT notes that the news comes before deadlines in April and May for Greece to refinance approximately €20 billion in debt, with total borrowing needs at €54 billion this year.
Reuters reports that Greece is urging eurozone countries to establish a 'borrowing agent' that would be set up to borrow money in financial markets and lend it on to Greece, but that Germany has rejected any such instrument.
Meanwhile, writing in the WSJ, Iain Martin argues that "The Greek crisis has been the real deal, a proper emergency for the European project...What must come, logically, is something close to a form of economic government by those states that want to stay as the inner core of the euro. It might be called by another name, but that is what it will be."
He continues, "The choice for various countries then is between trying to be part of an inner core organised around the euro with coordinated fiscal policy, or standing outside it in a trading zone built on cooperation rather than coercion...In this way that old discussion about there being two distinct Europe's inside the EU is coming back rapidly into fashion."
In the FT, Martin Wolf looks at the potential for disagreement between the IMF and the EU in a Greek rescue operation. He writes, "What happens if the IMF disagrees with the Commission? Such disagreement seems likely...Maybe no programme would succeed given the unfavourable initial conditions."
EU Commissioner for Economic and Monetary Affairs, Oli Rehn, said that the agreement to include the IMF in the rescue plan was "a very important compromise...not a perfect agreement from the view of the group". However, he stressed the importance that any rescue package "is based on European rules".
WSJ: Martin WSJ: Editorial FT: Wolf IHT Bloomberg Bloomberg 2 WSJ FT Irish Times NTV Le Monde Reuters
Open Europe's new research, which finds that EU regulation has cost the UK economy £124 billion since 1998, is reported in the Sun.
OE research OE press release OE blog
IMF Director General: Europe risks slipping into "second division" behind US and Asia
AFP reports that IMF Director General Dominique Strauss-Kahn said yesterday that: "The risk to European economies is that they are in second division, not the first, with the United States and Asia...It is likely that if the Europeans do not act quickly, within 10 or 20 years the battle will be between the U.S. and Asia, while Europe will be left for later".
Meanwhile, writing in the WSJ, Conservative MEP Malcolm Harbour and Senior Research Fellow at the Centre for European Policy Studies Andrea Renda argue that "reviving the single market and boosting its potential must be the key challenge for the years to come if Europe is not to fall irretrievably behind the new Asian powerhouses".
AFP Welt WSJ: Harbour and Renda
Report finds EU subsidies have encouraged over-fishing
Irish broadcaster RTE reports that a new study from Poseidon Aquatic Resource and the Pew Environment Group claims that EU subsidies have encouraged over-fishing and contributed to over-capacity in the industry. The report is based on an investigation into subsidies given to ten EU countries, which accounted for almost all of the €4.9 billion of EU subsidies under the Common Fisheries Policy from 2000 to 2006. According to the findings, 29 percent of the EU handouts went to measures which contributed to overfishing, such as modernisation of fleets, vessel construction, while just 17 percent was dedicated to measures to support healthy fisheries such as scrapping and temporary fishing bans.
RTE News AFP
German MEP: European Parliament's "long-term political objective" is for EU to have one seat at the UN Security Council
In an interview with the European Parliament, German MEP Alexander Lambsdorff, rapporteur for the EP on UN issues, has said it is a "long-term political objective" of the European Parliament for the EU to be represented by one seat on the UN Security Council. He also said that he thought, "in the General Assembly it will be difficult to reconcile a permanent EU President (Herman Van Rompuy) with the rotating EU Presidency (currently held by Spain but in September by Belgium)."
Europarl OE blog
El Mundo reports that six people have been jailed in Bulgaria for the fraudulent use of €7.5 million of EU funding from the agricultural programme SAPARD.
El Mundo
The Telegraph reports that a National Audit Office report reveals that that the EU and UK Government are paying organic farmers £200 million to adopt environmental measures that over half have in place already.
Telegraph
EurActiv reports that a coalition of Green NGOs have warned that the Commission's draft rules on implementing the EU's Fuel Quality Directive would allow imports of tar sand and other energy intensive oils to the EU, undermining greenhouse gas emission savings.
EurActiv FOE letter
El Pais report that according to a study conducted by the Spanish magazine Funcas, the €38 billion of EU structural funds awarded to Andalusia between 2000 and 2006 did not have any overall affect on GDP per capita.
El Pais
Handelsblatt notes that the recent proposals made by EU Foreign Minister Catherine Ashton for a new European diplomatic service, are running into opposition from member states. Spain, which currently holds the rotating Presidency of the EU, has called an emergency meeting to discuss differences.
Handelsblatt
Bulent Kenes, Editor of Turkish daily Today's Zaman, writes in the Guardian that "after a frosty prologue" German Chancellor Angela Merkel's visit to Turkey was "notably warm", despite disagreeing on sanctions against Iran. Meanwhile, Welt reports that Gerhard Schroeder, former German Chancellor, has called for Turkey to be admitted to the European Union as a full member.
Guardian: Kenes Toute l'Europe Le Monde Welt
Speaking in New York on Monday, French President Nicolas Sarkozy called for the US to "hear" and "listen" to Europe, while also claiming that insufficient regulation in the financial markets "will be the death of capitalism."
Le Monde Les Echos
The European Commission has announced that it will commit €1.2 billion to reconstruction efforts in Haiti.
Le Figaro El Mundo
EU President Herman Van Rompuy is to publish an anthology of his haiku poems in April, to be available in English, French, German and Latin, as well as the original Dutch.
Irish Times Telegraph
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.
