Europe
Moody’s warns France it could lose AAA rating
Ratings agency Moody’s yesterday downgraded ratings for two Spanish regions, five Irish banks and announced it is considering downgrading 30 Spanish banks and Portugal’s long-term debt rating. Bloomberg reports that France is also at risk of losing its AAA rating. Costs to insure French government debt trebled this year, rising to an all-time high yesterday, according to data provider CMA.
Pimco, the world's largest bond fund, has called on Greece, Ireland and Portugal to step outside the eurozone temporarily and restructure their debts unless the currency bloc agrees to a radical change of course, reports the Telegraph. Handelsblatt reports that despite the bailout, Ireland’s problems are deepening, noting that 10% of real estate loans are considered critical.
FTD looks at China’s increased involvement in the eurozone, after it announced a "strategic partnership" with Greece. Reuters quotes Chinese vice-PM Wang Qishan at a meeting with EU Commissioners in Bejing saying, "China has taken concrete actions to help some European countries deal with their sovereign debt crisis".
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Cameron: UK liable for eurozone bailouts until 2013
Speaking to MPs in Parliament yesterday, David Cameron confirmed that the UK would be liable for further eurozone bailouts until a permanent bailout fund comes into force in 2013. He said, “We should not have any liability for bailing out the eurozone when the new permanent arrangements come into effect in 2013. With the current emergency arrangements, established under Article 122, we do.” Mr Cameron added that Britain “stands ready to do whatever is required to return the eurozone to stability” and that it “was profoundly not in Britain's interests to see the break-up of the eurozone”.
Cameron also outlined his proposal for a cap on the EU budget up to 2020. The Guardian argues, “Mr Cameron would be uncharacteristically naive if he thought his budgetary real-terms freeze campaign is either in the bag or that it may not bite back at him in the future…there are no signatures on the deal yet, just promises.”
In a recorded conversation with Telegraph journalists, Liberal Democrat Business Secretary Vince Cable said of the Coalition Government, “There are some arguments we’ve won, big arguments, on civil liberties issues and questions over Europe”.
Germany opposes tougher eurozone bank stress tests
Reuters reports that the ECB is backing the Commission to include a liquidity criterion in the new round of eurozone bank stress tests due next year, but according to EU sources, they face opposition from Germany.
The Guardian reports that the European Commission has overturned a UK Revenue and Customs verdict on artworks by Dan Flavin, meaning they will liable to full VAT, which rises to 20% on 1 January. As sculpture the pieces would be subject to only 5% VAT.
EP President blames national leaders for declining support for EU
FTD reports that European Parliament President Jerzy Buzek has blamed European governments for increasing euroscepticism, saying, “People look in the first place to their national leaders. The support for European integration isn't as strong as 20 years ago.” He also slammed the proposal by five EU countries to freeze the multi-annual EU budget, saying this could lead to a “political crisis”.
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UK targets role at head of EU markets supervisor
Handelsblatt reports that EU diplomats have said that the UK wants the chairmanship the European Securities and Markets Authority, in order to prevent the French government from exerting political influence on the body. The London-based European Banking Authority is expected to be chaired by a Frenchman. The Commission has confirmed that the positions of chairman of the three new EU financial supervisors will be probably be announced in April 2011, not January as p-planned.
EU Justice Commissioner, Viviane Reding, has confronted the US over data protection rights in the fight against terror, accusing the US of being interested only in accessing European citizens' bank records and flight schedules but not in protecting their rights while doing so, reports the Guardian.
Handelsblatt looks ahead at the upcoming Hungarian Presidency, noting that priorities are the economic consolidation of Europe and energy policy. Also the enlargement of the Schengen zone to Romania and Bulgaria is a priority.
EUobserver reports that talks to link greenhouse gas emissions trading systems (ETS) in the EU and Switzerland are set to start early next year. Meanwhile, a leader in FAZ argues, “In a world in which many states are not prepared for comparable climate goals, the EU can’t run ahead with harder obligations on itself.”
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