Tuesday, February 15, 2011

Open Europe


Head of European Banking Authority: European banks will face more “top-down” regulation
In an interview with the FT, Andrea Enria – chair of the European Banking Authority – said the EBA will use its new powers to impose more uniform oversight on European banks through the adoption of a single set of rules. He argued: “I think now it has to be a little bit more top-down […] The senior people here should engage in real policy discussions, take decisions and make things happen. The ‘single rulebook’ is the true power. If we start having regulatory competition again, it will be havoc.” A top London-based executive at a global bank is quoted by the paper saying: “In five years, we’ll be talking to the EBA and Brussels. The FSA will be an afterthought.”
Open Europe research FT FT 2 Telegraph
Eurozone finance ministers agree on €500bn permanent bailout fund but crucial details remain unclearIt is widely reported that eurozone finance ministers yesterday agreed that the permanent bailout mechanism would be able to lend €500bn. The details of the funding, in terms of contributions and capital buffers, are not yet clear; however, Jean-Claude Juncker, Luxembourg’s Prime Minister, confirmed it will be designed to lend the full amount unlike the current bailout fund. No agreement was reached on other details of the mechanism, such as whether it will be allowed to buy government bonds, a proposition which both Germany and the Netherlands oppose. Elsevier quotes a spokesman of the Dutch Finance Ministery saying: “there is no agreement at all. We’ll only have that when we have an agreement on everything.” Euractiv quotes Luxembourg Finance Minister Luc Frieden saying "We are probably too slow to take the relevant decisions”. The meeting also failed to yield an agreement on expanding the current bailout fund or the ‘pact for competitiveness’.
During a meeting with Angela Merkel, the German Chancellor, yesterday Enda Kenny, Fine Gael leader, stated that a Fine Gael-lead government would “not contemplate, in any circumstances, moving” on the tax question. Despite this, German officials refused to rule out an agreement on taxes: “Everything depends on everything else and we’re not interested in one individual issue being factored out,” said a close political adviser to Merkel.
Meanwhile, GDP figures released yesterday show sluggish growth in Q4 2010 across the eurozone. A contraction in the Portuguese economy increased fears that it will need a bailout and pushed bong yields higher. Zach Witton, an economist at Moody’s, the rating agency, forecast on Monday that “Portugal will seek assistance from the EU’s bail-out fund by the second quarter of this year at the latest”.
In an interview with FAZ Mario Draghi, head of Italy’s Central Bank, suggested that “everyone should follow the German example” of prioritising stability politics and that he supports the Fraco-German notion of a competiveness pact. He also states that he opposes Eurobonds and does not regard the eurozone as a fiscal union. Handelsblatt reports that the French government would support a German for head of the ECB but does not see Draghi as a suitable candidate. In an interview with Les Echos, ECB President Jean-Claude Trichet has said that he would not extend his mandate if eurozone governments failed to agree on the name of his successor.
ECB executive board member Lorenzo Bini-Smaghi said in a speech: “It would be risky for the euro area to move to greater fiscal and budgetary integration in order to avoid the instability associated with the current system … the new regime could import new problems which might be politically even more difficult to tackle.”
IHT FT European Voice Euractiv Lepoint BBC EUobserver Le Monde BBC: Today Les Echos La Tribune Le Figaro Le Monde ECB: Bini-Smaghi El Pais El Pais 2 El Pais 3 Irish Times Irish Independent  Irish Independent 2 Guardian Handelsblatt Elsevier Euractiv 2 Lepoint Frankfurter Allgemeine  FT 2 FT 3  Jornal de Negocios Focus Frankfurter Rundschau FT 4 Irish Times 2 Irish Times 3 Irish Times 4 IHT: Politicus Les Echos: Trichet
A leader in the WSJ argues, “Governments in Athens, Dublin or Madrid may be cheering that they won't have to deal with Mr. Weber at the helm of the ECB. But his isolation at the governing council and his premature departure suggest a worrisome philosophical shift at the European Central Bank”. “A eurozone that Mr. Weber doesn't feel comfortable leading is one that should make anyone with a stake in the success of the single currency nervous”, the article concludes.
WSJ: leader
Intereconomia HLN WSJ
Judges at the European Court of Human Rights will not have the final say on whether prisoners should be given the vote, Attorney General Dominic Grieve said last night.Mail
The Council of Ministers yesterday agreed on an EU wide patent, but due to opposition from Spain and Italy the decision was made under ‘enhanced cooperation’, meaning that not all 27 member states will take part.El Pais
Catherine Ashton proposes mobilising €2bn from the European Investment Bank to support democratic reforms in Tunisia and EgyptWriting in the FT, the EU’s Foreign Minister Baroness Catherine Ashton proposes reviewing the EU’s neighbourhood policy, mobilising up to €1bn this year, a potential further €1bn from the European Investment Bank and providing a possible €1bn of financing through the existing resources of the European Bank for Reconstruction and Development to support democratic reforms in Tunisia and Egypt.
FT: Ashton Irish Times: Beesley Spiked: Prengel
Il Corriere della Sera reports that Italian Interior Minister Roberto Maroni has accused the EU of “not doing anything” to help Italy cope with the thousands of Tunisian refugees arriving on its shores.
Corriere della Sera Repubblica EUobserver EUobserver 2 BBC Irish Times Welt Tagesschau
Trouw reports that this week a motion will be presented to the Dutch Parliament, calling for the Dutch PM to take a tougher stance on EU affairs. FD Selections reports that there is a large majority in the Dutch Parliament who fear that the Netherlands is being dragged into a political union. Elsevier quotes Dutch Finance Minister Jan Kees de Jager saying that the Franco-German ‘pact for competitiveness’ "shouldn't be a diktat".Spiegel Trouw FD Selections Elsevier
The Mail reports David Cameron is “furious” that Business Secretary Vince Cable has failed to find a way of halting EU legislation giving temporary staff the same salaries, holidays and overtime pay as their full-time counterparts after 12 weeks in employment. The measures, agreed by the previous government, are due to come into force in October, and a report by the British Chambers of Commerce has estimated they will cost businesses around £1.5billion a year.
The FT reports that Prime Minister David Cameron has been warned by his coalition partners that adopting an “empty chair” policy, while eurozone countries led by France and Germany take key economic decisions, could lead to Britain being “sidelined in a two-speed Europe”.FT
The FT’s chief political commentator Philip Stevens challenges the widespread conviction among most politicians that not adopting the euro has better enabled Britain to cope with the consequences of the global economic recession, saying that economic indicators point to an “uncomfortable reality […] that eurozone countries against which Britain more naturally measures its performance have suffered less as a consequence of the crash”.FT
The EU’s Commissioner for Telecommunications Neelie Kroes has said that she would probably seek new regulations to end the high charges Europeans face when using data services on smartphones outside their home countries.IHT
FT Deutschland reports that rating agency Moody’s is about to conduct a thorough review of the credit rating assigned to banks and financial institutions. This could have serious consequences for many state assisted institutions, as the review will only take into account the institutions’ own financial strength, which could lead to downgrades for many banks around Europe.FT Deutschland
EUobserver reports that EU finance ministers will today discuss a coordinated freeze of assets belonging to members of ousted Egyptian leader Hosni Mubarak’s regime.EUobserver
La Repubblica reports that the Milan court has announced that Italian Prime Minister Silvio Berlusconi’s trial will start on 6 April. Berlusconi is charged with abuse of power and aiding and abetting underage prostitution.Repubblica

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