20 January 2014

European Integration Monitor - December 2013

Voter concerns about the EU level economy are diminishing rapidly. Five pieces of financial services legislation ‘in the bag’ in December. Six Pack and Two Pack get underway. Parliament starts to examine the Troika process.

This month in brief

Politics

• Voter concerns about the EU level economy are diminishing rapidly - down by a third from the peak – so economic developments may take some of the wind out of the sails of the ‘euro-antis’.

• An early attempt to gauge the result of the EP election puts the EPP slightly behind S&D so the battle to get the required Parliamentary votes for a Commission President candidate may be very difficult.

• EP President Schulz – with strong backing across the political spectrum in the EP – threw down a direct constitutional challenge to the Member States in Council.

• UK footnote: more comments that Cameron’s negotiating position is wishful thinking; increasingly likely that British sovereignty – epitomised in the banking union voting arrangements – actually hangs on the internal coalition squabbles of some small states. 

Finance

• Big Success for Lithuanian Presidency: Five pieces of financial services legislation ‘in the bag’ in December – BRRD; DGS; MiFID and SRM 

Economics

• Linking pension benefits to longevity can nearly halve the costs.

• Six Pack and Two Pack get underway: Council agrees to launch 16 in-depth reviews and give opinions on 5 progress reports.

• ECFIN report highlights the significant gains to come from ‘structural reform’.

• Commission VP Rehn highlighted the smaller fiscal consolidation effort needed in 2014, and the“extraordinary Eurogroup meeting where ministers discussed about each other’s budgets with rigour and in a true spirit of partnership”. 

Budgets

 

• Parliament starts to examine the Troika process.
• Spain successfully exits ESM financial assistance programme after drawing down only €41 billion of the possible €100 billion bank assistance.
• Ireland successfully exits its Programme – public debt declining, growth rising.
• Portugal: Programme broadly on track.
• Greece: achieved the four milestones so “second sub-tranche of the fifth instalment” paid but PM Samaras aims for decision on debt relief in April.
• Cyprus: Programme is on track. All fiscal targets have been met with considerable margins

© Graham Bishop