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13 March 2014

Integrating Europe




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Graham Bishop

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Articles from 06 March 2014 - 13 March 2014

Graham Bishop

Graham Bishop's Blog: SRM talks on verge of failure after trialogue - Final try next week
Trialogue with Barnier and Greek Presidency/Eurogroup fails to agree - again. There is little evidence that Council has given the Greek Presidency much latitude.  View Article
Graham Bishop's Blog: SRM - Final act (for 2014 at least) probably at ECOFIN on Monday
The European Parliament has thrown down the gauntlet to the Council by tabling the resolution that it intends to debate in the final plenary session before dissolution.  View Article
Graham Bishop's Blog: Stating the obvious - FT's Münchau says "national interests undermine Europe" - but he has a point!
The easy assumption that fear of war disappeared in Europe with the Berlin Wall is being challenged by Putin's actions but what can the EU do about it?   View Article

Political

Election update: Juncker to head EPP campaign; Verhofstadt confirmed as ALDE candidate; Socialists narrowly in the lead
Jean-Claude Juncker was officially nominated as the EPP candidate for Commission Presidency at the EPP Congress in Dublin. ALDE has officially confirmed Guy Verhofstadt as its candidate. Polls predict a narrow lead for the Socialists and a strong result for eurosceptic parties.  View Article
President Barroso: European recovery – Local solutions
Speaking in Athens, Barroso said it was important to work together to 'counter the myths and caricatures on Europe' and to 'refute extremist discourses'.  View Article
ALDE/Verhofstadt: "Europe lacks the courage of its convictions"
In a debate today in the EP ahead of next week's European Council, the ALDE group President pointed out that this will be the last formal summit before the European elections, yet crucial issues remain unresolved.  View Article
EPC/Zuleeg: A more effective structure for the Commission
A more effective and streamlined Commission, built around thematic clusters headed by Vice-Presidents, could be a crucial factor to help the EU to address the many fundamental challenges it faces in the coming years.  View Article
Wolfgang Münchau: Once again national interests undermine Europe
With Ukraine as with the debt crisis, the interests of the 28 Member States are not aligned, comments Münchau in his FT column.  View Article

Financial

ESM/Regling: Priority is to create a real integrated banking market again without fragmentation
Regling was interviewed i.a. on Greece, the stress tests and the IMF's future role in Europe. He underlined that countries must conclude their adjustment processes, saying that he saw this, along with Banking and Fiscal Union, as an important part of the long-term blueprint for the eurozone.  View Article
EFSF taps bond for €2 billion
EFSF has tapped a bond, initially placed on 24 July 2013 maturing on 31 July 2018, for an amount of €2 billion. This tap brings the total size of the issue to €6 billion.  View Article
Bundesbank/Dombret: The euro, the banks and the crisis – Reshaping the world of finance
Dombret argued that the banking sector needs to be aligned with the principles of market economy to ensure financial stability in the future. He also called for adequate monitoring and regulation in the insurance and shadow banking sectors.  View Article
ECB/Cœuré: Monetary policy transmission and bank deleveraging
Cœuré spoke on the necessity of properly managed deleveraging processes, highlighting that "both monetary policy and prudential supervision – notably the ECB's ongoing comprehensive assessment – have a key role to play".   View Article
Nicolas Véron: Tectonic shifts - Banking Union is a long-term process that will dramatically reshape Europe's financial system
Véron explores the origins of Europe's banking problem, tracing it back to the decade before the crisis, and the genesis of the shift towards Banking Union in 2011-12. He then gives an updated assessment of the prospects for success of the ECB's AQR and further steps towards Banking Union.   View Article
Paul De Grauwe: Why the ECJ should reject the German Constitutional Court's ruling on OMT
Writing for LSE, De Grauwe argues that the ruling reflects a serious misunderstanding of central banking on the part of the German Court, and that the ECJ should reject its conclusions. Failure to do so would undermine the effectiveness of the OMT programme and risk reigniting the eurozone crisis.  View Article
Main results of the ECOFIN Council: SRM
The Council adjusted the mandate given to the Presidency for negotiations with the EP on the establishment of a single resolution board and a single fund for the resolution of banks. It called for a conclusion of the talks on the proposed SRM in time for the plenary session on 14-17 April. (Includes comments.)  View Article
Bank resolution mechanism: MEPs welcome progress, signal crucial work remains
The lead MEPs negotiating the bank single resolution mechanism legislation signed a statement noting that some progress had been made but that there was still a great deal of work to be done.  View Article
Commissioner Barnier: Introductory remarks on the SRM
Barnier said it was imperative that the Greek Presidency be given a revised mandate, including the necessary leeway to enable an agreement with Parliament, in the coming days. He elaborated in detail on the points where he saw scope for convergence.  View Article
German finance minister Schäuble: Starting the Banking Union with healthy banks
Schäuble advocated strict separation of monetary policy and supervisory activities in day-to-day operations, and efficient decision-making processes for the SRM. The IGA proposal for the European resolution fund was legally sound, he said.  View Article
Remarks by Jeroen Dijsselbloem at press conference following Eurogroup and IGA meetings
The Eurogroup reviewed the IGA for the Single Resolution Fund, the ESM direct recap instrument, the Commission's recent recommendations on macro-economic imbalances, and the state of play in Greece, Cyprus and Portugal. (Includes link to VP Rehn's statement.)  View Article
ECB/Draghi: Introductory statement to the press conference
Draghi answered questions i.a. on NPLs, the OMT programme and the AQR. The ECB believes that the SRM mutualisation process should be speeded up and its governance should be effective, so that the resolution authority is able to make decisions 'in a matter of hours'.  View Article

Economic

Plenary Session: MEPs damp down claims of economic recovery ahead of March EU summit
In the debate on the last EU summit before the European elections, MEPs disagreed with Commission President Barroso and Dimitrios Kourkoulas for the Greek Presidency that economic recovery was on the way.  View Article
Council conclusions on the 2014 Annual Growth Survey and European Semester 2014
Economic forecasts confirm signs of a slow recovery, though modest and fragile. However, the legacy of the crisis will continue to weigh on growth for a considerable time, through high levels of unemployment, falling household incomes and rising poverty and inequalities.  View Article
ECB: External and macro-economic adjustment in the larger euro area countries
A balanced current account in the euro area has disguised sizeable net lending imbalances at the country level, exposing the common currency area to severe pressures during the financial crisis.  View Article
CER/Tilford: The eurozone's ruinous embrace of 'competitive devaluation'
The euro was supposed to put an end to competitive currency devaluations, and with it 'unfair competition'. But this has not been the case, writes Tilford.  View Article
OECD: Recovery continuing in G7 countries, but emerging economies are mixed
Recovery is under way in the world's advanced economies, underpinned by supportive financial conditions and reduced drag from budgetary tightening, according to the OECD's latest Interim Economic Assessment. However, wide disparities are still seen in Europe.  View Article
Main results of the ECOFIN Council: Taxation of savings income
The Council discussed strengthened rules on the taxation of savings income aimed at enabling Member States to clamp down better on tax fraud and tax evasion. Commissioner Šemeta expressed his disappointment that there had been no political agreement, but said the discussions had been constructive.  View Article

Member State events

Plenary Session: Troika helped to avoid the worst, but flawed structure harmed recovery
The EU/ECB/IMF Troika helped four EU countries through the crisis and prevented it from getting worse. But its flawed structure and working methods hindered national "ownership" and compromised transparency and accountability, says a resolution on the EP inquiry findings. (Includes speeches/EP group comments.)  View Article
ECFIN Economic Paper: Growth effects of structural reforms in Southern Europe - The case of Greece, Italy, Spain and Portugal
The results of this paper show that structural reforms yield significant economic gains in the medium and long run. However, the short-run gains are unlikely to be large.  View Article
Eurogroup statement on Cyprus
The outlook remains challenging and maintaining fiscal discipline remains necessary. At the same time, efforts to create the conditions for sustainable growth need to be intensified. Subject to approval, the ESM is scheduled to disburse €150 million by the beginning of April.  View Article
Bruegel/De Sousa: A year since Cyprus - So far, so good, but still too early to conclude the Cyprus programme will be successful
A year ago, EU and Cypriot officials were in tense negotiations trying to find the right balance between bailing-in and bailing-out Cyprus. Now, the likelihood of Cyprus turning out to be a second Ireland is greater than that of it turning into a second Greece or even Portugal, says De Sousa.  View Article
Sixth Activity Report of the Task Force for Greece: Stepping up implementation
The sixth activity report covers the period from October 2013 to January 2014 – a period in which important policy reforms have tangibly benefited from well-targeted and resourced technical assistance. Meanwhile, Fitch Ratings says that Greek bank recap is manageable but senior bail-in is unlikely.  View Article
Eurogroup urges Greece and Troika to conclude review this week
Eurogroup chief Dijsselbloem stressed the need for Greece and the Troika to conclude the review, which has dragged on for more than 170 days. "It is important for us, and especially for Greece, that the Troika and the Greek government arrive at an agreement very soon", he said prior to the meeting.   View Article
BoG: 2013 Stress test of the Greek banking sector - Top banks need €6.4 billion in extra capital
Greece's major banks must raise an extra €6.4 billion in capital to make themselves strong enough to deal with the fallout from future crises, the central bank said.  View Article
BBC: Matteo Renzi proposes big tax cuts and electoral reform
Italy's new Prime Minister Matteo Renzi has proposed a sweeping package of tax cuts, in a bid to revive the country's economy. In his first full news conference, he insisted the package would not breach EU budget deficit limits.  View Article
Germany acknowledges current account surplus as problem
The German Economics Ministry has published a document in response to the Commission's economic imbalances analysis. The document recognises that "excessive and prolonged imbalances" in the trade balances of certain European countries has been "detrimental to the stability of the eurozone".  View Article
Robert Schuman Foundation/Sarkozy: The Franco-German friendship is vital for Europe
The former French president called for 'more integration for the Europe of the euro, less integration for the European Union'. "This is a paradoxical choice we have to make", he said.  View Article
George Soros: It is time to stand up for the European Union
Right now the UK has the best of all possible worlds. Any change would be for the worst, writes George Soros for the FT.  View Article
FT: Austria warns costs of bank bailout rising
Austria's central bank governor has warned that attempts to wind down regional lender Hypo Alpe-Adria could cost a further €3.6 billion this year, potentially pushing the national budget deficit above the key 3 per cent limit.  View Article





© Graham Bishop


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