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10 October 2013

Integrating Europe - 10th October 2013




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Graham Bishop

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Articles from 03 October 2013 - 10 October 2013

Graham Bishop

Graham Bishop: Timeline to Merkel III German Government and EU policy developments
"Europe" has been on tenterhooks for this election for many months – but now the outcome seems inconclusive!  View Article

Political

President van Rompuy: We have been seeing a Europeanisation of national policy
In a speech in front of the French Assemblée nationale, van Rompuy called upon the French to cooperate with Germany to further the European project, stressing in particular the importance of a strengthened economic and monetary union.  View Article
Commissioner Šemeta: Europe at a crossroad
Šemeta spoke about the inevitable changes the EU is undergoing, and about the need for a multi-speed Europe and a more political Commission.  View Article
Enrico Letta: Europe's responsible solidarity
Letta writes that next year's change of top EU personnel represents an ideal opportunity to debate what Europe stands for, and how to create a more stable, integrated and prosperous union – one based on solidarity, interdependence and enlightened self-interest.  View Article
Policy Network/Priestley: Stopping the populist advance on the European Parliament
Priestley argues that the cardinal error would be for left, centre and right to defend 'our Europe right or wrong', and everything done in Europe's name, against the europhobe hordes.  View Article
Bruegel/Merler & Wolff: Europe should ask the US to shut down political uncertainty
The authors look at the debt ceiling discussion and its impact on Europe. They urge the US to end its 'highly dangerous game' before it risks shutting down the European economy along with its own.  View Article

Financial

Barnier says ESM could take on banking resolution
Barnier has suggested the bloc's executive Commission could take on the role of the new banking resolution agency for a limited period only, later handing over the role to the ESM.  View Article
ECB/Draghi: Europe's pursuit of 'a more perfect Union'
Rather than the phrase 'ever closer union', Draghi said that the agenda facing Europe today was better encapsulated by wording borrowed from the Constitution of the United States: the establishment of a 'more perfect union'.  View Article
VP Rehn's blog: Banking on a sustainable recovery in Europe
"Cleaning up balance sheets is a pre-condition for growth but also for resuming the path towards more genuine financial integration in Europe, namely through the creation of the Banking Union."  View Article
FT: EU Banking Union faces fight over safety net funding
Europe's Banking Union project faces a protracted fight over who pays to repair the system, as the EU debates public backstops to plug any holes exposed by next year's stress-test of lenders.  View Article
FT: Setback for Brussels as lawyers back Berlin line on Banking Union
Brussels' blueprint for European Banking Union has suffered a serious setback after the legal adviser to EU finance ministers sided with Germany and concluded the proposed manner of centralising some powers to shut banks breached the law. (Includes Schäuble comment.)  View Article
WSJ: EU states divided on planned bank resolution mechanism
The fear is that under the current plan, a government could be forced to spend money winding down one of its banks against its will.  View Article
WSJ: Germany's Schäuble - Structural reforms remain critical
Structural reform remains paramount and excessive liquidity has its limitations in helping promote economic growth, said Finance Minister Wolfgang Schäuble.  View Article
ESM issues inaugural long-term bond
ESM has launched its long-term funding programme with a €7 billion five-year benchmark bond with a coupon of 1.25 per cent, maturing on 15 October, 2018. The programme is expected to amount to €9 billion in 2013 and €17 billion in 2014.  View Article
Peterson Institute/Ubide: How to form a more perfect European Banking Union
This Policy Brief argues that although some aspects of the current Banking Union project will improve the soundness of the euro area banking system, potential unintended consequences may flow from the project, which many analyses have overlooked.  View Article
Bruegel/Darvas & Merler: The European Central Bank in the age of Banking Union
In addition to the ECB's primary objective of price stability, and secondary objective of supporting EU economic policies, the authors also identify 10 new tasks related to monetary policy and financial stability.  View Article
Bruegel/Wolff: European level supervision and regulation required for monetary union
A plan has been launched to create a Banking Union but it is a slow process – like trying to get fire insurance when the house is already burning.  View Article
Simon Nixon: High hopes, and hurdles, for bank supervisor
Success hinges on the ECB's ability to face down powerful political interests, an unprecedented test of its bureaucratic skill, writes Nixon for the WSJ.  View Article
EPC/Zuleeg: The bank credit crisis and its impact on growth
In this Commentary, Zuleeg argues that a Banking Union, if implemented, would be a step in the right direction but will not produce the results needed in the short term to help the economic recovery of crisis countries.  View Article
CEPS/De Grauwe & Ji: The legacy of austerity in the eurozone
The authors argue two points: the improvement in the eurozone business cycle is the result of the ECB's announcement of its OMT programme; and austerity has left a legacy of unsustainable debt that will test the political resilience of the debtor countries.  View Article
IMF says countries should 'buckle up', the move to financial stability could be bumpy
"Investors' faith in euro area bank balance sheets must be restored ... and Banking Union completed", the IMF has said in its latest Global Financial Stability Report.  View Article
IMF: Central banks can plan smooth exit from policies to fight crisis
The IMF's latest paper takes stock of unconventional monetary policies and focuses on their global impact so far, looking ahead towards exit challenges and prospects for global policy collaboration.  View Article

Economic

Dijsselbloem, Rehn, Asmussen, Regling & Hoyer: Europe's crisis response is showing results
In a joint commentary for the WSJ, the authors write: "This could be the turning point that we cannot afford to miss. Our success depends on carrying through on the modernisation of our economies and the reduction of public debt."  View Article
ECB/Cœuré: The economic consequences of low interest rates
Cœuré focused on the correlation between two facts – low monetary policy interest rates and low returns on safe financial assets.  View Article
CER/Tilford: Eurozone recovery - The world is not enough
The basic problem is that the world cannot accommodate a Europe refashioned in Germany's image, comments Tilford.  View Article
FT: EU bank bailout tax debate heats up in Germany as SPD enters fray
Germany's opposition Social Democratic party wants the FTT imposed to finance a common European resolution fund to bail out or wind up ailing lenders, making it one of the possible trade-offs that emerge in a coalition deal.  View Article
ECFIN/TAXUD 2013 report: Tax reforms in EU Member States - Tax policy challenges for economic growth and fiscal sustainability
This report analyses i.a. potential challenges that Member States are currently facing in areas of taxation where policy is expected to have an impact on macro-economic performance in terms of GDP, employment and fiscal sustainability, and may impact macro-economic stability.  View Article
Global growth patterns shifting, says IMF WEO
Global growth is still in low gear and the drivers of growth are shifting, says the IMF's latest World Economic Outlook (WEO) report. The euro area is expected to pull out of recession gradually, with growth reaching 1 per cent in 2014.  View Article

Member State events

Fitch: Cyprus bank recaps should boost confidence, risks remain
Although the completion of the recapitalisation and restructuring process for the Cypriot banks should improve confidence and contribute to funding stability in the system, the banks will remain vulnerable to funding and liquidity risks, says Fitch Ratings.  View Article
Cyprus Mail: Banks could need additional capital - Moody's
Cypriot banks and cooperatives could face capital needs that exceed by some €1.5 billion the €2.5 billion of EU support funds earmarked for the banking sector, Moody's ratings agency said.  View Article
WSJ: IMF sees Greece missing 2014 bailout budget target
Greece is projected to miss a key bailout target for next year, according to the IMF's latest Fiscal Monitor report. This is likely to complicate already-fraught negotiations over the next tranche of financing for the ailing economy.  View Article
WSJ: Greek draft budget sees primary surplus, return to growth
The Greek government has presented a draft budget that forecasts a return to growth next year and an operating surplus that Athens hopes will allow it to return to bond markets for the first time since the debt crisis began.  View Article
Statement by the Commission, ECB and IMF on the eighth and ninth review mission to Portugal
Staff teams visited Lisbon between September 16 and October 3 for the combined eighth and ninth quarterly reviews of Portugal's economic adjustment programme. There are early signs of a recovery in economic activity.  View Article
Reuters: Italy cabinet approves emergency decree to trim 2013 deficit
The Italian government approved emergency measures on Wednesday aimed at keeping this year's budget deficit inside the EU's ceiling of 3 per cent of national output.  View Article
Wolfgang Münchau: Italy's chance to realign – or mess things up further
Letta's urgent task is to fix the banks, and this will test his ability to tackle vested interests, writes Münchau in his FT column.  View Article
ECFR/Francescon: Enrico Letta's victory
On 2nd October, Letta and his government passed a vote of confidence with a large majority both in the Senate and in the Lower House. The EU supported Letta unanimously, as he had proved to be a committed European supporter.  View Article
Coalition talks in Germany progress slowly
Exploratory talks are taking place between the CDU and both the Social Democrats and the Greens. Despite Angela Merkel's urgency to form a new government, talks are expected to go on for many weeks. A grand coalition is the widely expected outcome, favoured by 46 per cent of the German population.  View Article
Exploratory talks in Germany - the long route to the next coalition government
Angela Merkel's CDU is meeting with representatives of the SPD and the Green Party to explore the options for forming a coalition government.  View Article
European and foreign policy changes under Merkel III?
While the world awaits the formation of a new German government, there is much speculation as to how Germany should use its strong position, both in the EU and with the transatlantic partnership. However, Merkel is not expected to change her steady-hand approach for a bolder or more visionary one.  View Article
Strong 'National Front' showing in French by-election alarms Socialists
The ruling Socialist Party took the resounding win of the extreme right-wing National Front with 40.4 per cent of the vote in the canton of Brignoles as a 'very serious warning', and urged voters to block the far-right candidate in the second round.   View Article
TheCityUK/Grimstone: The existential importance of the European debate and the active role the City must play in this
"I do not believe the City's pre-eminent position will survive if we lose our role as Europe's financial capital, and I do not believe we can maintain that position if we are not part of the Single Market."  View Article
European Movement/Fassoulas: A prosperous Britain at the heart of the EU
Fassoulas issues a rallying call to those who believe Britain is better off in a better Europe. His 'holistic' approach focuses on the quartet of "Facts – Emotions – Danger – Hope".  View Article
British Influence/Nathan: Clegg issues "call to arms" for a better Europe
Nick Clegg, the UK's Deputy PM, has issued a "call to arms" to British businesses, charities, organisations and politicians to show their support for Britain's continued membership of a better EU.  View Article
BBC: Slovenia may seek help for its faltering banks
The head of Slovenia's central bank, Bostjan Jazbec, has said it will consider asking for outside help if the country's funding costs stay high. His comments are likely to fuel speculation over whether Slovenia will be bailed out by the EU.  View Article
WSJ: Dutch budget talks in trouble as another party walks away
Talks between the Dutch government and the opposition entered a crucial phase on Wednesday, calling into question the government's ambition to rally support for next year's budget and prevent a standstill on reforms needed to shore up public finances.  View Article





© Graham Bishop


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