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30 January 2014

Integrating Europe

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Articles from 23 January 2014 - 30 January 2014


European elections: Still no EPP front-runner; primary 'debacle' for Greens
With Ska Keller and José Bové, the Greens have chosen their top candidate duo in a primary with disappointing participation. EPP's Viviane Reding has declared she will not be running for Commission President and is backing Juncker. The probable influx of eurosceptics remains a debated topic.   View Article
President Barroso: "Let's fight together for a stronger, more united and open Europe"
Barroso said: "This is the moment to mobilise all the pro-European forces and not leave the initiative in the hands of the doomsayers on all sides of the political spectrum".  View Article
Reuters: Germany's Schäuble signals support for eurozone parliament
Schäuble has said he is open to the creation of a separate European Parliament for countries using the euro, a step that could deepen divisions within the EU.  View Article
CEPS/Lannoo: Descent from Banking Union to political chaos
The huge progress towards a more unified structure of banking supervision and resolution pales against the prospect of the expected outcome of the EP elections in May, where anti-European parties are predicted to make strong gains.  View Article
EPC, Bertelsmann Stiftung & CEPS: Legitimising EU policymaking - What role for national parliaments?
This discussion paper argues that focusing on domestic responsibilities would be the most straightforward and effective way for national parliaments to strengthen their direct involvement in EU policy formulation.  View Article


Remarks by Jeroen Dijsselbloem & VP Rehn at Eurogroup press conference
The Eurogroup's main priorities for the coming months will be i.a.: to complete the Banking Union; to finalise the operational framework for the ESM direct recapitalisation instrument; and to finalise the SRM/SRF negotiations.  View Article
Bundesbank calls for capital levy to avert government bankruptcies
Germany's Bundesbank said that countries about to go bankrupt should draw on the private wealth of their citizens through a one-off capital levy before asking other states for help.  View Article
Bundesbank/Dombret: Striving to achieve stability – Regulations and markets in the light of the crisis
Dombret spoke on the balance between market forces and regulation, pointing out the grey area of systemic risk and necessity for resolution mechanisms. He proposed a ceiling on lending to any one government, and said further regulation was needed in the area of shadow banking and insurance.  View Article
GCC could delay its ruling on the OMT until April
The German Constitutional Court could delay its ruling on the OMT, the ECB bond-buying programme, until April due to serious disagreements in the second Senate of the court. Bank of America says there is a "relatively high" risk that the Court will rule that the OMT is illegal as designed.  View Article
Katinka Barysch: Europe's top-down myopia
Writing for Project Syndicate, Barysch argues that the eurozone does not need fiscal or political union; the institutional framework just needs to be strong enough to enable markets to (re)act, while offering real help to countries that find themselves temporarily in trouble.  View Article
Bruegel/Merler: Banking Union and beyond
The economic session of the Brussels Think Tank Dialogue 2014 reviewed the progress on Banking Union so far and asked what else was missing in the EMU architecture to complement and enhance the reforms on the financial side.  View Article
Pâris & Wyplosz: The PADRE plan - Politically Acceptable Debt Restructuring in the Eurozone
The PADRE plan would substantially lower eurozone nations' debts without cross-nation transfers and with limited moral hazard. The financing is simple. Each eurozone member's debt is reduced by the securitisation of its own share of ECB seignorage.  View Article
IMF/Viñals: Finish the job on financial regulation
Writing on the IMF's blog, Viñals says that big banks still pose a threat to the world financial system because there is a general assumption that governments will come to their rescue in case of trouble  View Article
Peterson Institute/Rediker & Ubide: The IMF is courting new risks with a change in policy on debt restructuring
The IMF is expected to release shortly a follow up to last year's controversial staff paper on sovereign debt restructuring, which could dramatically alter how countries borrow and the risks for investors who lend to them. This is likely to create more problems than it solves.  View Article
Results of the ECOFIN Council: SSM, Presidency work programme
The Council was briefed by the ECB on implementation of the EU's single supervisory mechanism for banks. Supporting economic growth and employment and restoring confidence in the financial sector are the main objectives of the Hellenic Presidency.   View Article
European Commission: TTIP - Cooperation on financial services regulation
The EU believes it is in the interests of both the EU and US to agree within the TTIP on a framework for regulatory coherence in financial services.  View Article
Reuters: Eurozone may scrap option of direct bank recapitalisation in 10 years
Eurozone governments are considering inserting a "review clause" into their agreement on the direct recapitalisation of banks so that they can reverse or renegotiate the deal in the coming years.  View Article
Bundesbank/Dombret: The state as a banker?
Dombret called for credible bail-in procedures through higher capital buffers. He maintained that the state was not a good banker, and that it should only take on this role in exceptional cases.  View Article
WEF 2014: Rebuilding banking in Europe
With capital flows sharply in reverse, how should Europe's banking system be reformed? Speakers at the WEF on this topic included Wolfgang Schäuble, Lord Turner, Olli Rehn and Jeroen Dijsselbloem.   View Article


Parliamentarians call for more legitimacy in economic policy-making in the EU
Parliamentarians want to ensure that measures aimed at reining-in budget deficits and public debt take into account the social dimension. They pointed out that as they are run today, austerity programmes for bail-out countries lack democratic legitimacy.  View Article
ALDE: 2014 European Semester - No complacency in implementation
ECON adopted a report on the 2014 EU economic priorities set by the European Commission in November 2013 at the launch of the fourth European Semester. ALDE said: "We can and we must do more to boost our economies' competitiveness and growth".  View Article
EPC/Zuleeg: A new deal for growth and jobs in the eurozone revisited
Commenting on IMF MD Lagarde's book, "Jobs and Growth: Supporting the European Recovery", Zuleeg writes that as the risk/threat of a collapse of the eurozone is off the table, Europe needs to deal with its dual growth crisis: low aggregate growth and a divergent economic performance.  View Article
CEPS/De Grauwe: Yes, it's the economy, stupid, but is it demand or supply?
De Grauwe writes that as the recent trip to Damascus of François Hollande indicates, European policy-makers are determined to cure a demand-side problem by focusing exclusively on supply-side medicine.  View Article
Simon Nixon: Europe can be optimistic—in the long term
Writing for the WSJ, Nixon says that reform won't be easy or go as far as some hope. But on a 10-year view, the direction of travel seems clear—and a reason to be upbeat.  View Article
EPC/NotreEurope: The TTIP negotiations - A Pirandello play
This report is based on a seminar organised by',WIDTH, 300, SHADOW, true, FADEIN, 300, FADEOUT, 300, STICKY, 1,DURATION,3500)" onmouseout="UnTip()");">Notre Europe and the EPC, during which key issues of the current TTIP negotiations were explored, such as geo-economic and geo-strategic goals, rules, main players and impact on world trade.  View Article
IRSG: Implications of a Financial Transaction Tax for the European regulatory reform agenda
In its current design, the FTT is likely to conflict with rather than complement a number of key regulatory initiatives aimed at increasing financial stability in the financial services sector. It is also likely to fail in achieving its own policy objectives.  View Article
WEF 2014: Global economic outlook
The outlook for the global economy is "cautiously optimistic", leading financial experts told participants at the 44th WEF Annual Meeting, although they warned that old and new risks were still present and the coming year would bring volatility. A further discussion took place entitled 'Is Europe Back?'  View Article
ECFIN: Economic and Monetary Union – Main Legal Texts 2014
This compilation, issued by the European Commission, brings together core legal texts on the EMU and the euro.  View Article

Member State events

ECON Committee: Troika inquiry - Workers and business differ on verdict, call for more dialogue
Strikingly different verdicts on the crisis rescue work of the EU Commission/ECB/IMF "Troika" were voiced by business and trade union representatives at an EP inquiry hearing.  View Article
Kathimerini: Troika says Greece must dismantle barriers to competition for review to conclude
The Troika has warned Greece that the ongoing review of its adjustment programme will not be completed in February unless Athens adopts the dozens of OECD recommendations for removing regulations that distort competition.  View Article
Portuguese budget below target set last May
Maria Luis Albuquerque from the Finance Ministry said the deficit in 2013 would be around 5 per cent of GDP, approximately €1,750 million below the limit agreed with the Troika.  View Article
ECFIN: Financial assistance programme for the recapitalisation of financial institutions in Spain. Fifth review - Winter 2014
The FSP formally concluded after 18 months on 22 January. This final report provides an assessment of the progress during the last phase of the programme implementation, and takes stock of the remaining challenges for the financial sector and the Spanish economy as a whole.  View Article
Spanish finance minister pitches a "country on the mend" scenario to MEPs
Speaking at the ECON Committee, Spain's finance minister Luis De Guindos painted a bright picture of Spain's economic progress, saying that reforms underway allowed a "moderately optimistic" outlook.   View Article
President Barroso's remarks following his meeting with Italian PM Letta
Barroso praised the progress made in Italy, saying that the crisis strategy was showing results. He welcomed the Italian Council Presidency later in 2014 and assured Letta of the Commission's continued support.   View Article
German government: Clear work plan for the future
Chancellor Angela Merkel and Federal Economics Minister Sigmar Gabriel presented the coalition government's programme for this year. Merkel said in her State of the Nation address that EU integration and US relations are among the main challenges for the new term.  View Article
Statement by the French-German Economic and Financial Council (FGEFC)
The 46th FGEFC met to discuss the economic situation in the EU and the eurozone, and to exchange views on the economic strategies being implemented in France and Germany.  View Article
Reuters: Hardest yet to come for France's Hollande on reforms
Hollande has won cautious backing from Berlin, Brussels and financial markets for a centrist reform push that could be his last chance to get the eurozone's second largest economy motoring. However, Latvia's Finance Minister has criticised Hollande's lack of action.  View Article
FT editorial: The City and the European Union
When the spectre of Britain leaving the EU is raised, big financial institutions would rather see the UK stay in and fight its corner than depart.  View Article
ECOFIN Council opens excessive deficit procedure for Croatia
The Council opened an excessive deficit procedure for Croatia, adopting a decision on the existence of an excessive government deficit as well as a recommendation setting out measures to be taken to correct the deficit by 2016. (Includes VP Rehn comments.)  View Article
WSJ: Czech President names new coalition government; Sobotka premier
Czech President Milos Zeman has appointed a new centre-left, three-party government, ending arduous and lengthy coalition-building talks after the country's parliamentary election at the end of October.   View Article

© Graham Bishop

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