Integrating Europe - 3rd October 2013

03 October 2013



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Graham Bishop

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Articles from 26 September 2013 - 03 October 2013

Graham Bishop

European Integration Monitor September 2013 - Inaugural edition
The driving forces of politics, finance, economics and budgets are a powerful cocktail that will intensify in the years ahead. In these notes, Graham endeavours to highlight the incremental content rather than give a balanced summary.  View Article
Financial World: Keeping the funds flowing (Graham Bishop article)
Graham Bishop recommends support for the shadow banking sector rather than too draconian a regulation that strangles the good parts.  View Article

Political

President Barroso: Repatriation of powers "impossible"
David Cameron's plan to scrap an "ever closer" EU and to renationalise powers back to Britain is "doomed to failure", Barroso said. Meanwhile, the Commission unveiled ambitious plans towards making EU law 'lighter'.  View Article
Commissioner Barnier: Euroscepticism needs to be taken seriously
Barnier has said that eurosceptic arguments should be taken seriously and that a debate about "what could be done less in Brussels" was needed in the coming years.  View Article
President Van Rompuy: "The State of Europe - Tough choices for a troubled Europe"
Speaking at the Friends of Europe's high-level roundtable, Van Rompuy listed three important lessons he said he had drawn from the experience of the past four years.  View Article
LSE/de Grauwe: Design failures in the eurozone - Can they be fixed?
De Grauwe analyses the nature of the design failures of the eurozone, concluding with some thoughts on political unification.  View Article

Financial

Bundesbank/Dombret: Holistic approaches to solving the "euro crisis"
"Steps are needed that encourage each part of the system to behave responsibly, while at the same time making the system more robust against failures of its constituent parts."  View Article
Speech by EBA/Enria at ESE Conference: The new role of the EBA in the Banking Union
The tasks of the EBA remain fundamentally the same, but the Banking Union represents a major shift in the institutional set-up, which is triggering an important adjustment for the EBA.  View Article
Speech by ECB/Mersch at the ESE conference: A regime change in supervision and resolution
Mersch discussed how to ensure that Banking Union was 'not just a label', and that it was able to initiate a genuine regime change in the way banks are supervised and resolved.  View Article
Speech by Bundesbank/Lautenschläger at ESE conference: Supervisors without borders
"The Banking Union can succeed only if every single one of us, supervisors and supervised alike, is ready to take action and welcome the new."  View Article
ECB/Cœuré: Implications of bail-in rules for bank activity and stability
Cœuré's speech focused on the BRRD and in particular the introduction of creditor-funded recapitalisation - otherwise known as bail-in. He looked at how this is likely to affect bank funding and lending, and therefore the financing of the recovery.  View Article
Bundesbank/Nagel: How market segments changed over the crisis - Challenges for future banking
Nagel looked at changing market conditions and their impact on banking, as well as different regulatory aspects. "The interconnectedness between banks and their home country has to be monitored closely as it holds a strong contagion risk", he said.   View Article
CER/Whyte: Banking Union – Or Potemkin village?
The structure which is emerging may be that which best reflects political realities in the eurozone, but it does not look like a particularly stable one.  View Article
IMF: Global Financial Stability Report - Transition challenges to stability
Chapter 2 of this update looks at efforts by policymakers to revive weak credit growth. Chapter 3 examines how banking funding structures matter for financial stability and the potential impact of various regulatory reforms.  View Article
Wolfgang Münchau: Do not kid yourself that the eurozone is recovering
The main constraint on the resumption of growth is the failure to clean up the banking sector, observes Münchau in his FT column.  View Article

Economic

The future of the EMU: Commission proposes ideas to deepen social integration
The Commission has proposed to build on the rules under the European Semester to ensure there is a strong social dimension in the Economic and Monetary Union. (Includes links to statements from EP President Schulz, Commissioner Andor and S&D MEPs.)  View Article
ECON Committee: Still much room to improve the European semester, say MEPs
European Semester economic policy coordination needs many fixes, not least to take proper account of growth, employment, investment and social concerns, warned the ECON Committee in a resolution.  View Article
Bruegel/Darvas: Insufficient home assignments from the European Semester
Darvas finds the country-specific and euro area recommendations disappointing, as they very much reflect the general view on economic policies of the Commission and Germany, placing strong emphasis on structural reforms and almost no emphasis on demand.  View Article
Regulatory issues top the agenda of second round of EU-US trade deal negotiations
The focus of the upcoming second round of negotiations for a TTIP on 7-11 October is for the EU and the US negotiators to make progress on regulatory issues and standards. (Includes links to statements from Commissioner De Gucht and US Ambassador Froman.)  View Article
VP Rehn: Building Europe's recovery, rebuilding its monetary union
"The three keys to sustainable growth in Europe are: the adjustment capacity in the real economy; a well-functioning financial system for efficient investment; and a credible framework for sound public finances."  View Article
Notre Europe - Jacques Delors Inst: Blueprint for a Cyclical Shock Insurance in the euro area
This study aims to present in detail how a cyclical stabilisation insurance fund could be a solution to the problem of lacking business cycle convergence in the euro area.  View Article
IMF's 2013 Annual Report: Promoting a More Secure and Stable Global Economy
"The global economy is in better shape, but the road to a robust and comprehensive recovery remains bumpy", says IMF Managing Director Christine Lagarde in an introduction to the institution's Annual Report.  View Article

Budgetary

EU budget 2014: Growth, jobs and humanitarian aid cuts reversed
Budgets Committee MEPs have reversed the Council's proposed cuts in investments to stimulate growth and jobs in 2014. They have also reversed cuts in funding for international policy, and Parliament's own budget was substantially reduced.  View Article
Reuters: New era as Brussels tightens its grip on budget miscreants
In one of the most far-reaching responses to the region's debt crisis, the Commission will now run the rule over the budget plans of the 17 eurozone countries before they are fully digested by national parliaments.  View Article
ECFIN Economic Paper: Effects of fiscal consolidation envisaged in the 2013 SCPs on public debt dynamics in EU Member States
This paper assesses the response of the debt-to-GDP ratio to the fiscal consolidation efforts envisaged in the 2013 Stability and Convergence Programmes (SCPs) presented by EU Member States, under different assumptions on the underlying fiscal multipliers.  View Article

Member State events

ESM disburses €1.5 billion to Cyprus
The European Stability Mechanism disbursed €1.5 billion to Cyprus for the recapitalisation of the cooperative banking sector.  View Article
Kathimerini: Troika leaves Greece list of six orders
Troika inspectors left Greece a list of outstanding issues that must be settled before their return to Athens, asking the ministry to speed up procedures for six specific actions.  View Article
Kathimerini: Troika and Greek government postpone decisions
After reaching a deadlock over how to achieve the target of a primary surplus for 2014, talks between the Greek government and its international creditors have come to a temporary halt. (Includes EC press release and IMF/Lagarde statement.)  View Article
IMF completes eleventh review under the EFF arrangement for Ireland and approves €770 million disbursement
The completion of the review enables the disbursement of an amount equivalent to ca. €770 million, bringing total disbursements under the EFF to the equivalent of ca. €21.43 billion. (Includes press release: EFSF disburses €1 billion to Ireland.)  View Article
Reuters: Portuguese punish ruling party for bailout pain in local polls
Portuguese voters punished the ruling Social Democrats for painful austerity under an EU/IMF bailout, boosting opposition and independent candidates in municipal elections on Sunday.  View Article
Statement by the EC and the ECB following the conclusion of the fourth review of the financial assistance programme for Spain
On the basis of the review, it can be concluded that the programme remains on track.  View Article
BBC: Italy crisis - PM Letta wins vote after Berlusconi U-turn
Italian Premier Enrico Letta has won a confidence vote after a last-minute U-turn by former PM Silvio Berlusconi. (Includes remarks from President Barroso.)  View Article
IMF: Italy's financial system stabilised, still vulnerable
Italy's financial system has so far managed to overcome the financial crisis, but a weak economy and the link between Italian banks and government finances are a strain on banks.  View Article
German coalition talks to start on Friday - Press round-up
Angela Merkel's CDU will conduct talks with both the SPD and the Greens, but negotiations are expected to take weeks. The SPD would need an all member referendum to ratify a possible grand coalition; tax increases are a topic of contention; and the Greens insist on a focus on climate protection.  View Article
Jean Pisani-Ferry: Angela Merkel's return to Europe
Writing for Project Syndicate, Pisani-Ferry says that Merkel's resounding victory in Germany's recent general election gives her a mandate of exceptional political strength. It is time for Germany to give form and substance to the concept of European political union.  View Article
Bruegel/Schwarzer & Wolff: A new way for Germany and Europe
The authors see three central elements which the new German government should pursue, including a change in the philosophy of crisis management.  View Article
British Influence/Kent: Rhetoric and reality - Tories start to wake up
Assessing the prevailing mood at the Conservative Party conference, Kent writes: "An emerging realism about Europe was visible both in the platform speeches and on the fringe. The Tories are not about to declare their undying love for all things European but the edge has come off the debate."  View Article
CER/Burnside: What would a Brexit mean for EU competition policy?
A British exit from the EU could have important repercussions for competition policy.  View Article
EUobserver: UK keen to delete 'ever closer union' from EU treaty
David Cameron wants to remove the commitment to "ever closer union" from the EU treaty, as part of plans to reform Britain's membership of the bloc.  View Article
Austrian elections: Renewal of the grand coalition most likely outcome
The current coalition partners, the centre-left SPÖ and the centre-right ÖVP, came out top in the parliamentary elections with 27.1 per cent and 23.8 per cent respectively, but the results are a historic low for both parties. Anti-euro parties won a combined vote share of 31 per cent.  View Article
LSE/Evans: The threat of Geert Wilders winning snap elections is likely to be enough to force a compromise on the Netherlands' 2013 budget
In 2012, the Netherlands held snap elections following disagreement between Mark Rutte's government and Geert Wilders' right-wing PVV over the country's budget. One year on and Rutte is once again facing difficulty.  View Article
Reuters: Slovenian PM threatens to quit, move could bring on bailout
Slovenian Prime Minister Alenka Bratusek threatened on Thursday to quit the government if she loses a party leadership vote this month, saying the country had no time for "games" as it seeks to avert an international bailout.  View Article




© Graham Bishop