Europe Prepares to Investigate Chinese Dumping of Solar Panels

"Defying Chinese threats of retaliation against European wines and industrial materials, the European Union is preparing to begin on Thursday morning a broad investigation into whether Chinese companies have been exporting solar panels for less than it costs to make them. 

The case would be one of the largest trade actions in European history and could lead to steep tariffs on much of China’s $20 billion in annual exports of solar products to Europe, four people familiar with the dispute said Wednesday.

The anti-dumping case, which follows a series of bankruptcies and factory closings by European and U.S. solar panel manufacturers, would broaden what has already become one of the biggest sticking points in trade relations between China and the United States. The U.S. Commerce Department imposed preliminary anti-dumping tariffs in May of at least 31 percent on Chinese solar panels, in addition to preliminary anti-subsidy tariffs of 2.9 percent to 4.73 percent that were imposed in March.

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The Union also takes longer than the United States to investigate such cases. Preliminary tariffs could be imposed in Europe next May, and final tariffs would not be set until December of next year.

E.U. officials declined to comment on the solar panel issue. Regarding the possibility of Chinese retaliation, they repeated the Union’s standard position that foreign countries should impose trade restrictions only if they follow procedures that comply with the World Trade Organization’s rules.

The United States and the Union each follow elaborate, quasi-judicial procedures for anti-dumping and anti-subsidy cases, taking voluminous statements from affected companies before acting, and following detailed rules for setting any tariffs. China’s methods for assessing trade penalties are relatively mysterious, and have been the subject of periodic European and American criticism.

The Union is preparing to start the investigation in response to a complaint filed by a coalition of about 20 European companies led by SolarWorld, a German maker of solar panels. SolarWorld, which also has operations in Oregon, had previously set up a coalition of solar panel producers in the United States that used a legal filing to force the Commerce Department to file the cases there.

Chen Huiqing, deputy director for solar products at the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, said at an industry conference in Guangzhou two weeks ago that the Chinese industry had sent a team of representatives to Brussels in one last bid to talk European officials out of starting a trade case. She warned that Chinese solar panel manufacturers already faced declining profit margins, shortages of capital and weakening foreign demand.

Chinese companies played a tiny role in the global solar power industry until five years ago, when they began a surge that has now brought them two-thirds of the global market. That rapid growth has been accompanied by a steep plunge in wholesale prices for solar panels, which have dropped by up to three-quarters in the past four years.

Retail prices have fallen much more slowly, as the bulk of the cost of a solar panel system lies in installation, and those costs have not fallen nearly as fast.

Chinese industry officials and regulators have periodically denied allegations that they are selling solar panels below cost in foreign markets, insisting that their huge investments in big new factories have brought down costs. But big Chinese solar companies have been posting heavy losses, particularly in the second quarter.

Frank Haugwitz, a solar industry consultant based in Beijing, said that if the Union imposed tariffs, it would be a serious blow to a Chinese industry already suffering from overcapacity. But the Chinese government is strongly committed to having a large solar panel industry, and is starting to use subsidies to expand the modest domestic market for solar panels.

“Beijing is very committed; it will not let them down,” Mr. Haugwitz said.

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Chinese retaliation against European wines could be more politically feasible in Beijing. Tales of lavish spending on expensive wines by the wealthy and by government officials periodically surface on the Chinese Internet, and feed public anxiety about the wide gap between rich and poor.

China exports over 90 percent of its solar panels. It has done so to tap into billions of dollars in subsidies from government agencies and other electricity users in the United States and Europe for homes and businesses to install solar panels. W.T.O. rules have discouraged Western countries from banning the use of their subsidies for the purchase of Chinese solar panels.

The exception has been government procurement of solar panels, for which the United States has some “buy American” provisions. China has not joined the W.T.O. side agreement on government procurement, as many Chinese provincial governments have been leery of being required to accept foreign bids for local and provincial government contracts. So Western governments also have the option not to entertain bids from Chinese companies, though this option has seldom been exercised."

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Germany wants EU convention to forge new treaty

German Chancellor Angela Merkel wants an EU 'convention' to draw up a new treaty for closer European political unification to help overcome the bloc's sovereign debt crisis, weekly Der Spiegel said on Sunday.

Germany, the European Union's biggest economy, has long argued for more national competences, including over budgets, to be transferred to European institutions but faces strong resistance from other member states.

Merkel hopes a summit of EU leaders in December can agree a concrete date for the start of the convention on a new treaty, Spiegel said.

The idea, which Spiegel said Merkel's European affairs adviser floated at meetings in Brussels, recalls the 100-plus strong convention of EU lawmakers set up in 2001 - inspired by the Philadelphia Convention that led to the adoption of the U.S. federal constitution - charged with the task of preparing a European constitution.

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Germany believes a much closer fiscal and political union - with EU oversight of national budgets - is needed to ensure that member states get their public finances fully in order and to restore stability to the euro currency.

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Romania impeachment referendum

Romania’s Prime Minister Victor Ponta has pledged not to continue his efforts to oust president Traian Basescu, after he survived an impeachment referendum. 

On Sunday, Ponta had called for Basescu’s resignation. However, his attempt to remove the president has drawn anger from the EU, and the required 50 percent turnout for the ballot did not materialise. 

Of the 46 percent of people who did vote on Sunday, more than 87 percent wanted Basescu out. Both the president and the opposition Democratic Liberal Party had urged people to boycott the ballot. 

Despite lack of support shown by the voting figures and Basescu’s falling popularity, some are glad he is still the president. 

Many speculate the rivalry between the prime minister and Basescu will continue. 

(...) 

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Ex-Milosevic spokesman becomes new Serbia PM

Prime Minister Ivica Dacic was sworn in Friday, marking the first time the late Milosevic's Socialist party will dominate the government since ruling Serbia for a decade in the 1990s — an era of wars, international sanctions and economic downturn.

 During the Balkan wars Dacic was nicknamed "Little Sloba" for his admiration of Milosevic. But he has embraced a reformist course in recent years and European leaders congratulated him Friday, signaling openness to a democratically elected leader in a country that has made steady democratic strides since ousting Milosevic in 2000. 

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During a parliamentary debate on Thursday ahead of the vote that approved the new government, Dacic reiterated that Serbia will never recognize Kosovo, but stated that his government was ready to "immediately" reopen EU-brokered talks. "There has been enough blood in the Balkans," Dacic said.

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Dacic's Cabinet was approved with 142 votes for and 72 against in a 250-member assembly, ending nearly three months of political uncertainty that followed an inconclusive election on May 6. After the vote, Dacic said he was pleased with the wide backing he received. 

He promised not to stray from the EU bid, saying that he has already spoken on the phone with EU's top foreign policy official, Catherine Ashton."Serbia stands firmly on the EU path," Dacic said in a statement. 

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Oettinger warns of deindustrialization

Policies governing the European Union's drive towards a low- carbon economy should not lose sight of the need to retain the bloc's industrial base, Energy Commissioner Guenther Oettinger said in a newspaper column on Monday. 

 "Europe should think about adding a fourth goal to the three 20-20-20 energy-related ones up to the year 2020," Oettinger wrote in the business daily Handelsblatt. The bloc's goals are a planned 20 percent hike in energy efficiency, a 20 percent cut in CO2 emissions and reaching a 20 percent share of renewables in energy usage by 2020. 

"(Europe) ... should make (another) permanent goal a 20 percent industrial contribution to gross domestic product (by 2020)," Oettinger said. This share had sunk to 18 percent in 2010 from around 22 percent in 2000. 

"We need a strategy for the re-industrialization of Europe," he said. Oettinger said Europe was too dependent on energy imports - its main natural gas supplier is Russia and its oil comes mainly from the Middle East - and therefore had to ensure efficient energy production and usage, to help stand up to competitors such as the United States where gas prices have plummeted. 

Electricity would become the EU's main energy benchmark as it would expand its share in fuelling transport, Oettinger said, adding Europe needed a policy "that considered that security of supply and affordability of power are a decisive location factor in the global context," he wrote. 

Oettinger, a German national, echoed rising concern about runaway power prices in his home country, where subsidizing of fast-expanding green power is burdening industrial and household consumers. This has already caused a government rethink on, and subsequent cuts to, solar power. Environment Minister Peter Altmaier told the mass circulation Bild am Sonntag on Sunday he was skeptical about some important goals of Germany's energy U-turn, put in place last year in the wake of the Fukushima nuclear disaster. In particular, Altmaier doubted whether power usage could be cut by 10 percent up to 2020, which the government had stipulated along with goals to get out of nuclear energy fast in favor of green power.

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Romanian President Impeached, Faces Referendum

Romanian lawmakers impeached President Traian Basescu in an overwhelming vote Friday, paving the way for a national referendum that could see the divisive and increasingly unpopular leader ousted from the powerful position he's held for eight years. The vote of 256-114 in parliament came as Basescu and Prime Minister Victor Ponta have engaged in a bitter power struggle in the eastern European country of 19 million. The machinations, especially attempts to sideline the judiciary, have drawn statements of concern from the European Union and the United States. 

Basescu's opponents accused him of overstepping his authority by meddling in government business and legal affairs. The 60-year-old former ship's captain also was accused of making racist remarks about Gypsies and disabled people. 

Senate Speaker Crin Antonescu, who will serve as interim president now that Basescu has been effectively suspended from the role, said a popular referendum on Basescu's fate will be held July 29.Basescu was impeached in 2007 but survived a referendum. Still, his popularity has declined steeply, and he faces tougher odds this time. One major reason is that the Ponta-led government changed the law this week to make it easier to oust Basescu from office. Now, a simple majority of votes cast is needed to push him out. Before, a majority of all voters in Romania was required.

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Montenegró is a csatlakozás útjára léphet Jóváhagyták az európai uniós tagországok állam- és kormányfői pénteken Brüsszelben azt a döntést, amelynek értelmében megkezdődhetnek a csatlakozási tárgyalások Montenegró és az EU között. A tárgyalások megkezdését Herman Van Rompuy, a Tanács elnöke jelentette be az értekezletet lezáró nemzetközi sajtótájékoztatón. Megerősítette, hogy a tárgyalások hivatalosan már pénteken meg is kezdődnek. Ez elsősorban a most leköszönő dán elnökség kívánsága volt – így a megbeszéléssorozat még a "dán" félévben kezdetét veheti.
 (...)
 Euvonal.hu

Summit puts end to EU patent turf war

EU leaders have forged a compromise that will end a long-running dispute over a common European patent, clearing the way for easier and less costly way of registering products. National leaders ended their two-day summit on Friday (29 June) by agreeing to divide the functions of the European patent court between the three countries eager to host it – France, Germany and Britain. The location of the patent court was the last outstanding issue in a long-fought effort. 

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The main seat - the Central Division of the Court of First Instance of the Unified Patent Court (UPC) - will be in Paris. The first president of the court would come from France, as the member country hosting the central division. Given the highly specialised nature of patent litigation, two sections will be established - one in London and the other in Munich, the Danish prime minister said. (...) On 11 March 2011, ministers from 25 member states decided to go ahead with plans to introduce a common system for registering patents, without Spain and Italy, using the so-called 'enhanced co-operation' mechanism. The mechanism allows a group of at least nine EU countries to adopt new common rules among themselves, in areas where an EU-wide agreement cannot be reached. Internal Market and Services Commissioner Michel Barnier welcomed the Council decision, saying the compromise reached is a decisive step towards the creation of a unitary patent and a common patent court in Europe. “The reform will create a simpler application process and considerably reduce the costs for obtaining patent protection,” Barnier said in a statement. “All future unitary patents will eventually be available in all official EU languages, thus ensuring the dissemination of knowledge and benefiting inventors. I hope that Spain and Italy will also join the new regime soon.” He said Europe is falling behind the United States and China in the number of patents issued. French President François Hollande told a news conference there were no winners or losers. "What took place was a compromise, and it was because France and Germany were united, all through the night, that we achieved this compromise," Hollande said. The European Parliament is expected to vote on the proposal on 4 July. This would open the way toward having the first unitary patent will be registered in 2014. Euractive.com

Italy and Spain get 'breakthrough' deal on bailout funds

Eurozone leaders in the early hours of Friday morning (29 June) agreed to allow bailout funds to recapitalise banks directly and to buy bonds for "well-behaving" countries - states which are pursuing reforms but suffering from market pressure.
The deal is designed to help Spain and Italy to lower their borrowing costs, but might take several months to implement. "We agreed on something new, which is a breakthrough, that banks can be directly recapitalised in certain circumstances... and we are opening the possibility for well-behaving countries to use the EFSF/ESM [bailout funds] to reassure markets and get some stability around their sovereign bonds," EU council chief Herman Van Rompuy said in a press conference at the end of the marathon meeting.
Italy and Spain had earlier filibustered a non-controversial EU "growth pact" worth €130 billion in order to achieve concessions on their immediate concerns: their high borrowing costs.Germany insisted that the concessions only be made if proper controls are in place, however.
Spain got its long-standing demand of letting banks be directly recapitalised by the eurozone bailout funds, but only once "an effective single supervisory mechanism is established, involving the European Central Bank." This "will not happen in a few days or weeks, but in the medium term it will achieve the desired effect," said Thomas Wieser, head of the Eurogroup working group of finance ministry officials in the eurozone. Once the new supervisory body is established, the bailout will be "transferred to the new mechanism, so that it can rapidly be taken off Spain's balance sheet," Wieser said. 
Madrid also got a concession on the so-called preferred creditor status for the permanent eurozone bailout fund. Euro leaders decided that the bailout for the Spanish banks will not have such "seniority" - meaning that the permanent European Stability Mechanism will not have any priority compared to other investors in case of default. 
For his part, Italian Prime Minister Mario Monti also made some headway in his call for a "semi-automatic" mechanism so that the bailout funds buy government bonds when countries are under market pressure, but without trigerring a bailout procedure, as the rules currently stipulate. Speaking on his way out of the summit, he said he was pleased the impasse had been overcome. "There were a lot of discussions, some tension, but we made progress. At our request, we obtained a stabilisation mechanism for countries that are perfoming well under the Stability and Growth Pact, but are still under market pressure, like Italy," he said. 
Under this new mechanism, countries would sign a memorandum of understanding about continuing the reforms they are already implementing, but "there would be no troika," Monti explained, in reference to the special monitors from the EU, the International Monetary Fund and the European Central Bank that go every three months to bailed-out countries such as Greece or Portugal. 
Van Rompuy also confirmed that the conditions attached to this "flexible" mechanism would reproduce the requirements of the eurozone's beefed up economic surveillance - on budget deficits and macro-economic imbalances. "There may be just a timeline added to the memorandum, to put some pressure, but the requirements would be the same as the country-specific recommendations," he said, in reference to EU commission-issued reports for each country on where their economy stands compared to the EU rules. 
As for the long-term plan for the eurozone, the EU council chief will go back to the drawing board together with the heads of other EU institutions and come back with a "specific timelined roadmap" by October on the banking union, on more sovereignty being ceded to Brussels and on seeking ways to increase "democratic legitimacy and accountability." 
Unlike his first report discussed that night and for which there was "no agreement" on substance - Germany opposed the perspective of mutualised debt - the next one will be done "in close co-operation" with member states and also in consultation with the European Parliament, he said.
Euobserver.com

Cyprus needs money for troubled bank

A fifth euro zone country turned to Brussels for emergency funding on Monday when Cyprus announced it was seeking a lifeline for its banks and its budget, hours after Spain submitted a formal request to bail out its banks.Global share prices and the euro slid as investors bet that European leaders - due to meet this week for the 20th time since the currency zone's debt crisis hit Greece in 2010 - would fail to come up with radical measures to back up weak countries.
Germany's Chancellor Angela Merkel dashed any hope that Berlin would allow joint bonds issued by the euro zone or other measures sought by partners.Cyprus joins Greece, Ireland, Portugal and Spain in seeking EU rescue funds, meaning more than a quarter of the 17 euro zone members are now in the bloc's emergency ward. Italy's funding costs have soared too, which means it could be next.
Spain formally submitted its request for up to 100 billion euros of funds to bail out its banks, agreed on June 9.
Tiny Cyprus has just four days to raise at least 1.8 billion euros - equivalent to about 10 percent of its domestic output - to meet a deadline set by European regulators to recapitalise Cyprus Popular Bank, its second largest lender which saw its balance sheet hurt by bad Greek debt.
Finance Minister Vassos Shiarly said the country would also seek enough money to help with its budget deficit. The full amount would be decided over the course of weeks."The amount will be as much as it may be needed to cover the recapitalisation and fiscal requirements," he told Reuters.With its coffers emptying rapidly and hurtling towards an immovable deadline, Cyprus suffered a further sovereign credit rating cut on Monday by Fitch, to the junk BB+ grade. It is already shut out from raising new funds on capital markets, with yields on existing bonds well into double digits.
An island with just 1 million residents, Cyprus has a disproportionately large financial sector that is heavily exposed to Greece, a neighbour more than 10 times the size with which it shares a language, culture and close political links.
It received 2.5 billion euros in a loan from Russia last year and has been scrambling for funding from Moscow or Beijing to avoid the terms Brussels imposes in return for EU bailouts.
Jean-Claude Juncker, head of the Eurogroup of euro zone leaders, said Cyprus would have to negotiate aid conditions with the EU and European Central Bank."This will include measures that will address the main challenges of the Cyprus economy, primarily those of the financial sector, and I expect that Cyprus will engage with strong determination in the required policy actions," he said.
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Reuters

Pozitív döntés a pénzügyminiszterek tanácsában

Az uniós pénzügyminiszterek pénteki, június 22-i ülésükön megszüntették azt a márciusi döntésüket, amelyben a Magyarország számára elérhető kohéziós források befagyasztásáról határoztak.

Az Európai Unió gazdasági és pénzügyminisztereinek tanácsa (ECOFIN) június 22-i ülése döntött a Kohéziós Alapból származó kötelezettségvállalások – március 13-i tanácsi döntés alapján történt, 2013. január elsejétől hatályba lépő – részleges felfüggesztésének megszüntetéséről. A döntésre azért kerülhetett sor, mert a Tanács és az Európai Bizottság is úgy látja, hogy Magyarország megfelelő lépéseket tett a túlzott hiány megszüntetése érdekében. 

Március 13-án hoztak döntést a tagállamok pénzügyminiszterei: az Európai Bizottság javaslatára a kohéziós forrásokból 495 millió eurót fagyasztanak be 2013. január 1-től, de csak abban az esetben, ha Magyarország nem tesz hatékony lépéseket a költségvetési hiány tartósan három százalék alá szorítása érdekében. A miniszterek akkor úgy döntöttek, hogy a büntető intézkedést már idén júniusban hatályon kívül helyezik, ha Magyarország meghozza az elvárt kiigazító lépéseket. 

A deficiteljárás alól azonban legkorábban csak jövő tavasszal kerülhet ki az ország. 

A kohéziós alapra vonatkozó uniós szabályok szerint, ha valamely kedvezményezett tagállamban túlzott költségvetési hiány áll fenn, és az erről kiadott tanácsi ajánlást az érintett tagállam részéről nem követte eredményes intézkedés, a Tanács az alapból az érintett tagállam részére tett kötelezettségvállalások teljes vagy részleges felfüggesztéséről határozhat, a felfüggesztésről szóló határozatot követő év január 1-jei hatállyal. A szabályok szerint, ha a Tanács megállapítja, hogy az érintett tagállam megtette a szükséges kiigazító intézkedést, késedelem nélkül határoz az érintett kötelezettségvállalások felfüggesztésének megszüntetéséről is. 

Euvonal

A konzervatívok nyerték a görög választásokat

Az Új Demokrácia nyerte meg a vasárnapi görögországi parlamenti választást, Európa-párti koalíció alakulhat. Az Új Demokrácia a szavazatok 85 százalékának összeszámlálása alapján a voksok 29,96 százalékát kapta és 130 helyet szerezhet a görög parlamentben. A Radikális Baloldali Koalíció (Sziriza) a szavazatok 26,65 százaléka révén 71 helyet kaphat. A szocialista Pánhellén Szocialista Mozgalommal (Paszok) a voksok 12,46 százalékára tett szert, és 33 helyhez juthat a parlamentben.

Előrejelzések szerint Görögországban olyan kormány alakulhat, amelyben összefognának az Európa-párti erők, az Új Demokrácia, a Paszok és a Demokratikus Baloldal (Dimar), utóbbi a voksok 6,11 százalékával 16 képviselői helyet fog birtokolni a törvényhozásban. Antonis Samaras, az Új Demokrácia vezetője elmondta: mielőbb kormányt fognak alakítani, valamint rámutatott: nagykoalíciót szeretne létrehozni, előítéletek nélkül. 

euvonal.hu

Eurozone agrees bail-out for Spain's banks

Eurozone finance ministers on Saturday (9 June) agreed to disburse up to €100bn for Spain's troubled banks, but without an accompanying austerity programme as for Greece, Ireland and Portugal. After a two-and-a-half hour conference call, ministers said in a press statement that "up to €100 billion" will be granted from the eurozone's bail-out funds "for recapitalisation of financial institutions."

The funds will be channelled directly to a state-run fund for bank rescues in Spain, the Fund for Orderly Bank Restructuring, but the Spanish government will sign a memorandum of understanding and "will retain the full responsibility of the financial assistance," the Eurogroup said.

An assessment by the European Commission, with input from the European Central Bank, the International Monetary Fund and the EU banking authority, will spell out exactly how much money is needed, "as well as a proposal for the necessary policy conditionality for the financial sector that shall accompany the assistance." But unlike the three other bailed-out eurozone countries (Greece, Ireland and Portugal), Spain will not be submitted to a full-blown programme with inspectors regularly checking the implementation of reforms.

Eurozone finance ministers explained that Spain has already implemented "significant" fiscal and labour market reforms and has passed laws to strengthen the capital requirements for its banks. (...)

Spain will not seek IMF assistance - again unlike its three bail-out predecessors. The Washington-based body is set to contribute only with reports on the country. It already did so on Friday (8 June) when it estimated that Spain's banks will need €37bn in the short term, not taking into account any bank restructuring or bail-outs. The IMF report was released three days ahead schedule, as eurozone finance ministers sought to seal a deal before markets open on Monday and before crucial elections in Greece next weekend.

The prospect of Greece cancelling its second bail-out and possibly exiting the eurozone drove Spain's borrowing costs into bail-out territory and led to a downgrade by Fitch ratings agency.

Speaking in Madrid after the teleconference, Spanish economy minister Luis de Guidos said it was still unclear how much his country will actually need. But he insisted that the €100bn sum was more than enough to cover the gap and calm markets.(...)"There are no conditions of any kind on economic reforms outside of the financial sector," de Guindos said. "There are only conditions for the banks. That is all. It is an injection of capital which they will have to pay back. There are no additional conditions for Spanish society." 

"This is not a bail-out," de Guindos stressed.

:))))

Euobserver

Merkel urges 'political' union

German Chancellor Angela Merkel pushed for a stronger European political union Thursday amid growing international calls for action as a brutal Spain ratings downgrade added another twist to the eurozone crisis. In the United States, Federal Reserve Chairman Ben Bernanke became the latest to sound the alarm over the European crisis, as Merkel held talks in Berlin with British Prime Minister David Cameron. 

The two leaders agreed that closer fiscal discipline in the European Union alone was not enough to stem more than two years of turbulence as the clock ticks down for Europe to help stabilise Spain's banking system. The EU fiscal pact is "necessary but not the only precondition," Merkel said, while Cameron, who has opted out of the pact, called it "important but not sufficient" to fight the crisis. Merkel also said it was "important to stress that we have created instruments for support in the eurozone" and Germany, seen by some EU partners as being inflexible and reluctant to change, backed their use. (...)

Merkel earlier Thursday told German television she saw "more Europe" as the solution. The chancellor said that in addition to the euro currency used by 17 nations, Europe needed a fiscal union and, above all, a political union, even if that came at the cost of a two-speed approach. "We need a political union first and foremost. That means we must, step by step, cede responsibilities to Europe," Merkel told ARD public television. "But we must not remain immobile because one country or another does not want to follow yet," she added. (...)

AFP

Spain appeals for EU bail-out of struggling banks

Spain's budget minister has during a radio interview appealed for an EU bail-out of the country's banks.Speaking on Tuesday (5 June) on the Onda Cero radio station, Cristobal Montoro said: "Europe should move swiftly to allow its institutions to directly boost the capital of troubled banks in Spain." He added: "The amount needed by Spain's banking system isn't very high, nor excessive. What matters is the procedure to provide such an amount - and that's why it is important that European institutions open up and proceed with this."

His reference to "direct" aid to banks is an appeal for the Union to use its Luxembourg-based EFSF bail-out fund to help Spanish lenders. The alternative - a bail-out of the Spanish state involving the EFSF and the International Monetary Fund (IMF), as in Greece, Ireland and Portugal - comes with outside supervision of national finances and would increase the country's budget deficit. He said Spain can no longer borrow money from markets due to loss of confidence which has seen borrowing costs shoot up compared to Germany. (...)

The cost of a Spanish bank rescue is being estimated at between €40 billion and €90 billion. Montero added that a full-blown EU-IMF bail-out is unfeasible because the EFSF has €440 billion in the pot, while Spain, the eurozone's fourth largest economy, owes foreign lenders almost €1 trillion. (...)

The Spanish cry got a sympathetic ear in France.French foreign minister Laurent Fabius told media while visiting Rome also on Tuesday that the EU should take a flexible approach to Madrid.

Volker Kauder, the chief whip of Chancellor Angela Merkel's Christian Democratic Union party, told the ARD TV station on Wednesday morning: (...) "Germany will demonstrate its solidarity with other states in Europe ... but the states of Europe must for their part undertake every endeavour to contribute to solving those problems themselves." The European Commission will on Wednesday propose plans for an EU "banking union" to prevent a Spanish-type scenario in years to come. 

Euobserver

Ireland votes Yes on fiscal treaty

Ireland has voted in a favour of the fiscal discipline treaty but the Yes vote is seen as grudging and the country is now expecting EU "solidarity" in return.

With all votes counted, 60.3 percent voted in favour of the Germany-inspired document enshrining balanced budgets into national law while 39.7 percent vote against. Turnout was 50.6 percent.

(...)
http://euobserver.com/843/116460

Spanish and Italian borrowing costs soar

Euobserver

The cost of insurance against a Spanish default reached another record on Monday, with Italy's borrowing costs also rising sharply amid continued market fears about the fate of the eurozone. "With a risk premium at 500 points, it is very difficult to raise finances," Spanish Prime Minister Mariano Rajoy said Monday (28 May) in a press conference. His country's 'debt risk premium' - the default insurance investors demand on Spanish bonds compared to German bunds - that day leapt to a eurozone record of 514 basis points.

But Rajoy insisted Spain was not seeking financing from the eurzone bail-out fund, but rather alluded to earlier calls for the European Central Bank (ECB) to resume its bond-purchasing or cheap bank loans programmes which last year helped both Spain and Italy lower their borrowing costs. "We need a clear, forceful and energetic defence of the euro," Rajoy said. Last week he noted that ECB money is a more pressing issue than the theoretical discussion about further political integration of the eurozone.

Part of Spain's problem is its troubled banks. The government on Friday pumped an extra €19 billion into Bankia, its fourth-largest lender, in what is so far the biggest Spanish bank bail-out. Madrid already injected €4.4 billion earlier this month. Reports suggest another €30 billion may be needed - with an independent audit under way to examine the state of Spanish lenders.

Fears about a possible Greek exit from the eurozone, labelled "Armageddon" by some senior bankers, are affecting Spain as it seeks funding from the markets. Charles Dallara, the manager of the International Institute of Finance, an umbrella group of the world's largest banks, last week said a Greek exit would cost more than €1 trillion and seriously damage other southern countries. “Those who think that Europe, and more broadly the global economy, are really prepared for a Greek exit should think again," Dallara told Bloomberg in an interview.

Similar to Spain, Italy's borrowing costs also spiked on Monday, with two-year bonds selling at extra costs of over four percent, compared to a 3.3 percent rate last month before the Greek elections. Meanwhile, German bonds last week sold at a record of zero-percent interest, as investors are flocking to these 'safe-haven' treasury papers. European Parliament chief Martin Schulz, himself a German national, said last week that this widening gap between Germany and other eurozone countries is "destroying Europe" and urged the German chancellor to change policies.

A meeting called by Italy's premier Mario Monti next month in Rome with Rajoy, France's Francois Hollande and Germany's Angela Merkel is likely to see more pressure put on the German leader to accepting some form of joint debt issuing - the so-called eurobonds.

The prospect of having these joint bonds could help alleviate the borrowing problem for southern countries in the long run and lift the pressure from the ECB to continue buying up debt or injecting cheap loans into the eurozone banks. But Germany, who borrowing costs would rise under such a scheme, has said this is a long term solution only.

Hollande pushes EU to talk about joint euro bonds

French President Francois Hollande, standing firm in the face of stiff German opposition, said on Wednesday that European leaders should broach the possibility of jointly-issued euro bonds and that no option to resolve the bloc's crisis should be taboo. 

Hollande, due to join other European Union leaders later on Wednesday for talks over dinner, said all options should be put on the table because the gathering was about exchanging views before a decision-making summit at the end of June."This is not about entering into conflict with others," the Socialist president told a news conference in Paris. "Everyone should go into this in the best spirit."

Hollande, who held the news conference jointly with Spanish Prime Minister Mariano Rajoy after the two met, reiterated that he was committed to debt and deficit reduction but that helping economic growth was a necessary part of that objective. He said he would raise a panoply of ideas including the role of the European Central Bank and the European Financial Stability Fund on the one hand as well as euro bonds.

"It's not just about project bonds, which will also be proposed," he said at the news conference at the presidential Elysee Palace, referring to the idea of the EU backing bonds issued by managers of infrastructure projects. "It's about thinking of a means of financing that will allow all countries that have made the necessary effort to fix their public finances to gain access to financing at the lowest rates possible, sheltered from speculation or doubt in some markets," he said. "Is it acceptable that some sovereign debt has to be refinanced at rates of 6 percent when others, admittedly better regarded, can access funding at rates of close to zero in the same monetary and budgetary zone?" he asked.

Germany sold bonds offering investors no regular interest rate payments for the first time on Wednesday. Strong demand for the bonds underscored investors' desperation to find a safe place to park their euros. By contrast, investors trading in the open market were seeking returns of around 4.2 percent and 3.6 percent respectively on comparable bonds issued by vulnerable debtors Spain and Italy.

Hollande vowed during the campaign that swept him to power in a vote on May 6 where he unseated Nicolas Sarkozy that he would seek changes to a European pact on deficit reduction to add more concrete commitments to shore up economic growth. Hollande said at the news conference in Paris that he also intended to address the role of the ECB and EFSF and banking liquidity in the talks with other European leaders. "The top priority is injecting liquidity into the European financial system to ensure that European banks, all European banks, can be consolidated," he said. "It's at the end of June that we must produce solutions and do so together but it would be a shame to not go all the way on proposals," he said in defense of his position ahead of the EU meeting on Wednesday.

Reuters

Greek Crisis at G8

The leaders of the Group of 8, emphasizing growth as well as fiscal discipline at their meeting on Saturday, made a strong plea for Greece to stay in the euro zone and the European Union. Despite efforts at official reassurance, no one really knows the consequences of a Greek exit from the euro zone, or how rapidly big countries like Spain and Italy, and their banks, will feel the effects.

However cavalierly some European officials talk of “managing” a Greek exit, the political and financial costs would represent a fundamental challenge to the European Union and its credibility, and the point of no return may be approaching faster than anyone anticipated.

“Anyone who thinks a Greek departure would be cleansing and not cause systemic contagion is deluding themselves,” said Simon Tilford, chief economist at the Center for European Reform in London. “Already we’ve seen a sharp increase in spreads and the beginnings of capital flight in other struggling euro zone economies,” with the risk of a full-blown banking crisis in Spain, where 16 banks and four regions have just been downgraded by Moody’s Investor Service.

The stresses on the system are now so great that to contain panic and contagion, while protecting countries too big to bail out, would require political choices and financial commitments that many countries, including Germany, Finland and the Netherlands, seem unlikely to make — the prime reason they would prefer that Greece remain.

The problems of Greece and Spain are complicated enough, but the pressure on euro zone leaders to resolve the evident contradictions in the common currency and to move faster toward more political and fiscal integration is rising by the day. The election of François Hollande, a committed European, as president of France may help push Berlin toward more collective responsibility for the euro zone, but Chancellor Angela Merkel of Germany , with her own domestic political concerns, has rarely been willing to move quickly or boldly, which many believe has prolonged and deepened the euro crisis.

Even the British prime minister, David Cameron, warned Europe of the urgent need to fix its economic imbalances and structure. Britain is outside the euro zone and has no intention of joining, so Mr. Cameron’s words were resented. But they rang loudly. Europe, he said, “either has to make up, or it is looking at a potential breakup.”

While Greece is only a small part of the euro zone — and European officials concede it should not have been allowed to join in the first place — its exit is likely to be more expensive and complicated than figuring out a way for it to remain. That would subject, of course, to Greek voters producing a functioning government in new parliamentary elections on June 17.

Ms. Merkel is now talking of special stimulus programs for Greece to help ease the pain of austerity, but any new deal with Athens will have to be negotiated with a real government, and there is no guarantee that the next elections will produce a working majority. They might even lead to a governing coalition that is hostile to the loan agreement that Germany has insisted is not open to significant renegotiation.

(...)
CNBC

Görög kormányválság

Görögországban ügyvivő kormányt neveznek ki, miután eredménytelenül zárultak a kormányalakítási tárgyalások. Francois Hollande és Angela Merkel kiáll Görögország euróövezeti tagsága mellett. 

A görög államfő hivatala kedden jelentette be, hogy eredménytelenül értek véget a kormányalakítási tárgyalások, ezért új választást írnak ki. A választásokig szerdán, május 16-án ügyvivő kormányt neveznek ki az ország élére. A hírek hallatára a piacok nyugtalansága növekszik, több elemző cég továbbra is a görögök euróövezetből való távozását prognosztizálja. 

A pénzpiacok nyugtalansága annak ellenére is nő, hogy Angela Merkel német kancellár és Francois Hollande új francia elnök a tegnapi napon kiálltak Görögország euróövezeti tagsága mellett. Angela Merkel elmondta: maguk a görögök is azt szeretnék, hogy hazájuk a közös európai fizetőeszközt használó uniós tagállamok között maradjon. Berlin és Párizs hajlandó támogatást nyújtani ehhez, akár „pótlólagos gazdaságösztönző” lépésekkel is, ha Athén ezt igényeli. Ugyanakkor a görög félnek be kell tartania a nemzetközi pénzügyi támogatáshoz kapcsolódó megállapodást – szögezte le.

Euvonal

EU Carries Out Airstrikes on Somali Pirates

European naval aircraft fired at a pirate base on the Somali coastline for the first time in an escalated use of force against piracy threatening oil shipments that pass the Horn of Africa.

A European Union naval force helicopter attacked the base early Tuesday, targeting several skiffs the pirates were storing in the area, officials said. Nobody was injured in the attacks, officials said. 

A new EU policy permits naval officials to shoot pirate strongholds onshore, as well as offshore, which has long been permitted. The EU's action and its move to publicize the shooting signaled the seriousness of its response to the continuing piracy problem.  

(...)
Link

EU predicts 0.3 pct eurozone contraction in 2012

The European Union estimates that the economy of the 17 countries that use the euro is in recession in the wake of a debt crisis that has prompted savage spending cuts and a jump in unemployment to record highs.

The European Commission, the executive arm of the EU, forecasts that the eurozone economy will contract by 0.3 percent in 2012 and grow by 1 percent next year. Its prediction for 2012 is far weaker than the one it gave last November, when it predicted growth of 0.5 percent. A year ago it was predicting growth of 1.8 percent.

Friday's forecasts provide clear evidence of the impact of Europe's debt crisis on the eurozone economy over the past year as governments have struggled to introduce deficit-reduction measures and business and consumer confidence has taken a dive.

(...)

More...

Greek elections

Greek voters on Sunday (6 May) punished the two ruling parties responsible for the last EU bail-out and its austerity measures by giving the radical left the second highest number of votes and allowing a neo-Nazi party into the legislature for the first time.

Early official results after 10 percent of the votes were count show that the centre-right New Democracy party has gained the most votes (19.2%) but it is not enough to re-make the current ruling coalition with the Social Democrats (Pasok). Instead, Syriza, a coalition of radical left parties (16.3%) opposing the austerity rules of the €130 billion bail-out, but in favour for Greece to stay in the eurozone, pushed Pasok into third place. The right-wing Independent Greeks, a splinter party from New Democracy also openly against the bail-out, scored over ten percent. 

(...)

Vying with Syriza as the biggest news of the election is the score of the neo-Nazi Golden Dawn party. It is to hold 21 seats in the parliament after it convinced almost seven percent of the voters.  The Communist Party and the Democratic Left - bolstered by defections from Pasok - also scored above the five-percent threshold. They may be drawn into a leftist government if Samaras fails to form a majority and Syriza leader Alexis Tsipras is given the same task.

(...)

Euobserver.com

Francois Hollande lett Franciaország új elnöke

A hivatalos eredmények szerint a szocialista Francois Hollande 51,56 százalékkal megnyerte a francia elnökválasztást. A konzervatív Nicolas Sarkozy leköszönő államfő 48,44 százalékot ért el az elnökválasztás vasárnap tartott második fordulójában.

Hollande-nak államfőként a rekordméreteket öltő, több mint tíz százalékos munkanélküliség, a deficit és az államadósság lefaragása lesz a legfőbb feladata, valamint kezelnie kell a franciáknak a Brüsszel által megkívánt strukturális reformokkal és megszorításokkal szembeni, egyre növekedő elégedetlenségét is.

Francois Hollande egy korábbi beszédében mondta a következőket: „A forduló másnapján, ha mandátumot kapok, memorandumot fogok intézni az (uniós) államfőkhöz a paktum újratárgyalásáról.” Ennek négy fő pontja: eurókötvények létrehozása infrastrukturális ipari projektek finanszírozásához, az Európai Beruházási Bank finanszírozási lehetőségeinek felszabadítása, pénzügyi tranzakciós adó bevezetése, valamint az európai strukturális alapok fel nem használt maradványainak mozgósítása különböző projektekhez – mondta.

Euvonal.hu

Austerity topples Romanian government

Romania's left-leaning opposition will try to form a new government after torpedoing the centre-right cabinet in a confidence vote on Friday, the latest collapse of an austerity-minded ruling coalition in Europe.

Like other governments in the European Union, ousted Prime Minister Mihai Razvan Ungureanu's two-month-old cabinet has faced a wave of public anger against plans for spending cuts and tax hikes. Violent protests toppled his predecessor, Emil Boc.
"Today justice was done," said Victor Ponta, head of the left-leaning opposition Social Liberal Union (USL). President Traian Basescu, a political opponent, nominated Ponta to try to form a new government as prime minister.

The European Union's second-poorest member slashed public sector salaries and raised sales taxes to put its economy on a more solid footing, but the measures have hit the poorest as Romania emerges only slowly from a two-year recession. Ponta said he controls 228 seats in the 460 member parliament. He should be able to gain backing from smaller parties that will give him a clear majority. If parliament fails to back a new prime minister, an early vote would be held. The next general election is scheduled for November.
The International Monetary Fund, which with the EU has extended two loan packages to Romania, postponed a review there pending details on the shape of a new government. The deal is key to Bucharest's battle to maintain investor confidence. The IMF said it expected Romania to observe its economic policy commitments. The USL has more than 50 percent support in opinion polls. It has committed to work with the IMF, but if it takes power there will be uncertainty over whether it will roll back some austerity measures like wage cuts or hikes in sales tax. Reuters

Austerity talks collapse in the Netherlands

The ruling Dutch minority government was on the brink of collapse Saturday after anti-EU lawmaker Geert Wilders torpedoed seven weeks of austerity talks, saying he would not cave in to budget demands from "dictators in Brussels." 

New national elections that will be a referendum on the Netherlands' relationship with Europe and its ailing single currency are now all-but-certain. But before Prime Minister can tender his resignation -- possibly as early as Monday -- he must consult with allies and opposition parties on how to run a caretaker government that will have to make important economic decisions in the coming weeks and months. "Elections are the logical next step," Rutte said.

Opposition leader Diederik Sansom of the Labor Party joined others across the political spectrum in calling for new elections as soon as possible. "In the meanwhile, we in parliament will take responsibility for a careful budget in 2013," he said.

Austerity talks began in early March after the Dutch economy sank into recession and forecasts showed the 2012 budget deficit will reach 4.6 percent -- well above the 3 percent limit mandated by European rules. Dutch politicians have strongly demanded that Greece and other countries meet that target.

(...)

Rutte said negotiations had been rounded off Friday to deliver a "balanced package" of cuts, but Wilders walked out after discussing the package with his Freedom Party. Christian Democrat leader Maxime Verhagen accused Wilders of "political cowardice" for refusing to sign off on the cuts -- details of which have not yet been released.

Wilders was happy to take the blame, saying he "would not accept that the elderly in the Netherlands have to pay for nonsensical demands from Brussels." He underlined that an accord would have been possible had the coalition been less concerned with following European rules to the letter. "We don't want to bow to Brussels," he said. "We don't want our pensioners to suffer for the sake of the dictators in Brussels."

Wilders has long been a staunch critic of the European Union, opposing an EU constitution and last month suggesting the Netherlands should return to its pre-euro currency, the guilder. Most mainstream Dutch parties are generally pro-EU.

The collapse of talks could endanger the Netherlands' coveted AAA credit rating and drive up its borrowing costs. The Netherlands is one of only four nations using the euro that has the top rating, though it already is under review by rating agencies. Central Bank President Klaas Knot said last week borrowing rates would rise by 1 percent if the Netherlands' ratings are cut.

Once considered one of Europe's strongest economies, the Netherlands is suffering from high levels of personal debt, mostly mortgage related. Rutte came to power in 2010 and slashed spending by (EURO)18 billion. But after the latest downturn, he needs to cut at least (EURO)9 billion ($12 billion) more, according to estimates by the Central Plan Bureau, the government's economic think-tank.

(...)

Businessweek

EU suspends most Myanmar sanctions

The European Union agreed on Monday to suspend most of its sanctions against Myanmar for a year despite a dispute over a parliamentary oath between the army-backed ruling party and pro-democracy leader Aung San Suu Kyi. 
In the first clear sign of friction since Suu Kyi's party swept historic by-elections, the ruling party on Monday rejected her demand to replace the words "safeguard the constitution" with "respect the constitution" in the oath. Suu Kyi and party colleagues refused to take their seats at the opening of parliament, denting the image of political transformation Myanmar hopes to portray. 
(...)
One EU diplomat said the sanctions suspension did not mean Myanmar was a fully democratic country, and that it was up to the people there to work out problems like the oath. 
(...)
The suspension, which does not apply to a separate arms embargo, is likely to go into effect this week. It will allow European companies to invest in Myanmar, which has significant natural resources and borders economic giants China and India. The EU had frozen the assets of nearly a thousand companies and institutions, and banned almost 500 people from entering the EU. It also prohibited military-related technical help and banned investment in the mining, timber and precious metals sectors.
The EU is rewarding a shift that has seen many political prisoners freed and a range of repressive measures lifted.
More...

Spain Not Greece Is the Real Test

The decisive test of the euro area’s plans for economic recovery was never Greece but Spain, and the European Union shows every sign of failing it. The Spanish government’s new austerity plan hasn’t won investors’ confidence, and this creates a threat not just to Spain but to the whole EU. Europe’s governments need to change course before it’s too late. (...)
The problem is not that Spain’s new austerity plan is too timid. Just the opposite: Under EU orders, Spain is promising what might be the tightest fiscal squeeze that it or any other European economy has ever faced. The new plan calls for the budget deficit to fall from 8.5 percent of gross domestic product to 5.3 percent this year. Since the economy is already shrinking, this requires a discretionary fiscal tightening of roughly 4 percent of GDP -- with the unemployment rate already standing at about 23 percent. (...)
Spain cannot work through this crisis without more help from its EU partners. In their own larger interests they should allow a milder path of fiscal consolidation, and support Spanish growth along that path. That means steps to buoy EU-wide growth, including easier fiscal policy in Germany and easier monetary policy from the ECB. It means outright temporary fiscal transfers to Spain. Above all it means announcing that the ECB will act as lender of last resort to distressed euro-area governments.
Spain is being drawn into a vicious circle of economic, fiscal and political collapse. Even now, this is an avoidable danger, so long as the EU is willing to act. But if it stands aside too long and lets Spain fall into the trap, containing the damage will make dealing with Greece look like child’s play.
Bloomberg

Free trade or fair trade

Under pressure from French President Nicolas Sarkozy, the European Commission adopted proposals on March 21 that could shut foreign companies out of bidding for public contracts in the European Union unless their home countries provide similar access to European firms.
The EU executive, which has historically promoted free trade and opposed protectionism, insists the measure is intended as a crowbar to open lucrative government contracts in countries such as Japan, the United States and China, not to close EU markets. (...)
Critics, notably the free-trading British, say the proposals send the wrong signal and would put Europe on a slippery slope towards fencing off markets rather than opening them.
Germany, Europe's biggest exporter, is also unenthusiastic, fearing retaliation against its cars, chemicals and industrial machinery, which are still conquering Asian growth markets.
Sarkozy, who has long banged the drum for trade reciprocity and branded Europe "naive", has gone further and demanded that the EU adopt a Buy European Act similar to the Buy American Act reserving certain markets for domestic producers. (...)
Like many trade battles, the dispute pits the interests of producers against those of consumers and exposes the limits of Europe's ability to spread its own system of rules-based governance worldwide. A study produced for the French government argues that aside from public procurement markets, European manufacturers face a growing problem of "unfair competition" from countries with lower labor, environment and safety standards.(...)
Reuters

Egyedül alakít kormányt Fico

Az egyeztetések során bebizonyosodott, hogy a Smernek egyedül kell majd kormányt alakítania - mondta el a kerekasztal-találkozót követő sajtótájékoztatón Robert Fico. A kerekasztal-tárgyaláson az Irány - Szociáldemokrácia (Smer-SD) elnökének a meghívására vettek részt a parlamentbe jutott pártok vezetői csütörtökön Pozsonyban.

Robert Fico a tárgyalások után kijelentette, nem látnak okot arra, hogy változtassanak a kisebbségek jelenleg érvényes status quóján. Hozzátette: valószínűleg sor kerülhet a szlovák állampolgársági törvény módosítására. A Smer elnöke ennek részleteire nem tért ki.

A Smer vasárnap abszolút többséget szerzett az előrehozott szlovák parlamenti választásokon, a Híd biztos eredménnyel jutott a törvényhozásba. A Szlovák Nemzeti Párt kiesett a parlamentből, és nem került vissza a már a 2010-es választásokon is a bejutási küszöb alatt teljesítő Magyar Koalíció Pártja.

Robert Fico alig kétéves szünet után térhet vissza a hatalomba, miután a baloldali populista Smer a szavazatok 44,43 százalékát megszerezve megnyerte a szlovákiai parlamenti választást. 83 képviselőjükkel kényelmes abszolút többséget szereztek a 150 fős törvényhozásban, és nincs akkora terem a pozsonyi parlamentben, ahol elférne a frakciójuk. Fico titkos vágya is teljesült, a párt több mint egymillió szavazatot kapott, ugyanakkor nem jött össze a titkon remélt alkotmányos többség, melyhez Szlovákiában ez háromötödös többség, 90 képviselő kellett volna. A korábbi nyilatkozatok alapján nem volt elképzelhetetlen, hogy ehhez koalíciós társat keres magának Fico, ám csütörtökre kiderült, egyedül alakítanak kormányt.

index.hu

Jóváhagyták a magyar kohéziós pénzek felfüggesztését

Kedden délután döntést hoztak a tagállamok pénzügyminiszterei: az Európai Bizottság javaslatára a kohéziós forrásokból 495 millió eurót fagyasztanak be 2013. január 1-től, de csak abban az esetben, ha Magyarország nem tesz hatékony lépéseket a költségvetési hiány tartósan három százalék alá szorítása érdekében. A büntető intézkedést már idén júniusban hatályon kívül helyezik, ha Magyarország addig meghozza az elvárt kiigazító lépéseket. Az előző napokban még olyan értesülések láttak napvilágot, hogy a miniszterek szeptemberben térnének vissza Magyarország ügyére.

Hétfőn az euróövezeti pénzügyminiszterek a rossz deficitadatokat felmutató Spanyolországgal szemben jelentős megértést mutattak. Ennek nyomán kedden több uniós ország arra az álláspontra helyezkedett, hogy Magyarországgal szemben is méltányosabban kell eljárni, így a döntés a vártnál sokkal jobban elhúzódó vita nyomán született meg.

A Gazdasági és Pénzügyek Tanácsa ülésén Magyarországot képviselő Matolcsy György nemzetgazdasági miniszter szerint a magyar nemzeti érdekek és az európai uniós értékek szempontjából egyaránt olyan ésszerű megoldás született, amellyel megszűnt az országgal szembeni kettős mérce. Matolcsy az ülés után úgy fogalmazott: „első ízben tapasztaltam miniszterként, hogy az EU-tagállamok legalább kétharmada kiállt Magyarország nemzeti érdekei mellett”. Mint mondta, ez „megható volt és biztató”.

Navracsics Tibor miniszterelnök-helyettes a témában elmondta: most rendelkezésre áll egy viszonylag rövid idő, „ami alatt viszont bizonyíthatunk”, és a kormány elérheti, hogy ne függesszék fel a támogatások folyósítását.

A kohéziós alapra vonatkozó uniós szabályok szerint, ha valamely kedvezményezett tagállamban túlzott költségvetési hiány áll fenn, és az erről kiadott tanácsi ajánlást az érintett tagállam részéről nem követte eredményes intézkedés, az alapból az érintett tagállam részére tett kötelezettségvállalások teljes vagy részleges felfüggesztéséről határozhat, a felfüggesztésről szóló határozatot követő év január 1-jei hatállyal. A szabályok szerint ha a Tanács megállapítja, hogy az érintett tagállam megtette a szükséges kiigazító intézkedést, késedelem nélkül határoz az érintett kötelezettségvállalások felfüggesztésének megszüntetéséről is.

Euvonal

2nd term for Van Rompuy

Herman Van Rompuy, has been elected to a second term as head of the European Council, with his understated style credited with keeping the "show on the road" during the ongoing eurozone crisis.
With little ado, and early on in the EU leader's meeting beginning Thursday evening (1 March), the former Belgian prime minister - unchallenged - was tasked with carrying on for a further two and a half years.

The first ever to hold the post, which is vaguely defined in the EU's latest treaty as driving forward EU leaders' summits, Van Rompuy's take on the job has been almost complete political self-effacement in return for gaining the trust of the 27 leaders.

A measure of his success is that he was also appointed chair of the twice-yearly eurozone summits, a controversial new set-up contained in the fiscal compact treaty.

Szerbia hivatalosan tagjelölt

Az uniós vezetők megállapodtak arról, hogy Szerbia megkapja az EU-tagjelölt ország hivatalos státusát. Egyetértettek abban is, hogy szeptemberben döntést kell hozni Bulgária és Románia belépéséről a határok szabad átjárhatóságát biztosító schengeni övezetbe.

Találkozójuk első napján az uniós vezetők azért foglalkoztak a bővítést érintő kérdésekkel, mert az eredetileg tervezett időpontban, tavaly decemberben nem tudtak kompromisszumra jutni ezekben. A Szerbiával kapcsolatos döntést akkor a megnövekedett szerb-koszovói feszültség miatt kellett elhalasztani, a Schengenre vonatkozót pedig azért, mert Hollandia nem látta elégségesnek ahhoz a bevezetett romániai és bulgáriai reformokat. Egyelőre nincs szó arról, hogy az uniós csatlakozási tárgyalások is megkezdődnek Szerbiával.

Euvonal

Új fiskális paktum

A brüsszeli csúcstalálkozó második napján írták alá a tagállamok – Nagy-Britanniát és Csehországot leszámítva – azt a fiskális paktumot, amely garantálja a szigorúbb költségvetési fegyelmet.
A dokumentum hivatalosan a Szerződés a Gazdasági és Pénzügyi Unión belüli stabilitásról, koordinációról és kormányzásról nevet viseli. Az uniós állam- és kormányfők találkozójának második napját megnyitó aláírási ceremónián Herman Van Rompuy, a kormányfői tanács elnöke hangoztatta: olyan előrelépésről van szó, amely segít helyreállítani a bizalmat az EU Gazdasági és Pénzügyi Uniója iránt. A dokumentum megalkotását annak idején kezdeményező Angela Merkel német kancellár pedig az EU történetében mérföldkőnek minősítette az aláírást.
A paktumot magyar részről Orbán Viktor miniszterelnök írta alá, aki egy péntek reggeli interjúban elmondta, hogy az új európai uniós fiskális paktum segít az euró megerősítésében, ez pedig Magyarország érdeke is. Ugyanakkor kiemelte, hogy a szerződés Magyarországra csak azután vonatkozik majd, hogy csatlakozott az eurózónához.
A paktum szerint az euróövezeti országok vállalják, hogy államháztartásuk szerkezeti hiányát a bruttó hazai termékhez (GDP) képest legfeljebb 0,5 százalékon tartják. Emellett minden állam automatikus kiigazítási mechanizmus életbe léptetését helyezi kilátásba arra az esetre, ha a rájuk vonatkozó középtávú célkitűzéstől, illetve az ahhoz vezető korrekciós pályától jelentősen eltérnek. Ez a szerződés tartalmazza az úgynevezett adósságféket is, vagyis a belső államadósság szinten tartásának kötelességét.
A paktum előírja, hogy eurózóna országainak ezentúl évente legalább kétszer külön is tartaniuk kell legfelsőbb szintű tanácskozást, azon felül, hogy az EU évente legkevesebb négy csúcstalálkozót rendez. Az aláíró országoknak a megállapodás szerint alkotmányukba vagy más kiemelt törvényükbe kell foglalniuk a költségvetési fegyelemre vonatkozó utalást.

Euvonal

Euro area and EU27 GDP down by 0.3%

"GDP fell by 0.3% in both the euro area and the EU27 during the fourth quarter of 2011, compared with the previous quarter, according to flash estimates published by Eurostat, the statistical office of the European Union. In the third quarter of 2011, growth rates were +0.1% and +0.3% respectively.
Compared with the same quarter of the previous year, seasonally adjusted GDP increased by 0.7% in the euro area and by 0.9% in the EU27 in the fourth quarter of 2011, after +1.3% and +1.4% respectively in the previous quarter.
Over the whole year 2011, GDP increased by 1.5% in the euro area and by 1.6% in the EU27."
Eurostat statement
Itt a GDP adat!
"Tavaly a negyedik negyedévben a munkanappal kiigazított adatok szerint 1,5 százalékkal haladta meg a magyar gazdaság teljesítménye az egy évvel korábbi szintet. (A nyers növekedési adat 1,4%.) A GDP-növekedésre vonatkozó konszenzus előzetesen 0,8% volt, igen nagy bizonytalanság mellett: -0,1%-tól +1,3%-ig terjedtek az előrejelzések.
Az éves növekedési index harmadik egymást követő negyedévben áll 1,5 százalék körül, ami egyenletes növekedést sugall. A növekedés motorjaiban sincs nagy változás: elsősorban a mezőgazdaság, másodsorban az ipari export hajtja a gazdaságot. A negyedév/negyedév alapú növekedés 0,3 százalék volt."
Portfolio.hu

Romanian PM resigns over anti-government protests

Romanian Prime Minister Emil Boc on Monday (6 February) resigned together with the entire government in response to several weeks of anti-government protests. "I decided to hand in the government's resignation," Boc announced in a press conference in Bucharest, adding that he took this decision in order to calm "social tensions" and so that the "economic stability of the country is not affected."
The ruling party lost its majority in the upper house last week, after two MPs defected to the opposition, making it impossible for Boc's government to pass further austerity measures. Boc admitted the austerity measures his government had to take so far as part of an €20bn EU-IMF-World Bank bail-out have been "painful".
In 2010, his government slashed public-sector wages by 25 percent and increased VAT from 19 to 24 percent. But Boc insisted that the measures are paying off because Romania returned to economic growth in 2011 and is projected to have a higher growth rate in 2012 than eurozone countries. (...)
The Social-Liberal opposition is now calling for early elections and a transitional government under a technocratic leader. (...) General elections were supposed to take place later this fall and opinion polls put the Social-Liberal camp well ahead of the ruling centre-right party, at around 50 percent of the votes.
Euobserver

Gazdaságilag stabilabb Unió jön létre

Az uniós országok állam- és kormányfőinek informális csúcstalálkozóján jóváhagyták a pénzügyi stabilitási mechanizmusról szóló szerződést, döntöttek a gazdasági növekedést és a munkahelyteremtést ösztönző intézkedésekről, azonban a pénzügyi paktumhoz csak 25 tagállam csatlakozott.
A találkozó után kiadott közleményben az áll, hogy az uniós vezetők a gazdasági stabilizálódás jeleit látják az Európai Unióban, ugyanakkor a piacokon továbbra is feszültség és bizonytalanság tapasztalható. A tagországok komoly erőfeszítéseket tesznek annak érdekében, hogy kiegyenlítsék államháztartásuk egyenlőtlenségeit, és fenntartható módon konszolidálják pénzügyeiket, de a növekedés és foglalkoztatás terén további erőfeszítésekre van szükség.

Pénzügyi unió
Nagy-Britannia mellett Csehország sem csatlakozik egyelőre a szigorú költségvetési fegyelmet előíró új pénzügyi unióról szóló szerződéshez, azonban a többi 25 uniós ország a csatlakozás mellett döntött. Az új pénzügyi szerződés szankciókat ír elő a részes országokkal szemben, ha költségvetési hiányuk meghaladja a GDP 3 százalékát. A cél az úgynevezett kiegyensúlyozott költségvetés elérése, amit 0,5 százalékosnál alacsonyabb strukturális deficitszintként határoznak meg.
A szerződést elvben ugyan a 17 euróövezeti ország kívánja megkötni egymással - a pénzügyi fegyelem és a koordináció minden eddiginél szorosabbra fűzése céljából -, ám ahhoz csatlakozhat az eurózónán kívüli 10 további EU-ország is. A szerződést aláíró nem euróövezeti országokra a szerződésből folyó jogkövetkezmények csak akkortól élnek majd, ha a szóban forgó ország csatlakozik az euróövezethez. Kompromisszum született abban a kérdésben is, hogy a pénzügyi szerződéshez csatlakozó, de még nem euróövezeti országok képviselői részt vehetnek-e majd az euróövezeti országok csúcstalálkozóin. A hétfőn létrejött egyezség lényege az, hogy évente legalább két csúcstalálkozót rendeznek majd csak az euróövezeti országok számára és ezen felül lesz egy olyan csúcsértekezlet is, ahol az új pénzügyi uniós szerződést aláíró, de az euróövezeten kívüli EU-országok is részt vehetnek majd.

Pénzügyi stabilitási mechanizmus
Hétfőn jóváhagyták az állandó euróövezeti pénzügyi stabilitási mechanizmus (ESM) létrehozásáról szóló szerződést is. A pénzügyi fegyelemre vonatkozó megállapodás egy átfogó intézkedéscsomag részeként összesen 500 milliárd eurót irányoz elő Európa pénzügyi helyzetének orvoslására. Azon tagállamok, amelyek általuk nem befolyásolható rendkívüli körülmények által okozott nehézségekkel küzdenek, kérhetik, hogy a mechanizmus révén pénzügyi segítségnyújtásban részesüljenek. Ilyen körülmény lehet például a nemzetközi gazdasági és pénzügyi helyzet súlyos rosszabbodása.
A mechanizmus lehetővé teszi az Unió számára, hogy ezekre a körülményekre összehangoltan, gyorsan és hatékonyan reagáljon. A mechanizmust szigorú feltételekhez kötötten lehet igénybe venni annak érdekében, hogy a támogatásban részesülő tagállam megőrizze államháztartásának fenntarthatóságát és visszanyerje hitelfelvételi képességét a pénzügyi piacokon.

Munkahelyteremtés
A csúcstalálkozón az állam- és kormányfők megegyeztek abban, hogy korábban fel nem használt uniós forrásokat csoportosítanak át a fiatalok foglalkoztatásának ösztönzésére, valamint a kis- és középvállalkozások további támogatására. A résztvevők három területen sürgős előrelépést tartottak fontosnak: a fiatal korosztályok munkanélkülisége elleni fellépést, az egységes uniós belső piac kiterjesztését, valamint a kis- és közepes vállalkozások segítését. Megállapodtak a tagországok vezetői abban is, hogy minden tagállamban külön programokat állítanak össze a fiatal korosztályok foglalkoztatási gondjainak enyhítésére.

Új pénzügyi támogatási program Görögországnak
Még a héten megszülethet a megállapodás Görögország és magánhitelezői között, továbbá az Athént segítő új pénzügyi támogatási programról is. A csúcstalálkozót lezáró sajtótájékoztatón José Manuel Barroso, az Európai Bizottság elnöke és Herman Van Rompuy, a kormányfői tanács elnöke elmondták: azt várják az érintettektől, hogy napokon belül véglegesítik a megállapodásokat, és erre sürgetik a pénzügyminisztereket is. Az uniós vezetők szerint február közepére meg is kellene kezdeni a görög adósság átütemezését. Angela Merkel német kancellár a találkozó után azt ismételte meg, hogy Görögországnak többet kell tennie annak érdekében, hogy vállalásait betartsa, beleértve azt is, hogy az évtized végére fenntartható szintre csökkenti államadósságát.
Megerősítették, hogy Görögország adósságának részleges elengedése egyszeri eset, amelyet nem követnek hasonlók az unióban. A tagországok még ősszel állapodtak meg a magánhitelezőkkel a görög adósság részleges elengedéséről, de az elvi megegyezést azóta sem sikerült végleges formába önteni. Ugyancsak ősszel döntöttek egy új, várhatóan 130 milliárd eurós, többéves támogatási program összeállításáról.
Euvonal

EU unemployment hits record high

The number of unemployed people in Europe is reaching record highs as the economic crisis unfolds into one with significant social consequences. In eight member states alone, over 30 percent of young people under 25 are out of jobs.
The worst affected continues to be Spain where half its young are jobless. Images of long queues outside unemployment offices paint a bleak picture in the Spanish state where almost a quarter of all its citizens are unemployed.
Only Austria, Luxembourg and the Netherlands can boast an overall unemployment rate under 5 percent. The high figures - which analysts suggest are being compounded by the EU's focus on austerity measures to drive down government debt - have pushed the issue to the top of the political agenda.

(...)
The unemployment rate in the eurozone is the highest recorded since the euro was launched in 1999. Some 16.3 million people are unemployed across the 17 single-currency-using countries - the equivalent of almost the entire population of the Netherlands.
The unemployment rate in the EU 27 was 9.9 percent in December, with 23.8 million people out of work. November's figure increased from 9.8 percent to 9.9 percent. Spain, Greece and Lithuania recorded the highest rates. All three countries have imposed public sector layoffs and spending cuts. At the same time, Germany's overall unemployment rate dropped to record lows of 5.5 percent.
Euobserver

Croatia Says 'Yes' to EU Membership

Croatians voted in favor of joining the European Union despite a poor turnout for the referendum — a sign of how much the debt-stricken 27-nation bloc has lost its appeal within countries aspiring to join.

Croatia's state referendum commission said that with nearly all ballots counted, about 66 percent of those who took part in the referendum answered "yes" to the question: "Do you support the membership of the Republic of Croatia in the European Union?"

About 33 percent were against, while the rest of the ballots were invalid. About 47 percent of eligible voters took part in the referendum, illustrating voters' apathy toward the EU. That compares to 84 percent who voted in a referendum for Croatia's independence from the former Yugoslavia in 1992.

ABC news

Martin Schulz lett az EP elnöke

Az Európai Parlament kedden délelőtt Martin Schulzot választotta meg új elnökének. A német szocialista politikus a 670 leadott érvényes szavazatból 387 szavazatot kapott. Schulz elnöki mandátuma két és fél évre, a 2014. júniusi európai parlamenti választásokig szól.
Link

Három kötelezettségszegési eljárást indít Magyarországgal szemben az Európai Bizottság

Az Európai Bizottság három kötelezettségszegési eljárást indít Magyarország ellen - jelentette be José Manuel Durao Barroso elnök kedden Strasbourgban. A magyar kormány célja, hogy a teljes jogsértési eljárás lefolytatása nélkül megoldást találjanak a felmerült kérdésekben.

Az eljárások egyike a jegybank függetlenségét érintő szabályozással kapcsolatos, egy másikat a bírói tevékenység felső korhatárára vonatkozóan, a harmadikat pedig az adatvédelmi hatóság függetlenségére vonatkozó szabályokat érintően indítanak.A Bizottság döntött arról is, hogy közelebbi tájékoztatást kér a magyar kormánytól a bírói függetlenséget érintő egyes kérdésekkel kapcsolatban. Barroso elnök jelezte azt is, hogy Orbán Viktor miniszterelnök jövő héten Brüsszelbe látogat.

Mint a portugál politikus elmondta, a Bizottság remélte, hogy Magyarország végrehajtja szükséges változtatásokat. Eddig azonban ez nem történt meg - emlékeztetett. A végrehajtó testület közleménye szerint Magyarországnak a szokásosnál kevesebb ideje, egy hónapja van arra, hogy válaszoljon a bizottsági aggodalmakra. Minél gyorsabban megoldódik a helyzet, annál jobb - szögezte le Barroso. A Bizottság döntése az érintett magyar jogszabályok alapos elemzésén alapul - emelte ki.

José Manuel Durao Barroso úgy fogalmazott: a Bizottság szeretné elkerülni, hogy a kétely legkisebb árnyéka vetüljön arra, hogy "az európai család egyik kulcsállamaként" Magyarország nem tartja teljes mértékben tiszteletben a demokratikus elveket és értékeket. A Bizottság eltökélt abban, hogy biztosítsa: minden EU-tagállamban "betűjében és szellemében" teljesen tiszteletben tartják az uniós joganyagot, és ezt stabil jogi környezet garantálja.

A magyar kormány közleményében tudatta, hogy tudomásul veszi a Bizottság döntését a vizsgálatról. Ez lehetőséget ad Magyarország számára, hogy a vitát szakmai alapon, a konkrétumok talajára helyezve folytassa le, mégpedig az arra hivatott fórummal, a szerződések őrének számító Európai Bizottsággal - fogalmaz a nyilatkozat.

Euvonal

9 eurozone nations downgraded by S&P

Standard & Poor's said Friday that it has downgraded the credit ratings of nine euro area governments, including AAA-rated France and Austria. S&P lowered its rating for Italy, Spain, Portugal and Cyprus by two notches. The move means Italian bonds are now rated BBB+, dangerously close to the junk bond level that could make it even harder for the government to raise money.

France and Austria both had their top-tier credit rating lowered by one notch to AA+, said S&P. But Germany, Finland, the Netherlands and Luxembourg all maintained their AAA ratings. S&P cut the ratings of Malta, Slovakia and Slovenia by one notch.

The agency said at the time that it would conclude its review shortly after the latest summit of European Union leaders, which took place on Dec. 9.

European leaders have been banking on the new fiscal compact, announced at the December summit, to resolve the long running sovereign debt crisis. But S&P said the plan does not go far enough. "In our opinion, the political agreement does not supply sufficient additional resources or operational flexibility to bolster European rescue operations, or extend enough support for those eurozone sovereigns subjected to heightened market pressures," the agency said.

In response, Olli Rehn, vice president of the European Commission, defended European policymakers. He made a subtle dig, referencing an alert S&P accidentally sent to investors last year regarding France's credit rating. "After verifying that ... this time is not accidental, I regret the inconsistent decision earlier today by Standard & Poor's concerning the rating of several euro area member states, at a time when the euro area is taken decisive action in all fronts of its crisis response," Rehn said in a statement.

The plan includes €200 billion of loans to the International Monetary Fund to boost its contingency fund, possible sanctions if member states exceed a 3% deficit ceiling, and accelerated the creation of a permanent bailout fund that will run alongside the current European Financial Stability Facility for about a year.

CNN

Markets punish Hungary for power grab on central bank

The forint hit a record low against the euro on Wednesday (4 January) and Budapest's borrowing costs spiked as the Hungarian government remained defiant on EU and street protesters' calls to roll back controversial constitutional changes. The forint fell to 319.4 against the euro, a record low after a gradual depreciation of 20 percent in the last six months, while 10-year bond yields spiked to 10.5 percent, the highest since April 2009.
Hungary, the EU's most indebted eastern member, already saw its credit rating downgraded to junk in December and initiated talks for a standby loan from the International Monetary Fund (IMF).But the centre-right government led by Viktor Orban has pursued controversial legal changes to some of the country's independent institutions, including the central bank and media bodies, prompting IMF negotiators to walk out of talks.
Link

Banks queue up for cheap ECB loans

Over 500 European banks rushed to borrow almost half a trillion euro in cheap loans from the ECB on Wednesday (21 December), highlighting the credit squeeze on the market and only marginally increasing investor confidence that the central bank is mastering the euro-crisis.

The price in gold dropped slightly on Thursday morning and markets went up by an average of one percent in response to the cash injection, as 523 banks took a record of €489.2 billion at an interest rate of just one percent over three years - an emergency programme initiated by the European Central Bank.

So far, only short-term loans for up to a year benefited from these low rates. But the ECB decided to extend the period with many European banks heavily exposed to government bonds from troubled eurozone countries. This has led to decreasing inter-bank lending due to lack of trust in each other's capacity to pay back.

The ECB has been fiercely resisting pressure from southern countries and market analysts to step in and buy government debt on a massive scale, insisting that it can do so only to a "limited" degree and that it is there to salvage the financial system, not governments.In a speech on Monday in the European Parliament, ECB chief Mario Draghi warned of a credit crunch if his institution did not intervene to help banks out.

Preventing that from happening was his main task rather than expanding the bond purchasing programme, which was "neither eternal nor infinite." A June 2012 deadline for banks to boost their capital to nine percent risks forcing banks to "fire sell" assets at very low prices and to reduce overall lending even further, Draghi noted.

Euobserver

Europe's great divorce

WE JOURNALISTS are probably too bleary-eyed after a sleepless night to understand the full significance of what has just happened in Brussels. What is clear is that after a long, hard and rancorous negotiation, at about 5am this morning the European Union split in a fundamental way.
In an effort to stabilise the euro zone, France, Germany and 21 other countries have decided to draft their own treaty to impose more central control over national budgets. Britain and three others have decided to stay out. In the coming weeks, Britain may find itself even more isolated. Sweden, the Czech Republic and Hungary want time to consult their parliaments and political parties before deciding on whether to join the new union-within-the-union.
So two decades to the day after the Maastricht Treaty was concluded, launching the process towards the single European currency, the EU's tectonic plates have slipped momentously along same the fault line that has always divided it—the English Channel.
Confronted by the financial crisis, the euro zone is having to integrate more deeply, with a consequent loss of national sovereignty to the EU (or some other central co-ordinating body); Britain, which had secured a formal opt-out from the euro, has decided to let them go their way.
Whether the agreement does anything to stabilise the euro is moot. The agreement is heavily tilted towards budget discipline and austerity. It does little to generate money in the short term to arrest the run on sovereigns, nor does it provide a longer-term perspective of jointly-issued bonds. Much will depend on how the European Central Bank responds in the coming days and weeks.
Some doubt remains over whether and how the "euro-plus" zone will have access to EU institutions—such as the European Commission, which conducts economic assessments and recommends action, and the European Court of Justice, which Germany hopes will ensure countries adopt proper balanced-budget rules—over Britain's objections.
But especially for France, on the brink of losing its AAA credit rating and now the junior partner to Germany, this is a famous political victory. President Nicolas Sarkozy had long favoured the creation of a smaller, "core" euro zone, without the awkward British, Scandinavians and eastern Europeans that generally pursue more liberal, market-oriented policies. And he has wanted the core run on an inter-governmental basis, ie by leaders rather than by supranational European institutions. This would allow France, and Mr Sarkozy in particular, to maximise its impact. Mr Sarkozy made substantial progress on both fronts. The president tried not to gloat when he emerged at 5am to explain that an agreement endorsed by all 27 members of the EU had proved impossible because of British obstruction. “You cannot have an opt-out and then ask to participate in all the discussion about the euro that you did not want to have, and which you also criticised,” declared the French president.
With the entry next year of Croatia, which will sign its accession treaty today, the EU is still growing, said Mr Sarkozy. “The bigger Europe is, the less integrated it can be. That is an obvious truth.”
For Britain the benefit of the bargain in Brussels is far from clear. It took a good half-hour after the end of Mr Sarkozy's appearance for Mr Cameron to emerge and explain his action. The prime minister claimed he had taken a “tough decision but the right one” for British interests—particularly for its financial-services industry. In return for his agreement to change the EU treaties, Mr Cameron had wanted a number of safeguards for Britain. When he did not get them, he used his veto.
After much studied vagueness on his part about Britain's objectives, Mr Cameron's demand came down to a protocol that would ensure Britain would be given a veto on financial-services regulation (see PDF copy here). The British government has become convinced that the European Commission, usually a bastion of liberalism in Europe, has been issuing regulations hostile to the City of London under the influence of its French single-market commissioner, Michel Barnier. And yet strangely, given the accusation that Brussels was taking aim at the heart of the British economy, almost all of the new rules issued so far have been passed with British approval (albeit after much bitter backroom fighting). Tactically, too, it seemed odd to make a stand in defence of the financiers that politicians, both in Britain and across the rest of European, prefer to denounce.
Mr Cameron said he is “relaxed” about the separation. The EU has always been about multiple speeds; he was glad Britain had stayed out of the euro and out of the passport-free Schengen area. He said that life in the EU, particularly the single market, will continue as normal. “We wish them well as we want the euro zone to sort out its problems, to achieve stability and growth that all of Europe needs.” The drawn faces of senior officials seemed to say otherwise.
The 23 members of the new pact, if they act as a block, can outvote Britain. They are divided among themselves, of course. But their habit of working together and cutting deals will, inevitably, begin to weigh against Britain over time.
Mr Sarkozy and Angela Merkel, the German chancellor, have given notice of their desire for the euro zone to act in all the domains that would normally be the remit of all 27 members—for example, labour-market regulations and the corporate-tax base.
Britain may assume it will benefit from extra business for the City, should the euro zone ever pass a financial-transaction tax. But what if the new club starts imposing financial regulations among the 17 euro-zone members, or the 23 members of the euro-plus pact? That could begin to force euro-denominated transactions into the euro zone, say Paris or Frankfurt. Britain would, surely, have had more influence had the countries of the euro zone remained under an EU-wide system.
It says much about the dire state of the debate on Europe within Britain's Conservative party that, as Mr Cameron set out to Brussels, another Tory MP portentously invoked the memory of Neville Chamberlain, who infamously came back from Munich with empty assurances from Adolf Hitler. Mr Cameron may have made a grievous mistake with regard to Britain's long-term interest. But at least nobody can accuse him of returning from Brussels with a piece of paper in his hand.
Economist