European Union, Singapore conclude far-reaching trade deal

"The European Union and Singapore submitted for approval on Friday one of the world's most comprehensive free trade agreements, which the EU sees as a stepping stone towards a wider deal with southeast Asia.
The chief negotiators of both sides presented the entire text of the agreement on Friday after initialling each page of the roughly 1,000-page document. Subject to approval in Singapore and by the 28 EU member states and the European Parliament, the agreement should enter into force in late 2014 or early 2015.
Trade in goods between the two topped 52 billion euros in 2012 and in services 28 billion euros in 2011. Mutual investment has reached 190 billion euros.
The European Union sees a free trade deal as opening the door to a deal with other members of the 10-nation Association of Southeast Asian Nations (ASEAN), which has set a goal of economic integration by 2015.
The EU and ASEAN launched free trade talks in 2007, but abandoned them two years later, the EU choosing instead to conduct bilateral talks with individual members.
The European Commission is already negotiating free trade accords with Malaysia and Vietnam and launched talks in March with Thailand.
Singapore has a population of just 5 million people, against some 600 million for the whole of ASEAN, but accounts for about a third of all EU-ASEAN trade and more than 60 per cent of all investment between the two regions.
The deal goes beyond many other free trade accords in committing to open up public procurement, an area where the EU has many leading suppliers, and agreeing on technical standards in areas such motor vehicles, electronics and green technologies. For example, a car made according to EU standards will be accepted for sale in Singapore.
The European Union also gains better protection of "geographical indications", region-specific products such as Parma ham or champagne.
EU tariffs on virtually all items from Singapore will disappear over five years. Singapore has committed to its existing zero tariffs on EU imports.
Singapore is likely to benefit from reduced tariffs for pharmaceutical and petrochemical products.
In services, particularly financial, the agreement will ensure the right to sell directly or establish branches in each other's markets and promises to provide greater transparency over the award of licences."
The Economic Times

European Union launches clampdown on shadow banking

Special funds used by big companies to park billions of euros of cash face stricter rules to make them safer, the European Commission said on Wednesday, taking a first step to reform unregulated finance known as shadow banking. The draft law will regulate money market funds, demanding some set aside cash buffers to avoid a panic should many investors withdraw their money at once.
This would lower what EU financial services chief Michel Barnier said was a risk to the financial system from the trillion euro sector but users of the funds warn that demanding they hoard more for a rainy day would make them too expensive.
The changes are part of efforts to shine a light on shadow banking, a 24-trillion-euro industry in Europe that comprises money market funds, some hedge funds, and firms involved in securities lending and repurchase markets. Such groups borrow and lend, just like banks do, but because they are not banks they often fall outside the remit of regulation, which is why they are considered to operate in the 'shadow' of traditional finance.
In the European Union, money market funds are mainly based in France, Ireland and Luxembourg and are heavily used by companies and banks which borrow from them. For companies, they are an alternative home for short-term cash. Unlike banks, they have no access to support from central banks such as the European Central Bank if things go wrong.
But the vast unchartered territory unnerves regulators in part because the sector is closely intertwined with banks, who often sponsor the funds as well as relying on them for finance themselves. "We have regulated banks and markets comprehensively," said Barnier, the EU Commissioner who has led a four-year revamp of financial rules. "We now need to address the risks posed by the shadow banking system."
The European plans draw on ideas in a global blueprint that will be submitted for approval to the world's 20 leading economies when their leaders meet in Russia on Thursday and Friday. In some cases, the EU reform is more ambitious.
The reform is a response to the 2007-2008 financial crisis, which was brought on by the collapse in prices of securities tied to risky home loans. "Shadow banking was at the heart of the crisis," said Frederic Hache, a former derivatives banker who works with public-interest group Finance Watch. "As bank regulation has since tightened, activity may shift into the shadow sector."
The most controversial element in Barnier's proposal is a requirement for one type of money market fund, known as constant net asset value (CNAV) funds, to hold a cash buffer equivalent to 3 percent of their assets.
Such funds seek to maintain a stable 1 euro per share when investors redeem or buy shares in them, to keep the value of their holding steady.
The buffer would provide a safety cushion in case there is a run on the fund, as seen in the United States when the value of one U.S. fund "broke the buck" and fell below $1 per share.
The industry says the reform would be too costly.
"Imposing a three percent buffer would make money market funds unviable," said Martin O'Donovan, deputy policy and technical director at Britain's Association of Corporate Treasurers. "To cover that, their rates would no longer be competitive."
Funds whose share price floats in line with performance are spared the buffer requirement. Imposing the buffer is meant to prompt CNAV funds to convert to funds with floating share prices, which are seen by regulators as more transparent. The funds in the EU, which include BlackRock and Legal & General, are evenly split between the two types.
The European Union's 28 member states and the bloc's parliament have the final say on the draft law and some changes are likely.
Barnier also published a "roadmap" on how the EU plans to move ahead with regulating other parts of the shadow banking sector, including a proposal to boost transparency by collecting and exchanging data among regulators. Banks could be required to hold more capital to cover risks from links to shadow banking. Shadow banking intuitions themselves could be required to hold capital, the EU executive said.
Reuters

European Union has best financial quarter since late 2011

(...)

Eurostat, the European Union’s statistics office, said the 17 EU countries that use the euro saw their collective economic output increase by 0.3 percent in the April to June period from the previous quarter.

That’s the first quarterly growth since the eurozone slipped into recession in the last three months of 2011. The ensuing recession of six quarters was the longest since the euro currency was launched in 1999.

The improvement made up for the previous quarter’s equivalent decline and was moderately better than the 0.2 percent anticipated in the markets. Growth, however anemic, had been predicted by many economists following an easing in market concerns about Europe’s debt crisis in the past year and record low interest rates from the European Central Bank.

The eurozone’s growth, which translates to an annualized rate of about 1.3 percent, is still well below the 1.8 percent the United States enjoyed during the second quarter. The wider 27-country EU, which includes non-euro countries such as Britain and Poland, also emerged from its own, milder recession, and like the eurozone is also growing at an annualized rate of around 1.3 percent.

Growth in Europe provides a boon to the global economy. The EU, which now totals 28 following Croatia’s accession in July, has a population of around 550 million and its annual gross domestic product stands at around $17.3 trillion — both more than the United States, which has GDP of $16.6 billion for 315 million people.

Growth in Europe provides a boon to the global economy. The EU, which now totals 28 following Croatia’s accession in July, has a population of around 550 million and its annual gross domestic product stands at around $17.3 trillion — both more than the United States, which has GDP of $16.6 billion for 315 million people.

The EU’s recovery marks the first time since a brief period in 2011 that the four major pillars of the world economy — the United States, China, Japan and Europe — are growing at the same time.

The figures will be greeted with a sigh of relief by Europe’s policymakers, who have spent nearly four years grappling with a debt crisis that has threatened the very future of the euro. But they were not ready to declare victory, aware that this is only the start of what is expected to be a slow and uneven recovery.

“This slightly more positive data is welcome — but there is no room for any complacency whatsoever,” Olli Rehn, the EU’s top monetary official, said in his blog after the release of the figures. “I hope there will be no premature, self-congratulatory statements suggesting ‘the crisis is over.’”

The improvement was largely because of solid growth of 0.7 percent in Germany and a surprisingly strong 0.5 percent bounce-back in France following two quarters of negative growth.
Link

EU deplores Egypt deaths, calls for restraint

The European Union deplored the killings in Egypt of dozens of demonstrators in Egypt on Wednesday as security forces cleared protest camps and it called for maximum restraint by all sides.

European Union foreign policy chief Catherine Ashton said she was following the situation in Egypt with great concern. "Confrontation and violence is not the way forward to resolve key political issues. I deplore the loss of lives, injuries and destruction in Cairo and other places in Egypt. I call on the security forces to exercise utmost restraint and on all Egyptian citizens to avoid further provocations and escalation," she said in a statement.

(...)
See more at Reuters.com

EU jobless rate falls for 1st time in over 2 years

The European Union's unemployment rate fell in June for the first time in almost two-and-a-half years, a sign that a long deterioration in the bloc's jobs market may be coming to an end as the economy stabilizes.

The number of jobless people in the countries that use the euro also fell, albeit modestly, for the first time in two years.

Eurostat, the EU's official statistics agency, said Wednesday that 10.9% of the work force in the 27 nations that then formed the EU were unemployed in June, down from 11.0% in May. That is the first fall in the jobless rate since January 2011.

The number of unemployed in the 17 euro-zone countries edged down to 19.27 million from 19.29 million, the first decline--albeit a modest one--since April 2011. The fall wasn't sufficient to move the jobless rate overall, which held firm at 12.1%--its highest on record--for the fourth straight month.

Signs that unemployment may be peaking in the EU and the 17 nations that use the euro add to recent evidence from consumer and business surveys that the region's economy has stabilized in the middle of the year, and could gather some momentum in the months to come.

Economists say any recovery will be weak in the near term, and beset by uncertainty due to problems in the euro zone in particular. The currency bloc's governments are committed to growth-sapping austerity measures, and businesses are struggling to gain financing to invest due to a hobbled banking system.

The European Central Bank isn't expected to take action to support the economy at its meeting Thursday.

Eurostat said in a separate release Wednesday that the annual inflation rate in the euro zone was unchanged in July at 1.6%, beneath the ECB's target area of just below 2.0%.

MarketWatch

EU's top diplomat meets with detained Morsi in Egypt

The European Union's top diplomat said Tuesday after meeting with deposed Egyptian President Mohammed Morsi that he is well, and that she urged all those she met with on the need to move forward peacefully following his ouster nearly a month ago.
It was Morsi's first contact with the outside world since he was toppled in a military coup on July 3.
Morsi's status has emerged as a source of contention between Egypt's interim leaders and the international community, with human rights groups insisting he either be charged or released.
EU foreign policy chief Catherine Ashton also called for an inclusive political process going ahead and an end to the violence that has left the Arab world's most populous nation deeply divided between opponents and supporters of the ousted Islamist leader.
(...)
FoxNews

Europe and China Agree to Settle Solar Panel Fight

The European Union’s trade chief said on Saturday that a deal had been reached with China to settle a dispute over exports of low-cost solar panels that had threatened to set off a wider trade war between two of the world’s largest economies.

The settlement essentially involves setting a fairly high minimum price for sales of Chinese-made solar panels in the European Union to try to prevent them from undercutting European producers.

Those producers accused Chinese manufacturers of benefiting from enormous loans from state-owned banks and other government assistance that enabled them to charge prices that would otherwise be uneconomical.

“We have found an amicable solution that will result in a new equilibrium on the European solar panel market at a sustainable price level,” Karel De Gucht, the European trade commissioner, said in a statement.

The deal immediately met with ferocious criticism from the European manufacturers that had filed the complaint, and it complicates a similar dispute between the United States and China.

On Saturday, officials at the European Commission said they could not give details of the deal, including the price that Chinese exporters would pay to sell their panels in Europe, until the arrangement had been formally approved by the commission. But a European Union official, who spoke on condition of anonymity because the deal had not yet been formally approved, said the two sides had agreed to a minimum price of 0.56 euros per watt (74 cents), which would base any potential surcharge on the amount of electricity generated by each imported panel. 

The European solar manufacturers who lobbied for tougher action against the Chinese exporters on Saturday promised to sue over the settlement. The agreement “is contrary in every respect to European law,” said Milan Nitzschke, the president of EU ProSun, an industry group. A minimum price of 0.55 to 0.57 euros was at the level of “the current dumping price for Chinese modules,” the group said in a statement. 

The arrangement would cover exports from 90 of about 140 Chinese exporters that were examined during the investigation, and that represent 60 percent of the panels sold in Europe, the government official said. Those 90 companies would no longer face tariffs that were put in place in June. Chinese exporters that did not agree to the terms will still face tariffs that are set to rise to 47.6 percent on Aug. 6 from the current level of 11.8 percent, the official said.

The Chinese government hoped from the start of the trade case with the European Union for a negotiated settlement instead of a legal battle. This deal comes as a relief, said He Weiwen, the co-director of the China-United States-European Union Study Center at the China Association of International Trade in Beijing.

(...)

Link (New York Times)

Member states agree to fast-track youth money

A low-key EU summit finished Friday (28 June) with an agreement to fast-track money to tackle youth unemployment and boost lending to small companies, but the meeting was nearly overshadowed by side issues, including a colouring-book featuring fictional MEPs.

"It has been a very productive summit," said EU Council President Herman Van Rompuy, with governments pledging to spend €6 billion over the next two years to support getting young people into jobs or training.

They also agreed to "prioritise" any unspent money from the budget for employment issues, although critics say the sums are too small to make a difference to the EU's 26 million without work.

The European Investment Bank was given the nod to lend hundreds of billions of euros to small businesses - seen as the backbone of the economy, but currently starved of credit.

There was no progress on further steps to banking union, considered essential for ensuring the longterm stability of the eurozone. But the commission said it would come forward with plans on how to wind down failing banks - a key and controversial part of banking union - within two weeks.

(...)
Euobserver

EU agrees agriculture policy reform

EU member states and the European Parliament on Wednesday (26 June) agreed major changes to the bloc's Common Agricultural Policy (CAP). The deal will determine how the €50 billion a year pot is divided among countries over the next 2014-2020 period.

CAP - which eats up the biggest chunk of the EU budget - is meant to aid farmers throughout the EU, but has been criticised for the opaque way it distributes subsidies. The biggest losers in the new deal are set to be large farms in countries such as France and Germany, as the agreement changes how entitlements for subsidies are calculated, no longer tying historical production levels to direct payments.

To stop large farms losing too much of their current subsidies, the deal gives governments the option of limiting the losses to 30 percent. Farmers receiving the least amount of direct payments per hectare will be entitled to at least 60 percent of the national or regional average.

Other provisions include abolishing sugar quotas by 2017, mandatory aid for young farmers, and tying some direct payments to help the environment in rural areas.

(...)

Meanwhile, one issue which remains to be decided is a proposals to limit payments to large farms to €300,000 a year - something governments say should be optional but which parliament wants to be mandatory.

(...)

Under the compromise, 30 percent of all future direct subsidies would be dependent on farmers becoming greener, including leaving 5 percent of their arable land fallow for wildlife.

(...)

Euobserver

EU Releases Hungary From Budget Scrutiny

"European Union finance ministers on Friday released Hungary from the bloc's budget scrutiny after a series of at times controversial moves by the Hungarian government to boost revenue. 

Since Hungary joined the EU in 2004 it has been under review for having budget deficits significantly higher than the EU-mandated 3% of gross domestic product. The European Commission, the EU's executive arm, proposed to allow the country to exit the monitoring procedure in May. Friday's decision formally ends the process".

Link

Czech PM to quit over graft and spying scandal

Czech Prime Minister Petr Necas is to resign today over a corruption and spying scandal involving his closest aid. Although he has denied any involvement, his coalition partners have pulled their support.

The ruling coalition will now try to form a new government led by someone nominated by Necas’s own Civic Democratic Party (ODS)

“I’ve been following the political developments which began last Wednesday and I know full well what the consequences are for me. That’s why I have announced to the Civic Democratic Party management and also to our coalition partners that I will step down as prime minister,” said Petr Necas.

Pressure had been growing on Necas since his chief of staff, Jana Nagyova was charged with bribing members of parliament and ordering intelligence agents to spy on several people. One of the targets was Necas’s own wife who is divorcing him.

Police who raided government and private offices last week have also detained two former MPs, an ex-minister and the current and former heads of military intelligence.

Link

MEPs approve Mimica as Croatia's first commissioner

MEPs have cleared Neven Mimica to become Croatia's first commissioner when the country joins the EU on 1 July. Mimica, who currently serves as his country's deputy prime minister, will be consumer protection commissioner until next year's European elections provided he receives the backing of EU governments.

Link

EU ends arms embargo on Syria rebels

European Union foreign ministers have said they will not renew an arms embargo on the Syrian opposition, due to expire on Saturday. But there was no immediate decision to send arms to Syrian rebels and all other sanctions remained in force.

More...
BBC

EU summit backs shale gas 'revolution'

EU energy policy must shift towards diversifying supply, with natural shale gas likely to be part of the mix, EU leaders said at a summit in Brussels on Wednesday (22 May). (...)

For his part, European Council President Herman van Rompuy said the summit was the "right moment for a strategic debate on European energy policy." He noted that "Europe will soon be the only continent dependent on imported energy." He also called for increased investment in energy infrastructure and efficiency in a bid to cut costs. 

Energy prices in Europe are over twice the levels in the US. The emphasis on competitiveness and prices is an indication that environmental and climate concerns are falling down the EU's list of priorities, however. (...)

Link

Hollande calls for euro government

French President Francois Hollande has called for the creation of a eurozone government as a solution to the wide-spread recession that threatens "the very identity" of Europe. Hollande spelled out his views on Europe during a two-and-a-half hour long press conference in Paris on Thursday (16 May) after being accused of lacking leadership and vision for the EU project.

With record low popularity rates and on the back of news that France has slipped back into recession, Hollande said an economic government for the eurozone, with its own budget, right to borrow and harmonised taxes, is the only way out the economic slump. "It is my responsibility as leader of a founding member of the European Union... to pull Europe out of the lethargy that has gripped it," Hollande said.

"If Europe stays in the state it is now, it could be the end of the project," he warned. 

Hollande said he can imagine the new structures - which would require a change to the EU treaties - to come into force within two years. He admitted that this step towards deeper eurozone integration would be a hard sell in Germany, where the idea of a "transfer union" - mutualising debt and redistributing wealth across the bloc - is taboo.

"Germany has several times said it is ready for political union, for a new phase in integration. Well France is ready to give body to this political union ... It is a question of European urgency," he said.

He argued that while the financial crisis is now "behind us ... what is hitting Europe is recession, provoked by austerity policies." The German government is seen as a staunch defender of austerity policies, even though it has changed its discourse in the past few months and speaks more about youth unemployment.

Amid debate on the lack of personal chemistry in current Franco-German relations, Chancellor Angela Merkel in Berlin noted that she is not "bosom friends" with Hollande, but that they "get along fine." "What we need above all is a common understanding in Europe - and there unfortunately isn't one yet - of what actually makes us strong and where growth comes from," she said at a European policy forum also on Thursday.

Euobserver

Bulgarian Center-Right Wins Most of the Votes

The center-right party of former Prime Minister Boiko Borisov has fallen far short of winning a majority needed to form a government, according to nearly final election results released on Monday, and appears to have no willing partners to join a coalition.

That would leave the second-place party in position to lead a new government. Borisov's Citizens for Bulgaria's European Development party amassed the most votes with 30.7 percent, followed by the opposition Socialists with 27 percent with 96 percent of the ballots counted.

Results published by the Central Election Commission showed that two more parties will enter Parliament — the mainly Turkish MRF party with 10.7 percent and the nationalist Ataka party with 7.4 percent.

Borisov led his party to victory in 2009 with just under 40 percent of the vote and headed a minority government, but resigned as prime minister in February amid sometimes violent protests against poverty, high utility bills and corruption.

More...

Link

EU agrees China solar panel duties

The European Commission agreed on Wednesday to impose punitive import duties on solar panels from China in a move to guard against what it sees as Chinese dumping of cheap goods in Europe. EU commissioners backed EU Trade Chief Karel De Gucht's proposal to levy the provisional duties by June 6 and make Chinese solar exports less attractive in Europe, two officials said.

The investigation into accusations of dumping is the biggest the commission has launched but Brussels is trying to tread a careful path, knowing it needs China, the EU's second largest trading partner, to help the bloc pull out from recession.
China's ambassador to the World Trade Organisation, Yi Xiaozhun, called the decision a mistake although he declined to comment on any possible retaliation by Beijing. "It will send the wrong message to the world that protectionism is coming," Yi told Reuters in Geneva.
Given that Germany and France are seeking to increase exports to China, De Gucht will try for a negotiated solution with new Chinese Commerce Minister Gao Hucheng before an EU deadline in December to cement the levies for up to five years. That could mean agreeing a minimum price at which all solar panels makers selling in Europe adhere to, diplomats said.
The EU duties, which will come into effect once the Commission publishes the decision in its Official Journal, will be set at an average of 47 percent, officials said.
Chinese solar panel production quadrupled between 2009 and 2011 to more than the entire global demand. EU producers say Chinese companies have captured more than 80 percent of the European market from almost zero a few years ago, exporting 21 billion euros ($27 billion) to the European Union in 2011. As a result, Chinese-made panels are as much as 45 percent cheaper than those made in Europe, industry executives say. Europe accounted for half of the global market in 2012, which was worth $77 billion, according to research firm IHS.
The commission started its investigation in September, taking up a complaint by a group of mainly German and Italian companies led by SolarWorld, which was once Germany's biggest solar group but now has 900 million euros in liabilities. Its smaller rival Q-Cells filed for insolvency last year.
The United States levied its own duties on Chinese solar energy products in 2012, arguing that China's rapid expansion into the industry has created a massive oversupply.
Solar is the leading source of renewable energy after hydro and wind, and companies are in a race to win contracts as countries seek to limit pollution and global warming.
Germany was the world's biggest market last year, followed by China, Italy and the United States, according to the European Photovoltaic Industry Association. Germany installed more solar panels than any other country in 2012, at 7.6 gigawatts of newly connected systems, while China was second with 5 gigawatts.
Solar covers about 3 percent of Europe's electricity demands but government support for developing the green energy source varies widely across Europe with the euro zone debt crisis dampening government support in Spain and Greece.
Europe's stance on solar energy is complicated by the fact that some in the EU solar sector, notably importers and installers, support cheap panel imports from China. They say EU tariffs would be damaging for efforts to develop clean energy. Some fear retaliation by Beijing. "Protective duties are poisonous for the solar industry," said Udo Mohrstedt, chief executive of Germany's IBC Solar. "These guarding measures will endanger more than 70,000 jobs in medium-sized companies in Germany alone," he said.
Link

Enrico Letta sera-t-il l'homme qui a fait bouger Angela Merkel ?

Mariano Rajoy et Enrico Letta se sont entendus sur la mise en place d'une "task force" commune en vue de présenter un plan de sortie de crise à la zone euro au sommet européen de juin prochain. A la suite de sa tournée européenne, le chef du gouvernement italien a su réunir derrière lui un front en vue de présenter une alternative à la gestion de la crise par Angela Merkel. Pour le chef du gouvernement italien, qui risque gros sur le plan interne, l'enjeu est majeur. Reste à convaincre une chancelière allemande en pleine campagne électorale de faire un geste...
Lire la suite ici.

David Cameron’s Conservatives suffer blows in UK local elections from anti-EU UKIP

David Cameron’s Conservatives took a drubbing in local elections amid a surge of support for an anti-European Union and anti-immigration party, heaping pressure on the British prime minister to appeal to the dissident right-wing of his own party. Echoing results across Europe, British voters appeared to punish the ruling government, fed up with economic doldrums and austerity measures. Britain’s nationalist party appeared to be the recipient of a sizeable protest vote against the political elite and the EU, analysts said.

According to returns Friday from 34 contests across England, the right-wing United Kingdom Independence Party, or UKIP, won 139 county council seats, while the mainstream opposition Labour Party gained 291. The Liberal Democrats — junior partners in Britain’s coalition government — were down 124 county council seats, while Cameron’s ruling Conservatives lost 335 seats in Thursday’s vote.

UKIP leader Nigel Farage — whose party Cameron once referred to as a bunch of “fruitcakes, loonies and closet racists” — said the results will send a “shock wave” through the British political establishment. “This is a real sea-change in British politics,” Farage told the BBC.

More...

ECB cuts interest rates, open to further action

The European Central Bank cut interest rates for the first time in 10 months on Thursday and held out the possibility of further policy action to support the recession-hit euro zone economy. Responding to a drop in euro zone inflation well below its target level and rising unemployment, the ECB lowered its main rate by a quarter percentage point to a record low 0.50 percent.

ECB President Mario Draghi, promising to provide as much liquidity as euro zone banks need well into next year and to help smaller companies get access to credit, also indicated that some policymakers had pushed for a bigger cut. "There was a very, very strong prevailing consensus towards an interest rate cut," he told a news conference after the ECB's Governing Council met in Bratislava. "Within that, there was a prevailing consensus for a cut of only 25 basis points."

Reuters

Italy’s new government wins 1st confidence vote

Italy’s new government easily passed its first confirmation vote Monday in Parliament after Premier Enrico Letta made concessions to his uneasy coalition allies, promising to ease part of a slate of austerity measures that have weighed on Italians impatient at the slow pace of economic recovery.

While pledging the country will do what the eurozone wants to improve its public finances and debt problem, the center-left leader has to placate his tense two-day-old coalition, including former premier Silvio Berlusconi’s conservatives, whose support he needs for confirmation. (...)

Bending in part to a key Berlusconi campaign promise, Letta said his government will immediately suspend an unpopular tax on primary residences due in June and make it fairer to less affluent taxpayers. He also pledged not to raise the sales tax and to reduce some payroll taxes. “Reducing taxes is a priority,” Letta said, promising he would “pinpoint a strategy to revive growth without interfering with the process to heal finances.”

The European Union has insisted on rigorous austerity to heal Italy’s finances, but the public’s patience has been tried by spending cuts and higher taxes. Voters across the continent have been rebelling against governments that have imposed such measures. While Letta stressed the urgency of reducing the tax burden on homeowners, consumers and businesses, he didn’t say how he planned to make up for the reduced revenues. He might have to resort to more spending cuts, which could ultimately sharpen an already harsh part of the austerity agendas. (...)

Intent on reassuring eurozone governments and European Union officials that despite his demanding coalition partners, Italy’s would stay the course of economic reform, Letta will soon visit major European capitals. He begins in Berlin on Tuesday, assuming his government wins the Senate confidence vote. He’ll also visit Paris and Brussels to give, as he put it, a “sign that this is a European and a pro-Europe government.”

He vowed to keep the sales tax from rising to 22 percent from 21 percent in July, as predecessor Mario Monti’s government had planned. Italy’s business sector is worried the higher tax would discourage consumers from buying everything from washing machines to new clothing. The new premier also pledged to reduce payroll taxes for businesses hiring the young or those currently on temporary work contracts.

Italy’s central bank said Monday that Italian companies were suffering ever more as loans dry up, with banks reluctant to make risky deals. Italians are impatient after 18 months of austerity budget, pension reform and new taxes under Monti to see jobs return and the small and medium firms that power the economy bounce back. Letta denounced the “anger and conflict” that the five-year economic slump has triggered.

On Sunday, an unemployed man shot and wounded two police officers Sunday in a crowded square outside the prime minister’s office at the same time the government was being sworn in elsewhere in the capital. 

The premier indicated his impatience with the political class’ failure to enact reforms. He indicated that he would give this legislature 18 months to make serious inroads or he might throw in the towel. However, virtually nobody expects the new government to last anywhere near Parliament’s five-year term.

WP

Euro-Area Economic Confidence Falls More Than Forecast

Economic confidence in the euro area decreased more than economists forecast in April as the 17- nation currency bloc struggled to emerge from a recession and the bailout of Cyprus renewed debt-crisis concerns.

An index of executive and consumer sentiment dropped to 88.6 from a revised 90.1 in March, the European Commission in Brussels said today. That’s the lowest since December. Economists had forecast a decline to 89.3, according to the median of 26 estimates in a Bloomberg News survey.

Business confidence and investor sentiment in Germany, Europe’s largest economy, dropped more than expected in April. European Central Bank President Mario Draghi said on April 19 that the economic situation in the bloc hadn’t improved since the beginning of the month. At the same time, Draghi expects the economy to recover from a recession later this year and economists forecast growth in the second quarter, a separate Bloomberg survey shows.

(...)

A gauge of sentiment among European manufacturers fell to minus 13.8 from minus 12.3 in March, today’s report showed. An indicator of services confidence dropped to minus 11.1 from minus 7, while consumer sentiment improved to minus 22.3 from minus 23.5.

With doubts about an economic recovery later this year growing, ECB policy makers have signaled they’re looking at a range of measures to boost growth, including cutting interest rates and a program to support lending to small and medium-sized companies. They are due to convene on May 2 in Bratislava for their monthly meeting.

“The flawed bailout in Cyprus has revived uncertainty in Europe,” said Annamaria Grimaldi, an economist at Intesa Sanpaolo SpA in Milan. “But I think the concerns are only temporary and we will see modest growth in the second half of this year.”

(...)

Link

Spain begs time to fix finances

Spain forecast it would climb out of its bitter recession in 2014 but needed two extra years to meet the European Union's target for reining in its public deficit. It announced its latest gloomy growth forecast for the current year along with a "stability plan" that aims to spur economic growth after more than a year of harsh cutbacks.

The government said Spain's economy, the eurozone's fourth-biggest, would shrink by 1.3 percent in 2013 and timidly return to growth of 0.5 percent in 2014. But it admitted it would likely take until 2016 to bring the country's public deficit -- a crucial measure of financial stability -- under the European Union's three-percent limit.

Unemployment will slide to 26.7 percent over 2014 and to 25 percent in 2015, the government added, announcing the latest crisis reforms it must send to Brussels for approval.

It forecast the public deficit would be 6.3 percent of gross domestic product (GDP) in 2013 -- well above its earlier target of 4.5 percent. The deficit would ease to 2.7 percent by 2016, it said, pushing back by two years the target earlier agreed with European authorities to bring it within the three-percent limit.

The EU's executive later approved the announcement, saying in a statement that it considered Spain's plan a "balanced -- but still ambitious -- fiscal consolidation path, given the difficult economic environment".

The 2013 growth figure, sharply down from an earlier estimate of a 0.5 contraction, reflected the ongoing damage from the collapse of a building boom in 2008 that thrust Spain into a deep double recession. "In 2013 the worst quarter will be the first quarter... and from there the data will improve," Finance Minister Luis de Guindos told a news conference. "The year 2014 is the year of recovery. We will reap the fruit of our economic policies." Meanwhile the public debt would climb to 91.4 percent of GDP in 2013 and reach 99.8 percent by 2016, he said.

The government is fighting to stabilise Spain's public finances through austere economic cuts that have sparked angry street protests. Budget Minister Cristobal Montoro on Friday called it "a Titanic austerity effort". Prime Minister Mariano Rajoy says the steps are needed to curb the public deficit and help the country save 150 billion euros ($195 billion) by 2014.

Link

EU rolls back sanctions on Myanmar, Syria

The EU has said it would ease back on economic sanctions against Myanmar despite objections from Human Rights Watch. An oil embargo against Syria is also to be lifted to help rebels fighting President al-Assad.

More...

Commission backs membership talks with Serbia

The European Commission on Monday recommended opening membership negotiations with Serbia following Friday’s historic deal with Kosovo. Belgrade and Pristina agreed a tentative accord last week aimed at normalising relations. Štefan Füle, the EU enlargement commissioner, said: “Serbia and Kosovo have proved that they can both focus on the future rather than staying entagled in the past.

The deal looks to end the ethnic partition of Kosovo between its Albanian majority and its Serb minority. Belgrade says it will not recognise Kosovo’s independence but will cede control of the country’s north to Pristina.

For Swedish Foreign Minister Carl Bildt, a former UN envoy in the Balkans, the agreement marks a turning point in the region.“The implementation of the commitment will not be easy, but there’s no way back. While we’ll be struggling with the details of implementation for quite some time to come, the rubicon has been passed,” Bildt told reporters in Luxembourg.

MPs in Serbia and Kosovo have backed the deal. It paves the way for Belgrade to open talks on joining the EU and European leaders will decide in June if Serbia is ready to start negotiations.Euronews’ Andrei Beketov said Belgrade and Pristina should fail to win over hardline nationalists and “translate words of congratulations into action then the door to the Union could be slammed shut to them.”

Euronews

Abysmal turnout in Croatia's EU vote

Two and a half months before Croatia joins the EU, just 21 percent of voters bothered to cast ballots in Sunday's (14 April) election of 12 new MEPs. 

The turnout is less than half compared to the country's referendum on EU accession in January last year, which saw 43.5 percent of people vote. It is also one of the lowest ever in EU polls, a record held by Slovakia in 2004, when just 17 percent of people voted.

Croatia's opposition centre-right HDZ party won six seats, narrowly beating the ruling centre-left SDP faction with five deputies. The nationalist and left-wing Labour party got one MEP.

The winners will act as observers with no voting rights in the EU assembly until Croatia joins the Union on 1 July. They will then serve for one year, before Croatia chooses a new set of euro-deputies in the general EU elections next May.

Link

Top five EU states push for tax transparency

France, Germany, Italy, Spain and the UK have agreed to more automatic exchanges of banking data to fight tax evasion, increasing pressure on Austria and Luxembourg to give up their veto on the equivalent EU bill. In a joint letter to the EU commission sent on Tuesday (9 April), the finance ministers of the five largest EU countries say they have agreed on a "pilot" project of "automatic information exchange" aimed at fighting tax evasion. The initiative is open to other member states and is based on a recently adopted law in the US - the Foreign Account Tax Compliance Act - that requires US citizens to declare their bank accounts held abroad and foreign banks to notify US tax authorities about their American clients.

A similar EU-wide law has so far been held up by Austria and Luxembourg, both keen on preserving bank secrecy for domestic and foreign clients. The five finance ministers "call on all EU member states to agree without delay" on the bill, so that "Europe can take a lead in promoting a global system of automatic information exchange, removing the hiding places for those who would seek to evade paying their taxes." (...)

Euobserver

Czech President Seeks Deeper EU Role for Country

The Czech Republic is turning over a new leaf aimed at winning it a bigger say over decision-making in the European Union where it has been somewhat isolated by its eurosceptic leaders in the last decade. Czech President Milos Zeman, who replaced the anti-European Vaclav Klaus last month, took his first symbolic steps Wednesday towards giving the country a more central role in helping Europe evolve.

Mr. Klaus and several Czech Prime Ministers have in recent years obstructed, delayed or watered down a series of EU initiatives such as the Lisbon Treaty and  Banking Union proposals. European Commission President Jose Manuel Barroso was alongside Mr. Zeman when he signed an addendum to the Lisbon Treaty that established the European Stability Mechanism, the euro zone’s bailout program. (...)

Immediately after putting pen to paper, Mr. Zeman and Mr. Barroso raised the EU’s blue and gold flag above the historic Prague Castle, the seat of the Czech Presidency, for the first time. “It’s a symbol of our entrance into the main current of European integration,” Mr. Zeman said. 

(...)

Link

Belgium agrees savings, asset sales to meet EU budget demands

Belgium agreed to make 1.4 billion euros ($1.8 billion) of savings and to sell 1 billion euros of state-owned assets on Saturday, as it strives to meet EU budget targets and avoid being drawn into the euro zone's debt crisis.

With debt approaching 100 percent of national output (GDP), Belgium has some of the weakest public finances in the euro zone's northern "core", partially due to an almost two-year political stalemate that was only resolved in late 2011.

Its six-party government has taken steps since but, like other euro zone members, looks set to miss the targets set by the European Union due to poor economic growth. 

The 1.434 billion euros, an addition to 2013 savings already announced last year, will reduce the country's structural deficit - a measure of the underlying shortfall on public finances allowing for the ebb and flow of the economic cycle - by 1 percentage point, it said. "The government repeats its wish to bring its budget into structural balance by 2015. This is a new, important step to reach that goal," Prime Minister Elio Di Rupo told a news conference, hours after an early morning breakthrough.

Olli Rehn, EU Commissioner for Economic and Monetary Affairs, gave clearance in the past week for Belgium's deficit this year to be greater than the planned 2.15 percent of gross domestic product (GDP), according to government sources. But Belgium still needs to reduce its structural deficit, excluding one-offs and smoothing for cyclical factors, to 1.8 percent, keep its overall debt level below 100 percent of GDP and achieve a structural budget balance by 2015.

The additional savings, a huge series of measures ranging from a reduction in support for the national railway operator to an increase in duty on tobacco, would result in an overall budget deficit of 2.46 percent of GDP.

(...)

Belgium would need to find a further 1 billion euros from asset sales to ensure national debt did not rise beyond 100 percent of GDP (...). Belgium did little in the way of budgetary consolidation in 2010 and 2011, due to the absence of a fully fledged government after an inconclusive election. But despite a spike in its borrowing costs at the end of 2011, economists say it now belongs firmly to the safer "core" of the euro zone.

Reuters

EU launches debate on 2030 targets

The European Commission has officially launched what promises to be a contentious debate over greenhouse gas reduction and renewable energy targets for 2030. In releasing its "green paper" on a 2030 framework for climate and energy policies Wednesday, the commission kicked off a three-month process during which it will gather feedback from member states, industry players, environmentalists and others as it seeks to extend climate change efforts beyond the current binding 2020 targets. The European Union sees the 2030 framework as an interim step along the path to its ambitious low-carbon energy "road map" for 2050, which envisions reducing greenhouse gas emissions to 80-95 percent less than 1990 baseline levels.

(...)
Link

EU leaders avoid clashes

The first day of a lacklustre EU summit dedicated to economic issues ended last evening (14 March) with France and Italy winning support for a slightly more growth-friendly interpretation of European Union budget rules.

France's push for a more growth-friendly interpretation of EU budget rules appears to have paid off. French officials said they were satisfied with the summit conclusions, which state that "the possibilities offered by the EU's existing fiscal framework to balance productive public investment needs with fiscal discipline objectives can be exploited in the preventive arm of the Stability and Growth Pact”.France's budget deficit will hit 3.7% of gross domestic product this year, missing the 3% target.

German Chancellor Angela Merkel was careful to avoid any ideological clash, telling reporters: "We made clear in a very consensual discussion that budget consolidation, structural reforms and growth are not in contradiction but are mutually reinforcing." She appeared to give ground to detractors who criticised her for ignoring calls for a more growth-friendly approach to EU budget rules, saying: "We have decided on a growth pact in the summer of last year and now this growth pact has to be filled with life. The money is there but it has to reach the people, so the young people in Europe get jobs and we still do everything to become competitive and grow."

French officials told journalists that implementation of the European Growth Pact, agreed in June last year, was more important that “reinventing growth” at every new summit meeting. France attaches special importance to the €120-billion Growth Pact agreed last June, which is largely funded by unused structural funds and European Investment bank financing. The implementation of the Pact, which will secure for France projects to the value of €12 billion, is due in June despite doubts over its effectiveness in the short term.

The situation in Italy, where fiscal consolidation and austerity have led to a political stalemate following the elections, appears to be taken in consideration by EU leaders. “The Italian elections are an indication that we should listen to what the peoples of Europe are telling us,” a French diplomat said.

European Council President Herman Van Rompuy said leaders were “fully conscious of the debate, the mounting frustrations and even despair of people. He said the EU’s overall economic strategy had four stands: Restoring financial stability, ensuring sound public finances, urgently fighting unemployment, and reforming for long-term growth and competitiveness. “These four strands are clear and consistent, and we need all four at the same time,” Van Rompuy said. 

Mirroring statements made by French diplomats, Van Rompuy said that growth would not come for free, but rather as a result of fiscal consolidation. “Growth and jobs are not things governments can buy or summon. It is our overriding objective, a result, for which we have to keep striving. The question is finding a good balance, setting priorities, making the right choices. That's what our discussion was about,” Van Rompuy said.

European Commission President José Manuel Barroso said he had put on the table a whole series of proposals to stimulate growth, but lamented that their implementation was “too low and too slow”. He said he welcomed wording in summit conclusions that call for the Council and the European Parliament to move quicker to implement many of those measures. Among them, he mentioned the Compact for Growth and Jobs and the Youth Employment Initiative.

Analysts say the Youth employment initiative, worth €6 billion, is far too small to make an impact, amounting to barely €100 for each young person without a job across the 27 EU states.

Link

EU agrees to cap bank bonuses, lift capital requirements

The EU has agreed landmark rules capping bank bonuses after an agreement between MEPs and governments struck in the small hours of Thursday (28 February). The deal, which also increases the amount of capital banks must keep on their balance sheets, will cap bonus payments at the same level as the annual salary, with special dispensation to pay a bonus of up to twice the salary if an absolute majority of shareholders vote for the higher payment. The regime, which is composed of a directive and a regulation, puts the rules drafted by the Basel III committee of the Swiss-based Bank of International Settlements into EU law.
The UK government was among the opponents to the new bonus regime, with national officials claiming that banks would merely hike salaries in order to attract top staff.London Mayor Boris Johnson condemned what he described as "self-defeating policies” adding that “Brussels cannot control the global market for banking talent. The most this measure can hope to achieve is a boost for Zurich and Singapore and New York at the expense of a struggling EU,” he said.

The package increases the amount of capital that banks need to hold, as well as a leverage ratio to limit excessive build-up of borrowing on banks’ balance sheets. It introduces capital buffers on top of the minimum capital requirements.
Austrian conservative MEP, Othmar Karas, who led the European Parliament's negotiating team on the package, said that "for the first time in the history of EU financial market regulation, we will cap bankers' bonuses.""But this is not the most important part of the new rules. The essence is that from 2014, European banks will have to set aside more money to be more stable and concentrate on their core business, namely financing the real economy, that of small and medium-sized enterprises and jobs," he added.
Irish finance minister Michael Noonan, who brokered the deal, said "this overhaul of EU banking rules will make sure that banks in the future have enough capital, both in terms of quality and quantity, to withstand shocks. This will ensure that taxpayers across Europe are protected into the future." (...)
The EU and US have already missed the original deadline of January 2013 to begin the implementation of Basel III, but are expected to apply the regime from January 2014.
Euobserver

Slovenian government collapses

Slovenia’s Prime Minister Janez Jansa was ousted from office in a no-confidence vote on Wednesday (28 February) amid economic gloom compounded by persistent allegations of corruption. (...)

Hit with a deep recession, Slovenia’s economy is expected to contract more than any other member state, except for Greece and Cyprus. The scandals and the economic problems have since caught up with Jansa’s minority government as junior coalition partners, the centre-right Civic List and pensioners' party Desus, abandoned the pro-austerity party bloc.

The state’s anti-graft watchdog accused Jansa of hiding away €210,000 of personal assets to avoid paying tax. In early February, some 20,000 took to the streets to protest the political corruption, rising unemployment, and erosion of social benefits.

Jansa maintains his innocence but lawmakers on Wednesday voted him out anyway. His replacement is 42-year old centre-left opposition leader Alenka Bratusek who is now tasked by the deputies to form a new government.

Bratusek oversaw the state budget during a six-year stint in the ministry of finance. She joined the parliament in December 2011 and will now become Slovenia’s first woman head of government.(...)

The tasks ahead included reforming an ailing banking system that has accrued around €7 billion of bad loans, reports Reuters. A €2 billion debt will also mature in mid-2013, adding further complications to a state trying to avoid becoming the sixth eurozone country to ask for a bailout. Bratusek, who has voiced her opposition to austerity in the past, said the priorities are creating growth and jobs. (...)

Euobserver

Italy in turmoil after election delivers hung parliament

Italy was plunged into turmoil on Monday (25 February) after parliamentary elections delivered a hung parliament with firebrand comedian, Beppe Grillo, holding the balance of power. The political paralysis, which seems certain to see Italians going to the polls for a second time, threatens to drag the eurozone's third largest economy back into crisis.

With nearly all votes counted, the centre-left coalition led by Pier Luigi Bersani's Democratic party (PD) had claimed a narrow victory in the polls for both chambers of the Italian parliament but was left well short of a majority in the Senate. After claiming 31.6 percent compared to 30.3 percent for Italy's populist former leader Silvio Berlusconi, the Democratic party was set to claim 123 Senate seats, to Berlusconi's 118.

Grillo's FIve Stars Movement took 53 seats on 24 percent, while the centrists led by EU-backed technocrat Mario Monti got only 19 seats. With 158 members needed for a Senate majority, Grillo's anti-establishment party would hold the balance of power.

Control of both parliamentary chambers is required to sustain a government. Meanwhile, Bersani was set to claim a majority in the lower house after defeating Berlusconi by a narrow 29.7 percent to 29.1 percent margin. Under Italian election law, the biggest party in the Chamber of Deputies is awarded 54 percent of the seats.(...)

The results are a disaster for outgoing technocratic PM Mario Monti, whose centrist coalition was relegated to a distant fourth place.(...) The vote also deals a huge blow to Bersani, who had promised to stick to the reform programme of Monti alongside targeted measures to stimulate job creation. Initial exit polls had pointed to a 5-7 point win for Mr Bersani. Senior EU officials had also been quietly hoping for a government led by Bersani and Monti. 

Despite the Monti reforms, which are expected to see Italy run a balanced structural budget in 2014, the country remains deep in recession, with Greece the only EU country to have a bigger debt burden. The uncertainty filtered through to the financial markets, with the euro hitting a six week low of 1.31 against the dollar. Meanwhile, yields on Italian 10 year bonds edged up four basis points to 4.49 percent.

Link to Euobserver

Cyprus bailout in sight as new president elected

EU officials have welcomed the election of conservative leader Nicos Anastasiades in Cyprus, raising hopes of a speedier bailout deal for the troubled euro country. Anastasiades won 57.5 percent of the vote on Sunday (24 February). (...)

Cyprus formally asked for a eurozone bailout last summer, as its cash-strapped banking sector is struggling with the consequences of a debt restructuring in Greece, part of Greece's own bailout deal in spring last year.

(...)

Outgoing Cypriot President Demetris Christofias, the only Communist leader of an EU country, had stalled talks on the €17bn bailout by refusing to allow privatisations to be part of the deal. 

But in an interview with the Financial Times before the Sunday elections, Anastasiades also said that privatisations should be postponed for at least three years and warned against a German demand to have banks take losses and reduce the island's bloated financial sector. He made the comments while still in campaigning mode ahead of negotiations with the troika of international lender on how to reduce the size of a bailout, as the €17bn would create too much debt for the country to pay back - over 140 percent of GDP.

(...)

Revenues from privatisations, recently discovered gas reserves and a 'bail-in' contribution of the banking sector should cover the gap, says Berlin. Concerns about money laundering on the tax-haven island, particularly by Russian and Ukrainian oligarchs, are complicating a bailout deal still further.

Meanwhile, Cypriots face a 15 percent unemployment rate as well as tax hikes and wage cuts, but Anastasiades will have little room for manoeuvre on further austerity measures demanded in return for the bailout. A clear deadline to avoid bankruptcy is 3 June, when Cyprus has a €1.4 billion bond repayment. Last week, Standard&Poor's ratings agency said the risk of a Cypriot default is "material and rising."

Euobserver.com

Lemondott a bolgár kormány

Mindenkit meglepve az országban kirobbant tüntetésekre válaszul váratlanul bejelentette lemondását Bojko Boriszov bolgár miniszterelnök, pedig kedden még úgy tűnt, hogy nemcsak hűséges miniszterét áldozza be, de az indulatok csitításáért a cseh állami áramszolgáltatóval is kész ölre menni. Többen taktikának gondolták bejelentését, de egyre valószínűbb, hogy a parlament csütörtökön elfogadja a Zsivkov volt testőre által vezetett kormány távozását.

„Minden tőlünk telhetőt megpróbáltunk, hogy megfeleljünk a tüntetők kérésének, mától már nem tudunk többet tenni értük. Nem tudom tovább nézni, hogy kordonok veszik körül a parlamentet, nem az a cél, hogy a néptől védjük magunkat” – dramatizálta a helyzetet Bojko Boriszov bolgár miniszterelnök, aki szerdán mindenkit meglepve bejelentette lemondását.

„Minden csepp vér szégyen ránk nézve” – utalt arra, hogy a többek között az áramárak ellen tiltakozó tüntetők az elmúlt napokban összecsaptak a rendőrökkel. Rövid beszédében megemlítette a kormány sikereit is, mint például az épülő autópályákat, parkolást és metróépítést is a bolgár kormányfő, aki az éjszakába nyúló EU-tárgyalásokon is rendszeresen észrevétette magát, amikor szokás szerint elsőként távozott a gyűlésekről.

A tűzoltóparancsnokból lett, korrupcióval is vádolt politikus lemondása meglepetésként érte a bolgárokat, hiszen kedden még határozottan kijelentette, hogy nem hajlandó távozni posztjáról. A miniszterelnöki hivatalban a Standardt szerint teljes volt napközben a káosz, mindenkit váratlanul ért a bejelentés. A káoszt nem csökkenti Boriszov kijelentése, hogy ha nem kellett volna lemondania, akkor ma bejelentette volna a fizetések és nyugdíjak ötven százalékos emelését.

Először többen úgy gondolták, hogy Boriszov valójában csak zsarolni próbált, ha pedig a parlament meghátrál, akkor jelentősen megerősödve kerülne ki a kockázatos játékból, de szerda estére egyre valószínűbbé vált, hogy tényleg távozik posztjáról. Boriszov lemondásáról mindenesetre csütörtökön szavaznak a képviselők, és az is biztos, hogy távozásával nem oldódik meg automatikusan a Bulgáriában kitört felfordulás.

A BBC szerint Boriszov egészen a múlt hétig időt nyert magának a megszorítások közepette annak köszönhetően, hogy nem volt hajlandó hozzányúlni a fizetésekhez és a nyugdíjakhoz. Azonban napok óta tízezrek tüntettek Szófiában és több nagyvárosban. A tiltakozók elsősorban a magas, 13 százalékkal megemelt áramárak miatt vonultak utcára, de sokan nemcsak az áramszolgáltatók államosítását, de a kormány lemondását is követelték. Boriszov kormánypártját a reformok elmaradása, az alacsony jövedelmek és a korrupció elleni intézkedések hiánya miatt is támadták.

A tojást, gyümölcsöket dobáló tüntetők villanyszámlákat is elégettek, rátámadtak az áramszolgáltató telephelyeire, elbarikádozták az egyik autópályát, és kövekkel dobálták meg a parlamentet. Az elmúlt évtized legnagyobb tömegdemonstrációiban Veliko Tarnovóban életét vesztette egy kormányellenes tüntető, miután benzinnel leöntötte, és felgyújtotta magát. Az elmúlt napokban huszonöt embert szállítottak kórházba az Európai Unió legszegényebb országában.

Az első napokban még semmi nem utalt arra, hogy Boriszov a lemondásba menekülne, sőt, úgy tűnt, hogy még Csehországgal is kész egy komolyabb csörtére a villanyszámlák visszaszorításához. Hétfőn első körben leváltotta Szimeon Gyankov pénzügyminisztert, egyben miniszterelnök-helyettest, akinek a neve összeforrt a megszorításokkal, az ellenzék szerint ugyanakkor csak bűnbaknak próbálták beállítani.

Kedden aztán azzal próbálta tovább csitítani az indulatokat, hogy megígérte az áram árának csökkentését. A kormány javaslatában a Reuters szerint az energiaárak 8 százalékos csökkentése szerepelt márciustól, ennek kikényszerítésére az országban jelenlévő három áramszolgáltató, a cseh CEZ, a szintén cseh Energo-Prót és az osztrák EVN állami szankciókkal fenyegették, a A bulgária nyugati részén 1,9 millió háztartást ellátó CEZ-t konkrétan azzal, hogy szolgáltatási jogát is megvonhatják.

Már a retorziók felvetése is szinte hadüzenettel ért fel, hiszen a CEZ, a legnagyobb közép-európai áramszolgáltató 70 százalékban a cseh állam tulajdona. A cseh kormány már kiállt a vállalat mellett Albániában is, és a bolgár felvetést is aggasztónak nevezték, miközben a CEZ vezetése azzal vádolta Boriszovékat, hogy csak szavazatokat reméltek a bejelentéstől. Szerdán aztán újabb fordulatként kiderült, hogy megismétlődik az 1997-es forgatókönyv: akkor a pénzügyi szektort érintő válság és a hiperinfláció miatt robbantak ki tüntetések, a tiltakozók megrohamozták a parlamentet is, a kormány pedig néhány nappal a demonstrációk után bejelentette lemondását. Ahogy most Boriszov is.

(...)

A támadások és lemondása ellenére ugyanakkor így sem elképzelhetetlen, hogy a még mindig 40 százalékos népszerűségi mutatójával Boriszov kerül megint olyan pozícióba, hogy kormányt alakíthat. Júliusban mindenképpen parlamenti választásokat kellett volna tartani, de egyre többen biztosak abban, hogy akár már áprilisban előrehozott választások lesznek, a parlamentet is fel fogják oszlatni. Bulgáriában már hosszú évek óta egyik párt sem tudott egyedül elegendő többséget szerezni a kormányalakításhoz, a 2009-es választások után a GERB 116 képviselőjével alakított kisebbségi kormányt a 260 fős parlamentben. A pártok azóta koalíciókba tömörültek pillanatnyi érdeküknek megfelelően, és a választásokra készülve sem emelkedett ki egyik vagy másik formáció.

(...)

Az országban teljes a káosz, az emberek és politikai elemzők találgatják, hogy mi következik. A politológusok még abban is megosztottak, hogy a lemondás jó vagy rossz Boriszovnak és pártjának. Abban megegyeznek, hogy a jövőbeli hatások az ellenzéki pártok reakcióin múlik. Boriszov és pártja úgy döntöttek, hogy ellenzékben vonulnak az átmeneti időszakra, teljesen az ideiglenes kormányra hagyva a kusza helyzet megoldását. Minden attól függ, hogy az ideiglenes kormány mennyire tud válaszokat adni a tüntetőknek és az elkeseredett tömegeknek. Mint ilyenkor lenni szokott, egymás után jelentkeznek miniszterelnöknek a kisebb pártok vezetői.

A tüntetések folytatódnak, a demonstrálók elfoglalták az Orlov hídat, több ezren a Parlament épületénél tiltakoznak. Megjelentek azok is, akik szerint még mindig Bojko Boriszov a megoldás és szimpátiatüntetések alakultak ki mellette is. Az emberek lelkiállapotát és a közhangulatot jól jellemzi, hogy bolgárok ezrei osztják meg a nap kérdését Facebookon. A kérdés, kit választanának a következő választásokon, a válaszban pedig számos repülőgéptársaság közül lehet választani.

index.hu

EU Launches Military Training Mission in Mali

(...) On Monday, the European Union officially launched a training mission to the African nation. Its goal is to make the disparaged Malian army good enough to patrol the whole country, including its huge northern region, where French and African troops are fighting to unseat Islamist rebels who used the coup's chaos to grab control there.

The mission will "support stability in Mali and the Sahel, both now and in the future. Respect for human rights and the protection of civilians will be an important part of the training program," said EU foreign policy chief Catherine Ashton.

The 27-nation bloc was so eager to help that it sent the first 70 advisers to Mali 10 days ago so they could hit the ground running when the decision was made. More EU military experts will begin arriving in Bamako, Mali's capital, next month and the training will begin in April.

The decision by the bloc's 27 foreign ministers who were meeting in Brussels authorizes the deployment of about 500 people to Mali for 15 months at an estimated cost of €12.3 million ($16.4 million).

(...)

AP Link

EU, U.S. to start free trade talks

The United States and European Union aim to start negotiating a vast Transatlantic free trade pact by June, though the plan confirmed on Wednesday faces many hurdles before it might help revive the world's top two economies.

A deal would be the most ambitious since the founding of the World Trade Organization (WTO) in 1995, embracing half of world output and a third of all trade. It reflects impatience with the lack of a new global agreement to cut tariffs and ease commerce.

But after a year of preparatory discussions between Brussels and Washington, major differences remain, such as EU resistance to importing U.S. foodstuffs that are genetically modified.

"This is potentially a very big deal," said Michael Froman, White House deputy national security adviser for international economic affairs, a day after President Barack Obama endorsed talks with the 27-nation bloc in his State of the Union address.

In Brussels, EU Commission President Jose Manuel Barroso said: "These negotiations will set a standard, not only for our future bilateral trade and investment, including regulatory issues, but also for the development of global trade rules."

Once the U.S. Congress is notified and all 27 EU states assent to the talks going ahead, the sides hope for a deal by the end of 2014 - a tight deadline in international trade talks. A decade of argument among all world governments in the Doha round of trade negotiations has so far resulted in deadlock.

"If we want to go down this road, we want to get there on one tank of gas and we don't want to spend 10 years negotiating what are well known issues and not reach a result," Froman said in a conference call with journalists.

The collapse of Doha disappointed hopes that a worldwide cut in tariffs and other barriers to trade could boost the global economy. Creating preferential trade agreements (PTAs) between states, such as an EU-U.S. deal, may achieve some of the same ends, but many experts are concerned that breaking the world into blocs could end up creating new obstacles to global trade.
"The more problematic side of myriad different PTAs is that they create a hodgepodge of different regulations, standards and norms that can evolve into serious non-tariff barriers," said Keith Rockwell, chief spokesman at the Geneva-based WTO. He said it was too early to say what the impact of an EU-U.S. deal would be. U.S. and EU officials countered the criticism by saying their deal would set global standards for the world to follow in lowering a wider range of trade barriers.
However, creating jobs and economic growth on either side of the North Atlantic provide the main rationale for their alliance, given both economies are struggling to break free from almost five years of downturns and stunted recovery as well as increasing competition from China and other emerging economies.
The deal has support at the highest level, give an name check by Obama in his speech to Congress on Tuesday and cast as a central pillar of Britain's presidency of the G8 this year.

Under an agreed outline for the deal, the two sides expect it to add 0.5 percent to the EU economy and 0.4 percent to the U.S. economy by 2027, or 86 billion euros ($116 billion) a year for the Europeans and 65 billion euros for the Americans.
But EU Trade Commissioner Karel De Gucht has warned that the talks will be tough, with no "low hanging fruit". Import tariffs between the two are already not high - an average of 4 percent.
Negotiations will focus on harmonizing standards, from car seat belts to household cleaning products, and regulations governing services. These help ensure exporters can compete.
But fleshing out the negotiating plans could cause friction - last year it took EU trade ministers four months to persuade the European car industry to let Brussels officials talk to Japan about creating a similar free-trade pact.
AGRICULTURAL MUD
One of the key sticking points is likely to be agriculture, even though the deal will not tackle the politically poisonous issue of farm subsidies. When a Transatlantic trade deal was mooted in 1998, it was shot down by France, which feared Europe could be forced into too many concessions on farm trade.
"There is a reason we have not launched an effort of this nature in the past, because of some of these historic difficult issues that have frustrated our ambition," said U.S. Trade Representative Ron Kirk.
Leaders' fears of prolonged slump, however, may help a deal. Froman at the White House said the United States now believed "the stars could well be aligned, given developments on both sides of the Atlantic for us to resolve issues that we've never been able to resolve before".
Washington has long been frustrated by EU restrictions on U.S. farm produce, such as foodstuffs made with genetically modified organisms (GMOs), poultry treated with chlorine washes and meat from animals fed with the growth stimulant ractopamine.

In an early sign of EU reticence, Barroso said the negotiations would not compromise consumer health. "We will not negotiate changes that we do not want of the basic rules on either side, be it on hormones or GMOs," he said.
French Trade Minister Nicole Bricq said she would back a deal if it benefited France, long a vocal defender of its agricultural interests: "I will ensure that French interests are heard," she said.
Kirk said everything was on the table, "including all across the agricultural sector, whether it's GMOs or other issues". Froman said agricultural issues were not being put off but would be resolved before and during the main negotiation.
Another thorny issue that is unlikely to be resolved directly by the EU-U.S. negotiation is the battle over subsidies for Europe's Airbus and Boeing of the United States, the biggest and longest-running dispute in the WTO's history. But it could improve the mood and help usher in a settlement in the aircraft dispute.
Brussels has been negotiating possible free-trade agreements with more than 80 other countries, with some successes, such as a recent deal set to be struck with Singapore. But some talks, such as those with India, show no signs of ending. Talks with Canada since 2009 have also failed to settle differences over agriculture, intellectual property and public procurement.
Link

EU leaders agree budget cuts

After 24 hours of talks, EU leaders have struck today (8 February) a deal on the 7-year budget clamoring success, but have set themselves on a collision course with Parliament, which prepares to fight off the decision to cut spending that reflects austerity undertaken by many EU countries.

The long-term EU budget for 2014-2020 agreed today (8 February) is smaller than it was back in 2007-2013. It goes down to 1% from 1.12% of EU GNI. It is the first net reduction to the EU budget in the Union’s history. 

The EU leaders’ agreement sets the figure for “commitments” – the maximum amount of money allotted during the seven-year period – at €960bn, while budget “payments” – the amount of money that can actually be spent – have been severely reduced by €34bn to €908.4bn.

The most visible difference appears to be the increased rebates for Netherlands (from €650 to €695 million per year) and for Sweden (from €160 to €185 million per year), as well as a new country, Denmark receiving a rebate.

(...)

Parliament political leaders say will reject deal 

(...)“The European Parliament cannot accept today's deal in the European Council as it is. We regret that Mr Van Rompuy did not talk and negotiate with us in the last months,” the leaders of the four largest political groups stated in a press release published before the summit ended. 

Joseph Daul (EPP), Hannes Swoboda (S&D), Guy Verhofstadt (ALDE),  Rebecca Harms and Daniel Cohn-Bendit (Greens/EFA) slam the agreed EU budget, saying it risks to lead to structural deficit. “Large gaps between payments and commitments will only store up trouble for the future and not solve existing problems,” the four leaders stated. 

European Council President Herman Van Rompuy said the difference between commitments and payments was in the order of 5% and the EU executive had taken measures to narrow it down, not allowing for the deficit to mushroom

(...)
Link

Deal shaping up at EU budget summit

EU leaders appeared to be heading for a compromise on a headline figure of around €960 billion for the bloc's 2014-2020 budget, amid continued fighting over how much to cut the EU's finances. 

According to the latest figures circulated at the summit, the overall total level of the budget has been capped at €960 billion, down from the €972 billion, or 1.01% of EU’s gross national income (GNI). 

Meanwhile, the actual payments level has dropped from €935 billion to €908.4 billion, based on actual estimated expenditure within the current budget adjusted for inflation. 

That figure would enable the budget hawks, such as British Prime Minister David Cameron, to claim a decrease in the budget on the basis of the payments projections. Diplomats hailed the agreement, struck after a meeting between the leaders of Britain, France and Germany, as a breakthrough.(...)

A few figures have emerged from diplomats present at the summit. They indicate:

• The majority of the cuts come from the Connecting Europe Facility (sub-heading 1a “Competitiveness for growth and jobs”)
• An extra €1 billion was slashed from the administrative budget (less expected)
• The British and German rebates were untouched; the Danes won a rebate of €134 million, but these were still subject to negotiation, with the Netherlands and Sweden unlikely to be content with the €650 and €160 million rebates on offer to them; Austria's rebate was to be halved.
• The Common Agricultural Policy funding would rise slightly under the deal.

Euractive

Nato chief: EU must spend more on military

Nato chief Anders Fogh Rasmussen has urged EU countries to spend more on defence despite the economic crisis or risk losing US solidarity. He said in a foreword to the alliance's report on 2012, out on Thursday (31 January), that: "If current defence spending trends were to continue, that would limit the practical ability of Nato's European nations to work together with their North American allies. But it would also risk weakening the political support for our alliance in the United States." He added Nato is still "the most important military power in the world." But he warned: "The security challenges of the 21st century - terrorism, proliferation, piracy, cyber warfare, unstable states - will not go away as we focus on fixing our economies."

He also said "the rise of emerging powers could create a growing gap between their capacity to act and exert influence on the international stage and our ability to do so." 

The Nato report says the US accounted for 72 percent of Nato countries' defence spending in 2012 compared to 68 percent in 2007. France, Germany, Italy and the UK made up the bulk of the rest, but the French contribution fell steeply. "This has the potential to undermine alliance solidarity and puts at risk the ability of the European allies to act without the involvement of the United States," the report notes. 

It adds that Nato spending as a proportion of world military expenditure fell to 60 percent in 2011 from 69 percent in 2003 and is to hit 56 percent in 2014.

The angst over EU defence capabilities is not new. Former US defence chief Robert Gates in a speech in Brussels in 2011 also voiced alarm. "The blunt reality is that there will be dwindling appetite and patience in the US Congress - and in the American body politic writ large - to expend increasingly precious funds on behalf of nations that are apparently unwilling to devote the necessary resources or make the necessary changes to be serious and capable partners in their own defence," he said at the time.

Gates and Fogh Rasmussen's anxiety is not confined to Nato. Speaking in Brussels also on Thursday on the margins of an EU foreign ministers' meeting, Poland's Radek Sikorski said the Union needs a real defence force of its own. "I think the Mali crisis shows this is necessary because the next crisis could unfold even more quickly and we need to be able to react instantly," he told press. "Let's recall that events in Mali unfolded very fast. The terrorists crossed the line of contact and France reacted from one day to the next. But we know that in the EU, as in the Vatican, the wheels of state turn very slowly," he added.

Link

---

Mali shows holes in EU defence

Speaking to press on Saturday (2 February) at an annual conference on trans-Atlantic security in Munich, Germany, he noted that, as in the Libya conflict in 2011, France could not have carried out its bombing raids without US help."European allies still need strong support from the United States in their endeavours to carry out such an operation ... The Mali operation once again points to the need for increased European efforts to fill the gaps when it comes to essential military capabilities such as intelligence, surveillance and reconnaissance," he said.

"We saw that in Libya and in Mali the US has had to come and provide Intelligence Surveillance Reconnaissance assets, they have had to provide air-to-air refuelling tankers for jets," he noted. "These are just two capabilities where we have huge European shortfalls. The Europeans must invest to fill the gaps," he added.(...)"Security challenges won't wait while we fix our finances. And more cuts now will lead to greater insecurity in the future, at a cost we simply can't afford," he said.

For his part, US vice president Joe Biden told Munich that the US' new emphasis on Asia does not mean it will forget its World-War-II-and-Cold-War-era ally. "Europe is the cornerstone of our engagement with the world ... This engagement [with Asian countries] does not come at Europe's expense," he said. He noted that the fight against jihadists in north Africa "is fundamentally in America's interest." (...)
Link

Associate membership for Britain

Jacques Delors called for Britain to be given a 'privileged partnership' with the EU: participation in the single market, but not the common political structures. Now the Union of European Federalists have called for 'associate membership', again envisaged as a kind of amplified trade deal.

In both cases, the motive is uncomplicated: supporters of a United States of Europe know that they can't fulfil that objective while Britain has a veto. They therefore propose to give Britain a looser form of association, which would see that veto power disappear. In principle, the idea is an excellent one. You'd expect me to say that, of course: I've been proposing precisely such a trade-off for years. As always, though, it's the details that count. One part of the settlement is easy enough. Britain would lose its Commissioners and MEPs and would, in return, repatriate non-economic matters: foreign affairs, criminal justice, immigration, fisheries and so on. (...)

Link

Kiléphetnek az EU-ból a britek

A szigetország lakói 2015 után népszavazáson dönthetnek a tagságról.
A brit lakosság körében „minden eddiginél nagyobb a kiábrándultság" az EU-val szemben, ezért a brit kormány újra akarja tárgyalni viszonyrendszerét az unióval. A cél az, hogy Nagy-Britannia egy olyan Európai Unió tagja legyen, amelynek központi eleme az egységes piac, és amelyben az egyes tagállamok kormányai elsősorban saját nemzeti parlamentjeiknek tartoznak beszámolással – mondta David Cameron.
Ha erről az új viszonyrendszerről megszületik a megállapodás, azt a brit kormány népszavazásra terjeszti, „nagyon egyszerű" választási lehetőséggel: a választóknak arról kell majd dönteniük, hogy a kialkudott új viszonyrendszer feltételei alapján továbbra is az Európai Unióban kívánják-e látni Nagy-Britanniát, vagy inkább kiléptetnék az országot az EU-ból – tette hozzá a brit kormányfő.
A kormányfő szerint a népszavazást a 2015-ben kezdődő parlamenti ciklus első felében kell megtartani. Ez azt jelenti, hogy a referendumot legkésőbb 2017 végéig megtartják, ha a Liberális Demokratákkal koalícióban kormányzó Konzervatív Párt megnyeri a 2015-ben esedékes választásokat. A 2010 óta ellenzékben politizáló Munkáspárt ugyanis elveti az EU-tagságról szóló népszavazást.
(...)
Link

British PM Vows Referendum on EU

British Prime Minister David Cameron has announced that if his party wins the next election, he plans to renegotiate the terms of Britain's membership in the European Union and then ask the British people to vote on it.

Mr. Cameron made the comments in a long-awaited speech Wednesday in which he warned that public disillusionment with the EU is "at an all-time high." He said a new relationship with the EU should be one "with a single market at its heart."

He said the British people would then be given "a very simple in-or-out vote" on whether to accept the new terms or leave the EU. "So the next Conservative manifesto in 2015 will ask for a mandate from the British people for a Conservative government to negotiate a new settlement with our European partners in the next parliament. It will be a relationship with the single market at its heart and when we have negotiated that new settlement we will give the British people a referendum with a very simple in or out choice: to stay in the European Union on these new terms or to come out altogether."

The prime minister's announcement has displeased some of Britain's allies. German Foreign Minister Guido Westerwelle said Wednesday that Germany wants Britain to remain an active and constructive part of the EU. But he added that London cannot pick and choose only the aspects of membership it likes. The United States has said in the past that it wants Britain to remain a "strong voice" within the EU. The next British election is expected in 2015.

VoA

Mali training mission

EU foreign ministers have agreed to back a 15-month training mission for Mali's armed forces. At a crisis meeting on Thursday, ministers agreed to send out 500 non-combat troops and 200 soldiers to train Malian soldiers.
link

EU Unemployment Surged To Record 26 Million In November

Record unemployment and fraying social welfare systems in southern Europe risk creating a new divide in the continent, the EU warned Tuesday, when figures showed joblessness across the 17 EU countries that use the euro hit a new high. 

Eurozone unemployment rose to 11.8 percent in November, the highest since the euro currency was founded in 1999, according to the statistical agency Eurostat. The rate was up from 11.7 percent in October and 10.6 percent a year earlier.In the wider 27-nation European Union, the world's largest economic bloc with 500 million people, unemployment broke the 26 million mark for the first time.

But the trend is not uniform. Unemployment is increasing mainly in those countries, mostly in southern Europe, where market concerns over excessive public debt have pushed governments to make the toughest savings, pushing the economies into recession.States have raised taxes and slashed spending – including by cutting wages and pensions, measures that hit the labor force in the pocket and reduce demand in the economy.

Laszlo Andor, the EU's Employment Commissioner, warned the uneven impact of the crisis could create a rift. "A new divide is emerging between countries that seem trapped in a downward spiral of falling output, fast rising unemployment and eroding disposable incomes and those that have so far shown good or at least some resilience," said a statement from Andor's office. Last year `'has been another very bad year for Europe in terms of unemployment and the deteriorating social situation," said Andor. `'It is unlikely that Europe will see much socio-economic improvement in 2013."

More...