Slovakia: No Funds for Greece Bailout

Slovakia’s parliament rejected the nation’s participation in a loan for Greece, ending the European Union’s unity in handling the sovereign-debt crisis. The 69-1 vote, with 14 abstentions, reversed a decision by the previous Cabinet to lend Greece 816 million euros ($1.1 billion). Prime Minister Iveta Radicova's month-old government opposed the aid, saying poor countries shouldn’t pay for the profligacy of richer peers.

“The Slovak share is small, so it shouldn’t have much impact on the big picture,” said Timothy Ash, head of emerging markets research at Royal Bank of Scotland Plc in London. “On the other hand, the rejection is clearly a disappointment for the European Commission as Slovaks are thinking outside the box.”

Olli Rehn, the EU’s economic affairs commissioner, called Slovakia’s decision a “breach of the commitment” the previous government made as part of the so-called eurogroup of countries. “The eurogroup’s decision was a crucial act at a critical moment to safeguard financial stability of the euro area as a whole, including Slovakia,” Rehn said today in a statement. “I can only regret this breach of solidarity within the euro area, and I expect the Eurogroup and the Ecofin Council to return to the matter in their next meeting.”

Slovak Finance Minister Ivan Miklos has said EU fiscal rules should be changed to allow for the default of euro-member nations. Slovakia, the euro region’s poorest member by per- capita gross domestic product, was asked to pay too large a share of the Greek loan package, he said July 30.

“Many people in Germany and rich EU countries would have a lot of understanding for the Slovak position,” Ash said. “It shouldn’t be inevitable that every country gets a bailout.”

Earlier, lawmakers approved Slovakia’s participation in the European Financial Stabilization Facility, an entity that would sell debt secured by 440 billion euros in national guarantees and use the proceeds to provide loans to distressed euro-region members. Slovakia’s share in potential guarantees amounts to 4.4 billion euros.

Bloomberg

Megkezdődnek a csatlakozási tárgyalások Izlanddal

Az Európai Unió általános ügyekkel foglalkozó Tanácsa tegnap (2010. július 26.) zöld utat adott az Izlanddal folytatott tárgyalások megkezdésének – a skandináv ország csatlakozásáról szóló egyeztetések ma veszik kezdetüket egy kormányközi konferencia keretében.

Euvonal

Czech Fiscal Plans

The Czech Republic’s credit rating may be increased if the new government delivers on its promise to cut the budget deficit, Moody’s Investors Service said, pushing the koruna up as other east-European currencies fell.

The three-party government, named on July 13, has pledged to reduce the public-finance deficit to the European Union limit of 3 percent of gross domestic product by 2013, from the 2010 target of 5.3 percent. Moody’s rates the Czech Republic A1, its fifth-highest investment grade, with a stable outlook. “If we see a resumption of real convergence towards core Europe that could put upward pressure on the rating,” Dietmar Hornung, a senior sovereign-risk group analyst at Moody’s, said in a July 16 interview. “And if the fiscal plans were to be implemented as planned and result in stabilization” of debt ratios “that would also be reassuring.”

The deficit widened last year as the global economic crisis cut demand for Czech exports, including cars made by the local units of Volkswagen AG and Hyundai Motor Co., slashing tax revenue. The EU is increasing penalties on members that flout budget rules after Greece’s spiraling deficit undermined confidence in the euro.

The Czech Republic’s debt rose to 35.4 percent of GDP last year, from 30 percent in 2008, less than the 60 percent limit for joining the euro.

“The Czech Republic is acting as a stabilizing element in the region,” said Prague-based Raiffeisen Bank analyst Michal Brozka in a note to clients, referring to Hornung’s comments. The new government has 118 seats in the 200-member lower house of parliament, giving it the strongest majority since the country became an independent state in 1993. That creates “preconditions for removing the gridlock” that hampered efforts to overhaul government finances, Hornung said.

The Finance Ministry forecasts the economy will grow 1.6 percent this year and 2.3 percent in 2011, after a 4.1 percent contraction in 2009. The European Commission, the European Union’s executive arm, estimates the euro area’s economy will grow 0.9 percent this year and 1.5 percent in 2011.

Businessweek

European IT Research Gets €1.2 Billion From EU

The European Union is set to add €1.2 billion (US$1.5 billion) in funding for IT research in Europe, and about half the amount is earmarked for robotic systems, next generation network and service infrastructures, electronic and photonic components and digital content technologies.

Emphasis will be placed on technologies that address societal challenges such as climate change, energy and food security, health and an aging population, said Commissioner Máire Geoghegan-Quinn as she announced the new funding on Monday.

Link

A legbefolyásosabb tagállamok a 30 százalékos széndioxid-csökkentés mellett

Az Egyesült Királyság, Franciaország és Németország miniszterei együtt szólították fel az Európai Uniót, hogy emelje 30 százalékra a 2020-ra megállapított kibocsátás-csökkentési célt.

Az EU jelenlegi célszáma nem lesz elég a zöld innováció serkentésére és Európa versenyben tartására az ún. „tiszta” technológiák terén, nyilatkozta Chris Huhne, az Egyesült Királyság energiaügyi és klímaváltozásért felelős minisztere, Nobert Röttgen, a német környezetvédelmi miniszter és a francia környezetvédelmi miniszter, Jean-Louis Borloo a Financial Timesnak címzett levelükben.

Az Európai Unió 2008 végén fogadta el energia- és klímacsomagját, melyben azt vállalta, hogy 2020-ig 20 százalékkal csökkenti az üvegházhatást okozó gázok kibocsátását. Az EU három legbefolyásosabb tagállamának miniszterei első alkalommal fogtak össze, hogy az egyoldalú 30 százalékos cél mellett érveljenek.

„Ha a 20 százalékos célhoz ragaszkodunk, Európa valószínűleg elveszti a versenyt az alacsony széndioxid-kibocsátású [low-carbon] világban, olyan országokkal szemben, mint Kína, Japán, vagy éppen az Egyesült Államok, melyek mind vonzóbb környezetet próbálnak teremteni a low-carbon befektetések számára” – írták a miniszterek.

Ez az elmozdulás a német álláspont jelentős változását jelzi, Berlin korábban az EU hivatalos álláspontját támogatta, mely szerint a 30 százalékos kibocsátás-csökkentést csak akkor kellene megvalósítani, ha más iparosodott országok hasonló mértékű kötelezettségeket vállalnak az ENSZ tárgyalásokon az új klímaegyezmény tárgyalásai során.

A Bizottság májusban kiszámította, hogy a recesszió miatt a 30 százalékos csökkentés most csak 11 milliárd euróval kerülne többe, mint amire a tagállamok két évvel ezelőtt vállalkoztak, amikor a 20 százalékos célt megállapították. Connie Hedegaard klímavédelemért felelős európai biztos ugyanakkor úgy vélekedik, hogy a célszám emelésének most nem lenne értelme, mert szerinte a feltételek még nem megfelelőek ehhez.

Az európai üzleti körök vehemensen ellenzik a klímavállalások emelését, azzal érvelve, hogy ezzel versenyhátrányba kényszerítenék az uniós ipart. „Rossz jelzést küldene az európai ipar számára a gazdasági válság idején” – jelentette ki Jürgen R. Thumann, a Business Europe üzleti lobbi elnöke.

Euvonal

Romania to Raise Taxes

Romania said it would raise taxes to shore up state finances as it seeks to qualify for continued help from the International Monetary Fund and other lenders and reassure jittery markets focused on government spending and debt. Cabinet ministers approved the tax increase at an emergency meeting Saturday in order to plug a hole in the budget created Friday when the country's highest court declared that government-imposed pension cuts were unconstitutional.

Friday's court ruling, which called into question the government's ability to carry out its austerity plans, jolted markets and pushed the Romanian currency, stocks and bonds sharply lower. The currencies of neighboring Hungary and Poland also lost ground on fears those countries could have trouble curbing deficits. The cabinet's decision to boost the value-added tax to 24% from the current 19% will solve the immediate problem of holding the government budget deficit to the promised 6.8% of gross domestic product. But it is also likely to serve as a further break on economic expansion in a country where GDP fell more than 7% last year.

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EU greenlights Estonia eurozone entry in 2011

Leaders of the 27 European Union nations on Thursday gave their green light for Estonia to adopt the troubled euro currency as of January 1, 2011.

According to the latest EU estimates, Estonia will post a public deficit amounting to 2.4 percent of gross domestic product this year and debt of 9.6 percent of GDP -- levels which most of Europe can only dream of. However, the European Central Bank has warned Estonia that it could struggle to keep inflation under control once it joins the eurozone.

The country shifted rapidly from a communist command economy to the free market after breaking from the crumbling Soviet bloc in 1991 and its economy began to grow quickly, especially after joining the European Union in 2004. Hit by the global crisis in 2008, Estonia's government slashed public spending to confront the crisis and maintain its drive to switch from the national currency, the kroon, to the euro. The Estonian kroon was created in 1992 to replace the Soviet ruble. First pegged to the German mark, it was then linked to the euro in 2002 and its rate has not changed since

AFP

EU invites Iceland to membership talks

European Union leaders agreed Thursday to open membership negotiations with Iceland despite differences over whale hunting and a bank collapse that hit British and Dutch investors. European heads of state and government meeting in Brussels gave Iceland candidate status less than a year after it applied to join the 27-nation bloc.

Britain and the Netherlands said the talks should go hand in hand with negotiations over demands that Iceland reimburse compensation paid out by those two countries to citizens who held accounts at the failed Icesave bank. "My government is fully committed to resolving this issue," Johannesson said. "It's a bilateral issue."

Dutch Prime Minister Prime Minister Jan Peter Balkenende said that while his country wasn't blocking the start of Iceland's membership negotiations. "before it can become a member, it will have to fulfil its obligations toward Britain and the Netherlands."

The Icelandic authorities will also have to make extensive moves towards shutting down their controversial whaling industry before they can think of taking their seat in Brussels, as European rules ban whale hunting.

Iceland's application to join the European Union and adopt the euro as its currency, which it lodged in July 2009, could also stumble on the issue of access for European fleets to Icelandic fishing waters.

But potential problems are not only with its would-be partners. An opinion poll this week showed a substantial majority of Icelanders want their government to tear up the EU application form. A national referendum will have to be held before Iceland can join the EU club. In a March referendum Icelanders massively rejected a deal to pay Britain and the Netherlands billions for their losses in the collapse of the Icesave bank.

It was only after the global financial hurricane battered its banks, forced its currency down and pushed it to the International Monetary Fund cap in hand that Reykjavik decided to apply for EU membership.

However European capitals see Iceland as a natural fit for the EU, as long as the obvious hurdles can be overcome. "There are a lot of conditions to be fulfilled but in due course Iceland can become a member of the club," said EU president Herman Van Rompuy.

AFP

Tőkés Lászlót az EP alelnökévé választották

A néppárti frakció jelöltjét, Tőkés Lászlót az Európai Parlament egyik alelnökévé választották kedden (2010. június 15.).

Tőkés Lászlót 334 szavazattal, 287 tartózkodás mellett választották a tizennégy alelnök egyikévé, miután a korábbi magyar EP-alelnök, Schmitt Pál lemondott európai parlamenti mandátumáról és a Magyar Országgyűlés elnöke lett.

Az alelnök - csakúgy, mint az elnök - irányítja az Európai Parlament és szervei (az Elnökség, illetve az Elnökök Értekezlete) munkáját, valamint vezeti a plenáris ülésszakokon folytatott vitákat. Amennyiben az elnök nincs jelen, vagy akadályoztatva van hivatali kötelességei ellátásában, illetve ha részt kíván venni valamilyen parlamenti vitában, az egyik alelnök veszi át az elnöklést. Az elnök bármely megbízatást átruházhat az alelnökökre, például a Parlament képviseletét ünnepi alkalmakkor vagy eseményeken. (Az alelnökök feladatait az EP Eljárási Szabályzatának20. cikke rögzíti.)

Euvonal

Franco-German relations hit new low

The French president has surrendered to the German Chancellor's demands on EU economic governance and her idea of "red cards" for member states that break spending rules set in Brussels. Mr Sarkozy had been determined to create an "economic government" of the 16 eurozone countries with a powerful secretariat to coordinate national budgets, tax and spending.

...

President Sarkozy was then bludgeoned into accepting a German ultimatum that euro zone states that persistently breach budget deficit limits should have their voting rights suspended on economic issues, even if that requires changing the EU treaty. Previously, the issue of treaty change has been taboo for Mr Sarkozy who fears a French referendum. "If a treaty change is needed we will propose it," he conceded in Berlin.

Read more...

Centre-right coalition set to take over in Slovakia

Slovakia's governing Smer-Social Democracy have boosted their support by six percent in the weekend's general election to win 62 seats, far and away the most popular party. But current Prime Minister Robert Fico will most likely not return to power, as support for his two hard-right coalition partners slumped, and all four centre-right opposition parties have ruled out working with his centre-left group.

On Monday (14 June), Slovak President Ivan Gasparovic approached Mr Fico, asking him to form a government without a majority in the 150-seat chamber. However, despite the president's move, the opposition parties, with a total of 79 seats, have already launched coalition talks among themselves.

Smer won 36 percent of the vote, almost double the next closest party, the conservative Slovak Christian and Democratic Union (SDKU-DS) of sociology professor Iveta Radicova, the likely next prime minister, who won 15.4 percent, down some three percent from the last general election in 2006. The free-market liberals of Freedom and Solidarity (SaS) - who are strongly pro-business but also favour drugs liberalisation and same-sex marriage - came second on 12.1 percent, followed by the country's second Christian Democratic party, the Christian Democratic Movement (KDH) of former EU education commissioner Jan Figel on 8.5 percent, and Most-HID, an ethnic Hungarian grouping, on 8.1 percent.

The four parties should have little trouble working together, although there are frictions between the two Christian Democratic groups.

Mr Fico's main coalition partner, the extreme-right Slovak National Party, slid 11 seats down to nine on 5.07 percent - only barely above the five-percent threshold required to enter the Narodna rada, while the nationalists of former prime minister Vladimir Meciar, the Movement for a Democratic Slovakia (LS-HZDS), won no seats at all.

The priorities of what will likely be a highly fiscally conservative government will focus on slashing spending in what is already the poorest country in the euro area. The country's budget deficit was 6.8 percent in 2009, well above the three-percent limit for eurozone members.

Euobserver

Hungarian Leader Announces 29-Point Budgetary Plan

The prime minister of Hungary, Viktor Orban, introduced a mix of cost-cutting and tax measures Tuesday, including cuts in public-sector wages and new levies on banks, as part of its efforts to reassure jittery investors that the country could reach its budgetary targets.

“The time has come to replace the country’s old economic system with a new one,” Mr. Orban said, introducing the measures before Parliament, which was expected to approve them...

Link to the NYT

Germany moves to save $96 billion

Germany will cut welfare benefits, introduce new taxes and shed government jobs to save as much as euro80 billion ($96 billion) through 2014 and set an example for the rest of Europe, Chancellor Angela Merkel said Monday.

The wide-ranging savings package finalized by the Cabinet includes trims in social programs such a subsidy for new parents who stay home, more taxation for the nuclear power industry, and delaying the building of a replica of a Prussian palace in the heart of Berlin.

Merkel said as many as 15,000 federal government jobs could be shed through 2014.

In addition, the government wants to levy a special charge on passengers flying from German airports until aviation is included in an international carbon dioxide emissions trading scheme. Looking farther ahead, the Cabinet said it hopes to save money by reforming the military and will consider trimming the 250,000-strong force by up to 40,000.

The new nuclear tax is aimed at netting euro10 billion throughout 2014, but the bulk of the savings will come from the welfare budget — a total of euro30 billion.

AP

Képviselőcsere

Schmitt Pál fideszes EP-képviselő helyét Pelczné Gáll Ildikó veszi át az Európai Parlamentben; Balczó Zoltán jobbikos képviselőt pedig Kovács Béla váltja, miután Schmitt és Balczó hazatérnek a magyar törvényhozásba, mert az áprilisi választáson a magyar Országgyűlésben is mandátumot nyertek.
Euvonal

Hungary’s Orban Assumes Power

Viktor Orban returned to power as Hungary’s prime minister after eight years in opposition, pledging to accelerate economic growth in the first European Union member to obtain a bailout in the credit crisis.

Orban has yet to unveil details of his economic policy plans. He will have to balance pledges to cut taxes and boost growth after the worst recession in 18 years with investor concern that the new administration will loosen fiscal policy at a time when the euro area’s debt crisis prompts countries from Greece to England to cut spending to defend the euro.

“Fiscal risks in Hungary are particularly high and the government appears to be shifting its focus away from budget responsibility at a time when the euro zone is mired in a sovereign debt crisis,” Neil Shearing, a London-based emerging- market economist, said in a note to clients this week.

The Cabinet will place job creation and growth above budget discipline, Gyorgy Matolcsy, the new Economy and Finance Minister, said during a parliamentary committee hearing on May 25. Hungary can only “outgrow” its debt level, the highest among the EU’s eastern members at an estimated 79 percent of gross domestic product this year, he said, referring to lowering the ratio by accelerating growth.

Bloomberg

$30 Billion of Budget Cuts

Prime Minister Silvio Berlusconi said Italy’s planned 24.9 billion euros ($30.4 billion) of budget cuts over the next two years are “absolutely necessary” to defend the euro.

The measures are part of a European effort to convince investors the region can tame budget deficits and shore up the euro, which has fallen 15 percent this year. The package aims to reduce Italy’s budget gap an additional 1.6 percent of gross domestic product to bring the shortfall within the EU limit of 3 percent of GDP in 2012 from 5.3 percent last year.

Italy’s cuts include a three-year wage freeze for civil servants, a 10 percent budget cut for ministries, 4.5 billion euros in reduced transfers to regional governments, a partial amnesty on illegal construction and a crackdown on tax evasion.

Berlusconi said that while public spending that accounts for about half of GDP needed to be scaled back, the measures also aim to combat tax evasion and rein in the underground economy. Those steps include requiring the use of credit cards, checks or other traceable means for any transactions of more than 5,000 euros. Italy misses out on about 100 billion euros a year in unpaid taxes and that helps create Europe’s second-biggest underground economy after Greece, worth about 270 billion euros, or 22 percent of GDP, Berlusconi said. The plan also calls for a crackdown on false disability claims. Italy pays 16 billion euros a year in benefits to 2.7 million people claiming disabilities, Finance Minister Giulio Tremonti said.

http://www.businessweek.com/news/2010-05-26/berlusconi-says-30-billion-of-budget-cuts-needed-to-save-euro.html

Mentőcsomag az euró elleni spekulációs támadások elhárítására

Az uniós tagállamok pénzügyminiszterei hétfő hajnalban, Brüsszelben a közös fizetőeszköz, az euró védelmében több milliárdos mentőcsomagot szavaztak meg. Az 500 milliárd eurós csomagról szóló döntés a közös valuta elleni spekulációs támadások elhárítását célozza.

A csomag részben hitelről, részben hitelgaranciáról szól. Ebben az összegben nincs benne azonban az a hitelkeret, amelyre szükség esetén - vagyis ha fizetési gondjai támadnának az eurózóna valamelyik országának - a Nemzetközi Valutaalaptól (IMF) számítana az Európai Unió.

Az IMF-pénz további 220 milliárd eurót jelenthet, vagyis összesen 720 milliárdos lenne a teljes mentőcsomag értéke. A megbeszélésekről korábban kiszivárgott hírek arról szóltak, hogy a németek "csak" mintegy 100 milliárd eurónyi IMF-pénzkeretre számítanának.

Az 500 milliárd úgy tevődik össze, hogy 50 milliárdról 110 milliárdra - vagyis 60 milliárddal - növelik azt a hitelkeretet, amely eddig csupán az eurózónán kívüli uniós tagállamok megsegítésére szolgált az Európai Bizottság közreműködése révén, de ezentúl a közös pénzzel fizető országok is részesedhetnének belőle.

A további 440 milliárdot az euróövezet országai bilaterális támogatás formájában bocsátanák rendelkezésre. A mentőmechanizmus a tagországok reményei szerint megakadályozhatja, hogy a görög pénzügyi válság az euróövezet más országaira is átterjedjen.

A tanácskozás versenyt futott az idővel, hogy a megállapodást még a főbb ázsiai piacok nyitása előtt elérjék, és azoknak pozitív üzenetet küldjenek.

Euvonal

ECB suspends rating threshold for Greek debt

The European Central Bank on Monday said it would suspend the application of the minimum credit rating threshold in the collateral eligibility requirements for credit operations in the case of debt instruments issued or guaranteed by the Greek government. This suspension will stay in place "until further notice."

On Sunday, the Greek government approved an economic and financial adjustment program, under which it would receive 110 billion euros from the European Union and the International Monetary Fund.

The ECB said the program was "appropriate." "This positive assessment and the strong commitment of the Greek government to fully implement the program are the basis, also from a risk management perspective, for the suspension announced herewith," the central bank said.

The suspension applies to all outstanding and new marketable debt instruments issued or guaranteed by the Greek government.

Greece Gets Aid, Promises Austerity

Euro-zone countries and the International Monetary Fund, seeking to halt a widening European debt crisis that has threatened the stability of the euro, agreed to extend Greece an unprecedented €110 billion ($147 billion) rescue in return for Draconian budget cuts.

Under the three-year agreement announced here late Sunday, Greece would receive €80 billion in loans from other euro-zone members and €30 billion from the IMF. The planned rescue is the largest ever attempted by the IMF and a first for the 16-member euro zone. It still requires final approval from national governments.

The bailout removes the worry that Greece won't meet its immediate funding needs—€8.5 billion in borrowings due May 19. But it introduces fresh questions, among them whether the country can bear the harsh budget-cutting measures that are the price of the aid.

The prospect of a rescue has been controversial in Europe. Some euro-zone countries, led by Germany, worried that a bailout would set a dangerous precedent by encouraging other members to flout the bloc's deficit and debt rules. A rival faction, led by France, favored speedy intervention, viewing the crisis as a moment of truth, both for the 11-year-old common currency and the broader European Union. The divide delayed action, which some critics say worsened the crisis by allowing it to spread to other countries, raising concerns about the cohesion of the euro zone.

Even with the austerity measures, Greece now projects that its debt, which last year stood at 115% of its gross domestic product, will surpass 140% by 2014 before it begins declining. That is worse than was believed even a few weeks ago. The budget cuts will slash the deficit from 13.6% of GDP last year to 8.1% this year. Economic output will fall 4% this year, Greece says.

(...)

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