Croatia Says 'Yes' to EU Membership

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

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

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

ABC news

Martin Schulz lett az EP elnöke

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

Három kötelezettségszegési eljárást indít Magyarországgal szemben az Európai Bizottság

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

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

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

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

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

Euvonal

9 eurozone nations downgraded by S&P

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

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

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

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

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

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

CNN

Markets punish Hungary for power grab on central bank

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

Banks queue up for cheap ECB loans

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

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

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

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

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

Euobserver

Europe's great divorce

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

Surprise victors in Slovenia poll

A centre-left party led by a prominent businessman and mayor has nabbed a surprise victory in Slovenian parliamentary elections, reflecting mounting concern among voters over the economy in the small EU country. Positive Slovenia, the party led by the former head of the country's largest retailer and mayor of the capital, Ljubljana, took 28.5% of the vote, according to nearly complete results.

The favoured conservatives were trailing with 26.3%. The leader of the Slovene Democratic Party, former prime minister Janez Jansa, conceded defeat and congratulated Zoran Jankovic for his party's win.
Positive Slovenia did not win enough votes outright to form a government on its own, setting up a scramble for coalition partners. In winning Slovenia's first snap election since becoming independent from the former Yugoslavia in 1991, Positive Slovenia will have to tackle the country's mounting debt, unemployment and a looming recession.
Mr Jankovic has promised swift reform, including austerity measures: "The results show that Slovenia will go in the right direction. It is obvious that the citizens want an efficient state." Serbia-born Mr Jankovic won prominence in Slovenia first as the head of the country's biggest retailer, Merkator, running the company successfully for eight years, before he was removed from the post in 2005 by Mr Jansa over disagreements that Mr Jankovic claimed were politically motivated.The 58-year-old economist has served as the mayor of Ljubljana since 2006.
The snap vote was called after the centre-left government of premier Borut Pahor was toppled over economic troubles and allegations of corruption. The state electoral commission said the turnout was around 65%. Mr Pahor has said that he has done his best as premier to battle the global economic downturn and the European debt crisis. Mr Pahor's Social Democrats were third with 10.5% of the vote, results showed. Mr Pahor said this was more than he had expected. He offered to meet Mr Jankovic to discuss possible future cooperation.

Press Associated

A korrupció lett a horvát kormány veszte

Nem sikerült hatalmon maradnia Horvátországban Jadranka Kosor kormányának. A négy pártot tömörítő ellenzéki győztes Kukurikú-koalíció nagyjából harminc mandátummal többet szerzett, mint a bukott kormánypárt. A balközép-liberális szövetség ilyen arányú győzelemmel egymaga tud kormányozni, de egyben egyedül kell választ adnia rengeteg politikai, szociális és gazdasági kérdésre.
„A legfontosabb dolog, hogy nem sikerült megalázniuk minket” – idézte a Reuters a távozó kormányfő szavait, amivel elismerte vereségét. A Jadranka Kosor mögött álló Horvát Demokratikus Közösség (HDZ) az előzetes eredmények alapján 47 parlamenti helyet szerzett szemben a Kukurikú-koalíció 76-78 helyével.
A vasárnap lezajlott választás klasszikus értelemben vett protestszavazás volt. A Guardian írása szerint a szavazók a gazdaság pocsék állapota, a magas munkanélküliség és elsősorban a hihetetlen mértékű korrupció miatt büntették a HDZ-t, akinek saját volt és jelenlegi politikusai is belekeveredtek jó néhány vizsgálatba.
A megörökölt problémák miatt a Kukurikú-koalíció valóban nincs könnyű helyzetben, de evvel ők is tisztában vannak. „Nem fogunk cserbenhagyni titeket ígérem. Lehet, hogy hibázni fogunk, de nem állhatunk egyhelyben. Nem lesznek kifogások” – nyilatkozta Zoran Milanović a kormányfői szék várományosa miután biztos lett választási győzelme.
Horvátország államadósság besorolása a Standard & Poor's elemzése szerint csak a BBB-kategóriát éri el, ami csupán egy szinttel van a bóvli szint fölött. A gazdaság a harmadik negyedévben a GDP-nek csak 0,6 százalékával növekedett, az előrejelzés pedig jövőre még kisebb, 0,5 százalékos GDP bővüléssel számol, a munkanélküliségi ráta pedig már így is 17,4 százalékos a Bloomberg szerint.
„A piacokat egy ideig fellelkesíti majd a koalíciós győzelem és a kellően nagy parlamenti többség” – nyilatkozta Tim Ash a londoni RBS elemzője. Ash szerint Milanovićnak arra kellene használnia az így nyert időt, hogy megegyezzen az IMF-fel valamilyen finanszírozási keretről. Ettől egyébként Jadranka Kosor korábban elzárkózott, de Milanović most érdeklődőnek mutatkozik.
Az esetleges IMF beavatkozást az ország egy éves GDP-jét elérő államadósság, illetve a 6,2 százalékos államháztartási hiány is indokolná. Ezekkel a mutatókkal pedig csak akkor lehet majd elkerülni a hitelintézetek leminősítését, ha szigorú, megszorításokat is tartalmazó, költségvetést fogadnak el márciusra.

www.index.hu

Maratonra nincs idő

Nicolas Sarkozy francia elnök csütörtöki és Angela Merkel német kancellár tegnapi beszédéből kiolvasható volt, hogy noha mindketten látják, az Európai Unió szerződéseit meg kell reformálni, abban még nem egyeztek meg, miként történjék. Amire talán sor kerül hétfőn, amikor találkoznak Párizsban.
felől, hogy euróapokalipszisről lehet szó, egyikük sem hagyott kételyt beszédében. A francia elnök a délkelet-franciaországi Toulon városában leszögezte, Európát a jelenlegi euróválság „elsöpörheti”, ha nem hajlandó a változásra. És ezt a változást heteken belül meg kell tennie. A német kancellár ugyanakkor Berlinben az euróövezeti tagországok integrációjának maratoni hosszúságú, évekig tartó folyamatáról beszélt, aminek hallatán nyilván sokak fejében megfordult a gondolat, vajon van-e még idő egy ilyen hosszú futásra, amikor a szakadék egy sprintnyi távolságra került. A francia elnök a kontinens elé vetítette totális hanyatlásának sorsát, amikor azt mondta: „Ha Európa nem változik elég gyorsan, akkor a globális történelmet Európa nélkül írják.” Majd hozzátette, Európának nagyobb szolidaritásra van szüksége, és ez több fegyelmezettséget jelent.
(...)
www.mno.hu

Crisis election changes political landscape in Spain

The Spanish conservative People's Party (PP) regained power and fringe groups did well in elections on Sunday (20 November). The PP as predicted won an absolute majority of 186 places in the 350-seat lower house - the best result in the history of the party.
The centre-left PSOE, in power since 2004, received just 110 seats - the worst result in the history of its party. Meanwhile, smaller parties doubled their collective seats to 54.
Euobserver

Agreement on EU budget 2012

The Council and the European Parliament reached an agreement on the budget for 2012 at their meeting in the Conciliation Committee on 18 November. The agreement limits the increase of payments to 1.86% compared to the 2011 budget. The two institutions agreed to curb the total amount of payments for the 2012 budget to 129.088 billion euros. This corresponds to 0.98% of the EU's Gross National Income (GNI) and represents an increase of 1.86% compared to the updated EU budget 2011.
The agreed payments increase remains below the latest Commission inflation forecast of 2% for the EU in 2012, in real terms corresponding to a reduction of the EU budget. The EU thus rallies to the important efforts made by member states to consolidate their national public finances.
To cope with unforeseen situations, the agreement secures an important margin (12.4 billion euros) below the payments ceiling of the multiannual financial framework (MFF). The MFF fixes maximum amounts for each broad category of budget expenditure for several years, currently 2007-2013. At the same time, the budget allows targeted expenditure to support measures in favour of growth and employment in order to prevent the EU from slipping further into crisis.
European Council

Berlusconi Expected to Resign as Debt Plan Passes

Marking the end of a tumultuous week and of an era in Italian politics, Prime Minister Silvio Berlusconi was expected to resign on Saturday evening after Parliament approved austerity measures sought by the European Union.
The lower house passed the measures on Saturday by a vote of 380 to 26, a day after they were approved by the Senate, trying to keep a step ahead of market pressures that sent borrowing rates on Italian bonds skyrocketing last week to levels that have required other euro zone countries to seek bailouts.
The end of Mr. Berlusconi’s 17-year hold on Italian politics sets off the country’s most significant political transition in 20 years.
President Giorgio Napolitano, who as head of state will oversee the transition, was expected to begin consultations with party leaders to nominate a prime minishttp://www.blogger.com/img/blank.gifter immediately after Mr. Berlusconi’s resignation.On Saturday, the president appealed to lawmakers to put the country’s interests above their own. “All political forces must act with a sense of responsibility,” Mr. Napolitano said.
The front-runner to guide a new government appears to be Mario Monti, 68, a former European commissioner and a well-respected economist with close ties to European Union officials. On Wednesday, Mr. Napolitano named Mr. Monti a senator for life, an unexpected move seen as a prelude to receiving the mandate to form a government.
The mandate of the next government will be to push through measures to help reduce Italy’s $2.6 trillion public debt and increase growth to keep the country competitive. The austerity measures approved by Parliament include selling state assets and increasing the retirement age to 67 from 65 by 2026. They would decrease the power of professional guilds, privatize municipal services and offer tax breaks to companies that hire young workers.
Link

Papademos sworn in

Technocrat Prime Minister Lucas Papademos took office on Friday to save Greece from bankruptcy, heading a coalition cabinet filled with many of the same politicians who led the nation into crisis and pushed the euro zone to the brink of collapse.
As politicians in Italy pushed through austerity measures and contemplated an emergency government to stave off the crisis creeping deeper into the euro zone, Papademos said his priority would be to meet the terms of the country's EU, IMF bailout and pull Greece out of recession. "The final result will depend much on whether we succeed in stabilising the real economy, reining in unemployment and setting the ground to revive the economy and gradually boost employment in a relatively short time," he told his governing team in its first meeting. "That's why I would like to ask everyone to do his best in the next coming days, weeks and months."
More...

EU needs smaller, deeper group-Germany's Fischer

European Union with 27 members is incapable of agreeing needed reforms and the time has come to think about forming a smaller group of nations to advance the cause before it is too late, former German Foreign Minister Joschka Fischer said.
"Let's just forget about the EU with 27 members -- unfortunately," Fischer said in an interview with the German weekly newspaper Die Zeit. "I just don't see how these 27 states will ever come up with any meaningful reforms."
Fischer, a strong pro-Europe voice in Germany as foreign minister from 1998 to 2005, said the EU was under threat at the moment because of the euro zone debt crisis and he criticised the German government for poor leadership."We've got the worst German government since 1949," he said, but added Germany was strong enough to cope with that.
"We've got to watch out that we don't lose Europe," he said. "At the moment there is a great risk of that happening. The continent will survive without the euro but it would then nevertheless be dead as a political and cultural project."
Fischer said an "avant-garde" of the 17 euro zone nations could effectively take away the power from the 27 states. He said the smaller group should form a tighter group, following the lead of the Schengen passport-free travel zone in the EU. "What we need now is a 10-point plan for Europe, for a political union," Fischer said, adding Europe was heading towards a "transfer union" in the future in which wealthier nations would provide assistance to the less prosperous. "Anyone who denies that is just lying to themselves," Fischer said. Germans are nevertheless overwhelmingly opposed to any system where wealthier countries are obligated to support the poorer states.
Fischer said a euro chamber was worth considering, a body in which leaders from the national parliaments would take part. They would thus hold dual national and European responsibilities, Fischer said. "So those who have a say in their parliaments back home can also have a say in Europe," Fischer said.
Reuters

National unity government in Greece

Greece’s two mainstream political parties have agreed on a narrow pact for a national unity government after intense pressure from the EU, which warned that the country would be left to go bankrupt, perhaps within days, if a cross-party consensus was not achieved.

The centre-left prime minister, George Papandreou, loathed by millions of his fellow citizens for the imposition of far-reaching spending cuts, is to step aside once the new administration is in place, although who is to replace him has yet to be decided.

The coalition is tasked with approving a €130 billion EU-IMF bail-out deal, the second the country has been saddled with in the past two years, a package that will ensure that it is able to avoid bankruptcy and pay its largely central European creditors in return for years of austerity measures and international supervision of its finances.

The new administration will comprise the governing social democrats of Pasok and the right-wing New Democracy party. Papandreou had earlier approached Laos, a far-right religious party in the parliament and the Democratic Alliance, a small free-market liberal breakaway from the conservatives, to shore up his 152-seat majority in the 300-member house.

On Sunday, EU economy chief Olli Rehn had made it clear that without a coalition government, Greece would be cast adrift. He gave the country’s political elite hours to come up with a deal, ahead of a meeting of EU finance ministers on Monday evening.

Talks on a national unity government came after a long drama played out in the Greek parliament on friday. Papandreu survived a confidence vote on his government after a contentious move to hold a referendum on the Greek rescue deal put together in Brussels last week.

Europe delivered a stark ultimatum to Greece on Wednesday night, demanding that the country’s planned referendum ask plainly whether the country’s citizens wish to stay in the euro or to get out. "The question is whether Greece remains in the eurozone, that is what we want. But it is up to the Greek people to answer that question," Sarkozy said, adding that Greece would not receive "a single cent" if it does not adhere to the bail-out plan agreed last week.

Following the European reactions Papandreou has backed away from holding a referendum on a €130 EU bail-out deal and has agreed to talks with the conservative opposition over the construction of a transitional government leading to early elections.

Source: Euobserver

La BCE a abaissé ses taux

La Banque centrale européenne a réduit le taux de refinancement de 0,25 point à 1,25%. Économistes et marchés espéraient un geste de la part de la BCE en faveur des pays en difficulté de la zone euro, mais pas forcément sur les taux dès ce mois-ci. Mario Draghi a cependant rappelé les conditions du programme de rachat d'obligations d'Etats, à savoir "temporaire, limité quant au montant et justifié par le rétablissement du fonctionnement de la transmission de la politique monétaire par ses canaux ordinaires", mettant fin ainsi aux spéculations sur un renforcement de ce programme.
A la surprise générale, la Banque centrale européenne (BCE) a abaissé jeudi son principal taux directeur à 1,25%, a annoncé l'une de ses porte-parole, contre 1,5% précédemment. La BCE a également abaissé de 25 points de base ses deux autres taux directeurs, à savoir le taux de dépôt au jour le jour, qui est désormais de 0,5% contre 0,75% précédemment, ainsi que son taux de prêt marginal, passé à 2% contre 2,25% auparavant.
Economistes et marchés espéraient un geste de la part de la BCE en faveur des pays en difficulté de la zone euro, mais pas forcément sur les taux dès ce mois-ci.
L'echo

Euro Summit 27.10.2011

EU leaders agree on measures to provide more support for countries with debt problems and restore financial stability to Europe.

The decisions made on 26 October are in response to the debt crises affecting some eurozone countries. These crises threaten to undermine economic stability in the whole currency area, and by extension other EU countries. ‘The package we have agreed is a comprehensive package that confirms that Europe will do what it takes to safeguard financial stability,’ said Commission president José Manuel Barroso.
1) More loans for Greece
A sustainable solution to help Greece recover includes a new loan of up to €100bn from the EU and the IMF. Banks and other private creditors have agreed to write off 50% of Greek debt. The package aims to help Greece reduce its public debt to 120% of gross domestic product by 2020.
2) Better crisis support
Leaders agreed to enlarge the EU’s main debt support fund, the European Financial Stability Facility (EFSF), without extending member countries' commitments. The fund’s lending capacity will be boosted to about one trillion euros – a fivefold increase – using private market tools.
3) Bank reforms
Governments will provide guarantees for banks affected by the sovereign debt crisis. These guarantees will be coordinated at EU level. They will allow banks to continue to provide the loans needed for growth and job creation. A temporary measure will require banks to increase their capital base to 9% by June 2012. Banks should reduce dividends paid to investors and bonuses to staff until they reach the 9% target. This recapitalisation will strengthen the banking system. Banks will first use private sources of capital, with national governments providing support if necessary. Loans can also be made through the EFSF, as a last resort.
4) Stronger economic governance
Eurozone countries also approved measures to improve economic governance. There will be more coordination of economic and national budget policies, along with increased monitoring to ensure the measures are implemented. The eurozone will seek closer economic integration. A report on implementing the agreed measures will be completed by March 2012.
Commission website

EU states to speed up austerity, embrace 'limited' treaty change

Leaders of the EU's 27 member states met on Sunday (23 October) with little fresh to show in the face of the biggest crisis in the bloc's history, but did back a "limited" change to the EU treaty to deliver stronger economic convergence amongst eurozone countries.
At the crisis meeting in the EU capital, the bloc's premiers and presidents agreed to speed up already-agreed-to austerity and structural adjustment measures and to seek new "growth-enhancing" measures, such as unifying the bloc's still-fragmented market in digital products and services and cutting regulations on small businesses.

But on the core issues of what leaders have described as a "comprehensive" package aiming to draw a line under the eurozone debt crisis - including how to leverage the bloc's rescue fund to a size that can protect Italy and Spain from contagion, and the scale of the write-down to be imposed on holders of Greek bonds - there was no agreement.
The president of the EU Council, Herman Van Rompuy, told reporters in a pause between the closing of a meeting of the full EU 27 chiefs and a smaller meeting of the eurozone's 17 leaders, that "good progress" was made, with the bulk of the discussion so far focussed on the issue of a recapitalisation of Europe’s banks.
It is understood that leaders have converged on a sum of €107 or €108 billion in a scheme for a second round of bank bail-outs. Under the plans, troubled financial institutions must first attempt to raise fresh cash from markets. If unable to do so, national governments will then have to provide back-stops. Only if governments are too weak to be able to perform this task will the eurozone's rescue fund, the European Financial Stability Facility (EFSF), step into the breach. However, no final agreement has been reached on bank recapitalisation, and details will only be released after a meeting of European finance ministers and a second pair of EU and eurozone summits - all of which will take place on Wednesday.

The leaders did back a "limited treaty change" that will involve tightening fiscal discipline and deepening economic union. "'Limited' means not a general overhaul of the architecture found in the Lisbon Treaty,” said Van Rompuy. "What is most important is not to change the treaty but to strengthen economic convergence," he said, adding however that such a change is "not a taboo." The leaders said in a joint communique "that any treaty change must be decided by the 27 member states" and not just the 17 in the eurozone. The leaders will take a decision on treaty change in December based on recommendations from President Van Rompuy and the chair of the eurogroup of states, Luxembourgish Prime Minister Jean-Claude Juncker.

A new fiscal discipline 'super-commissioner' in the euro area is also to be created. The leaders "welcomed" the idea of strengthening the powers of a commissioner with added competence of "closer monitoring and additional enforcement." This chimes with a proposal from the Netherlands in September that a commission could upon the support of a majority of eurozone countries make a heavily indebted state a "ward" of the EU executive, whereby all economic decisions would be taken out of the hands of the country concerned and vested instead in the super-commissioner. Finland, Germany and the commission have backed versions of the plan.

A completely new post is also to be created, that of "president of the Euro summit", which will be elected by euro-area premiers and president at the same time that the president of the European Council is appointed. The next such appointment is to take place mid-2012. Until then, the current president, Herman Van Rompuy, will play this role.

The summit chiefs are also exploring the possibility of a massive new fund alongside the zone's existing rescue mechanism, hoping to tap trillions from sovereign wealth funds owned by the likes of Norway, Singapore and China that could be used to purchase government debt from in troubled states.

The existing rescue outfit, the EFSF, would offer insurance up to around 20 percent against losses government bonds purchased by the new fund, or 'Special Purpose Vehicle', extending the firepower of the EFSF to as much as €1 trillion. Such a plan, involving investment via the International Monetary Fund with 'Brics' involvement - referring to the emerging powers of Brazil, Russia, India, China and South Africa - is "on the table", an EU official told this website.

Pressure piled on Italy

Immediately after the meeting of all 27 member states, the 17 countries in the euro area met to continue discussions. Following the eurozone meeting at a late night press conference, no fresh breakthroughs were announced. The two EU presidents told reporters simply that talks were advancing.

However, while Italy was not mentioned by name, in a pointed reference to the country, Van Rompuy said: “All member states need to give clear signals of their commitment" regarding public finances by Wednesday, “and this is understood by everybody.”

German Chancellor Angela Merkel and French President Nicolas Sarkozy held a brief but sharp private meeting with the Italian Prime Minister early on Sunday, demanding that he take tougher austerity measures than he so far has implemented.

In return for Italy receiving assistance from the European Central Bank late in the summer via vast purchases of government debt in order to temper the country’s borrowing costs, Rome committed to a series of stringent austerity measures. But divisions in his government have slowed down the pace of their implementation. Last week, Berlusconi was forced to hold a vote of confidence to prove that he still commanded sufficient support in parliament to push through cuts and structural adjustment.

Euobserver

Slovak parties reach deal on EU bail-out fund

The Slovak parliament is set to approve legislation backing a strengthening of the eurozone’s €440 billion rescue fund after the centre-left opposition said it would back a fresh version of the bill in return for early elections. (...)
“The agreement makes it possible that either tomorrow night or at the latest Friday morning the fund and the laws tied to it will be approved,” he (Robert Fico) said. “Slovakia will ratify the bail-out mechanism without any problems.”
In return for Smer’s support, the three centre-right coaliion parties that backed the EFSF changes - the Slovak Democratic and Christian Union (SDKÚ), the Christian Democratic Movement (KDH) and Most-Híd - had to agree to elections that will take place on 10 March.
The cabinet is set to propose a constitutional law to bring forward the election schedule, a bill that is to be passed via a fast-track procedure, according to local reports. Once the election bill has been approved, Smer, which had abstained in the first vote on the EFSF changes on Tuesday evening, will now give its blessing to the alteration of the bail-out fund.

(...)

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