European Commission president José Manuel Barroso has rebuked EU leaders for not doing more to develop growth across the EU, following this morning's Tripartite Social Summit.
Barroso told reporters that he was unhappy with progress so far, and demanded a new sense of urgency. He also signalled to Berlin to allow austerity to be relaxed. Easier said than done.
The full statement is online, but, here's the key section:
Very frankly I am not happy with the progress made so far.That's why I call on the European Council to accelerate the adoption and implementation of many important growth-enhancing measures included in the Growth and Jobs Compact. It is true that we have been making more efforts in terms of fiscal consolidation than on the measures for growth that were already agreed at the European Council level. We need to balance the important efforts made in terms of sound public finances with the right measures to have growth enhancing policies. We also need to move ahead with our structural reform agenda – the country-specific recommendations have to be implemented at national level....Regarding the deadlines of bank supervision in relation to recapitalizing Spanish banks, people forget that there already exists a 100 billion euros credit line that can be used for those. The problem with this line of credit is that it goes through the Spanish state, so it increases the Spanish public debt (but Olli Rehn, in the previous link says this won't increase Spain's structural deficit.)
So, if I understand well, the use of banking supervision in regard to Spanish banks would be if 1) the opened credit line were not enough or 2) Spain's budget situation became very bad and it needed to avoid recapitilizing banks through state budget. I believe the compromise obtained is quite good: if there is no new crisis regarding Spain, there is time to put in place a deep/thorough banking supervision, with closing bank powers etc; if a new crisis emerges in Spain in Q1 2013, overcoming conditions 1 and 2 up there, then it will be possible to say (maybe), "we have put in place the legal framework, let's make something in a hurry for those".
It's a question of having some instrument ready, just in case, even if the goal is not to use the instrument.
So, if I understand well, the use of banking supervision in regard to Spanish banks would be if 1) the opened credit line were not enough or 2) Spain's budget situation became very bad and it needed to avoid recapitilizing banks through state budget. I believe the compromise obtained is quite good: if there is no new crisis regarding Spain, there is time to put in place a deep/thorough banking supervision, with closing bank powers etc; if a new crisis emerges in Spain in Q1 2013, overcoming conditions 1 and 2 up there, then it will be possible to say (maybe), "we have put in place the legal framework, let's make something in a hurry for those".
It's a question of having some instrument ready, just in case, even if the goal is not to use the instrument.
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The Eurogroup represents the 17 nations in the single currency zone and has sought to impose strict austerity measures on members with escalating debt.
Eurostat said although annual budget deficits had fallen, eurozone public debt rose to 87.3% of GDP in 2011 from 85.4%.
Ireland's public debt jumped to 106.4% from 92.2% in 2010 as the benefits of spending cuts were undermined by a fall in tax receipts and a prolonged recession.
Greece, where the crisis started, had the highest debt ratio in Europe last year, reaching 170.6% of GDP, or €355bn (£289bn). It reduced its annual deficit to 9.4% from 10.7% in 2010 and 15.6% in 2009.
Greece, where the crisis started, had the highest debt ratio in Europe last year, reaching 170.6% of GDP, or €355bn (£289bn). It reduced its annual deficit to 9.4% from 10.7% in 2010 and 15.6% in 2009.
The Greek prime minister, Antonis Samaras, said his government would receive €31.5bn in loans next month if the Athens parliament pushed through €13.5bn in spending cuts and tax increases, though it remained unclear that MPs would do so.
The finance minister, Yiannis Stournaras, warned MPs that "people would go hungry" should Greece failed to take receipt of its next rescue loans.
"The cost for the country will be boundless if we don't get the €31.5bn instalment," he said.
Stournaras asked if MPs thought the Europeans were bluffing over their demands for new cuts. "Time is running out," he said. "If we want to get the instalment before state funds at our disposal are exhausted we must move very quickly."
The eurozone appeared last night to be in a stronger position to survive the debt crisis after EU figures revealed member governments cut their annual budget deficits last year.
The EU statistics office, Eurostat, said the aggregate budget deficit in the 17 countries using the currency fell to 4.1% of GDP in 2011 from 6.2% in 2010 – the first year of the sovereign debt crisis.
Ireland cut its annual deficit from 31% of GDP to 13.4%, while Germany brought the deficit on its annual budget down to 0.8%, Eurostat said.
The figures were published before a flurry of meetings that culminated in the taoiseach, Enda Kenny, gaining a commitment from François Hollande of France and Angela Merkel of Germany that cheaper funds would be made available to prevent Dublin's bank rescue from bankrupting the country.
There never was a crisis.
There is a currency war going on, and trouble in the Euro zone is being talked up.
If anything the Euro is in far better shape than it ever has been, and the 'crisis' has served only to cause Euro countries to close ranks.
I think Cameron's veto will come to be seen as one of Britain's greatest blunders..
These bond attacks on the euro will cause the EZ to form new political and financial institutions, and the EU as it is now will become increasingly irrelevant.
Europe's most powerful political team is unable to find a common denominator, from the question of who should be picking up prizes or, more tellingly, to the much broader issue of rescuing the euro. At the Brussels summit last week, Merkel and Hollande, after arguing for hours, agreed on a slim formulaic compromise on the banking union, while all other contentious issues remained unresolved.
Since the days of former German Chancellor Konrad Adenauer and former French President Charles de Gaulle, Germany and France have generally been run by politicians who placed more value on unity than their differences. The axis between former German Chancellor Helmut Schmidt and former French President Valéry d'Estaing axis proved to be just as resilient as the partnership between their successors, Helmut Kohl and Francois Mitterand.
Usually the Troika is held responsible for all things evil in Europe, but as Die Welt notes, the latest demand that all senior officials at the Ministry of Finance (including all current Greek tax inspectors) be fired by Friday (over corruption and incompetence concerns) has been greeted more positively by many. "The Troika is the only hope to purge this country of the gangs that plunder it - the ONLY hope!" is how one Skai TV commentator summed up the move, adding that "it would be nice if we could read one day that all presiding judges are dismissed." The plan to "collect record amounts of money in record time" involves the interviewing of 2235 new tax investigators (with no written exam!) who will be judged on how much money they bring in (with minimum quotas) and maximum tenure of one year before re-applying. The new plan is likened to 'medieval tax collectors' and the tax-collectors union, unsurprisingly upset at this new plan, added that the Troika never had to face "a destitute pensioner who cannot pay his tax bill." With rumors of government resignation and re-election, the external pressure and internal strife are coming to a head rapidly.
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