This EU budget stuff can come across as pretty
dull and confusing. To lighten things up a bit, we will turn to the universal
language of football. So meet the EU budget 'Veto Team' - the eleven EU
leaders that so far have threatened to veto the EU budget unless they get a
better deal. Needless to say, given that this is its first outing, the
eleven-man team is far from a cohesive unit - with lots of big egos
and players who play for themselves.
· David Cameron leads the line, ready to strike
and seen as the most likely to pull the trigger on any veto.
· Swedish Prime Minister Fredrik Reinfeldt at
right winger hugging the line (sticking to his guns), happy to put in a shift
for the team and more likely to offer an assist/support for Cameron than to deliver
the final blow himself.
· French President François Hollande is the
mercurial trickster playing between the lines but not quite sure of his role or
his aims. Ultimately a selfish player (as are many of the others) but who’s own
personal gain could ultimately be detrimental to the rest of the team.
· Italian Prime Minister Mario Monti is playing the
stoic holding role, refusing to budge and occasionally gesticulating wildly at
the referee, although never actually getting into the danger zone at the
forefront of the action. More likely to break up play and provide a stumbling
block than deliver a knockout blow to the opposition. Unlike the rest of the
team, not here on merit (elected) but parachuted in by the powers above.
· Portuguese Prime Minister Pedro Passos Coelho
takes on the Cristiano Ronaldo role as a marauding left winger and not just
because of the nationality. His red line that Herman Van Rompuy's proposal is
unacceptable makes him more of a threat than many expected. Under pressure to
perform from his home fans (electorate) he needs to put in a big showing – the
question remains though whether he will rise to the challenge or crumble under
the pressure.
· Dutch Prime Minister Mark Rutte is playing the
'box-to-box midfielder' role, akin to the days of Johan Cruyff's 'total
football'. Usually more inclined to side with Germany (the opposition), Rutte
finds himself dragged end-to-end with action not quite sure where he should be
or where he is best suited. One things for sure, his hometown team (the VVD
party) would love to see him score.
· Belgian Prime Minister Elio Di Rupo, naturally
inclined to the left, find himself at left back. His demands are relatively
minor and he’s not a regular in this team (usually part of the core EU group
who’s views align closely). He’ll put up a fight for a bit but he’s not a star
player in this game.
· The towering centre-back, Danish Prime Minister
Helle Thorning-Schmidt provides a solid spine to the team. Not one of the more
flashy players but they know their job and what they want out of it (a clean
sheet). Unlikely to score (pull the veto) but will definitely provide a blocker
against any increases in the budget.
· Austrian Chancellor Werner Faymann is another
unfamiliar member of the team. Stuck in at centre back because of its
experience in the eurozone crisis and playing a key blocking role in minimising
the liabilities. Unfortunately, its aims are different in this game and as with
Hollande its may end up scoring an own goal (getting more spending in the
budget).
· Romanian President Traian Basescu, at right
back, is there as a late replacement and now a token entry. The previous
incumbent (Romanian Prime Minister Victor Ponta) looked set for an interesting
game, but after the substitution this role is unlikely to provide much action.
· Latvian Prime Minister Valdis Dombrovskis is in
goal because, well, the smallest kid always gets stuck with the worst job.
5 comments:
Schäuble: no haircut for Greece
The German finance minister, Wolfgang Schäuble, is at it again, by which we mean declaring his opposition to a writedown of public holdings of Greek debt. He said today:
The moment we decide to give Greece a haircut, we cannot give Greece any new guarantees - that is logical because the budget law rightly says you can only take on guarantees if you believe that the debt will be paid back so you can't do both.
He said as much last week, and at the end of October, so top marks for consistency - both to Schäuble and the hacks who keep asking him the same question.
What's the summit all about?
A: This special summit of the 27 leaders of EU member states has been called to set the ceiling for European Union spending over the seven-year period 2014-20 - known in euro-speak as the Multiyear Financial Framework or MFF.
As well as a global figure for spending, the leaders also aim to agree a framework for contributions by member states to fund the EU's activities and around 70 spending programmes for different policy areas - such as growth, agriculture or security - which will shape the EU's priorities up to the end of the decade.
Q: So can we expect to know by the end of it exactly the size of the EU's budget for the rest of the decade?
A: It's not as simple as that. The Council is supposed to set a "commitment ceiling", which represents the maximum which the EU can promise to spend over the seven years, as well as a "payments ceiling", which is the maximum it can actually spend over that period and is generally rather lower.
But the actual budget is set annually, in a separate set of negotiations.
Historically, the budget has always been well below either of the ceiling figures. But we won't know its size until 2020 - and maybe not even then.
Negotiations are still going on in Brussels not only about the budget for 2013, but also the budget for 2012.
in 2011 prices.
Q: So is Mr Cameron happy with the Van Rompuy proposals?
A: Not entirely. Britain regards the President's plan as a step in the right direction, but is wary about what spending levels would actually result. The van Rompuy proposals also involve a reform of the "Own Resources" system, including Britain's rebate, which will provoke stiff resistance from London.
Q: What about the rebate?
A: Britain believes its rebate, negotiated by Margaret Thatcher in the 1980s and currently worth about €3.6bn a year, remains fully justified. Essentially, the rebate compensates Britain for the fact that, although it is one of Europe's biggest economies, it receives relatively little in support for its farmers through the Common Agricultural Policy (CAP). Without it, the UK's net contribution to Brussels in 2010 would have been €10.9bn - almost as much as Germany. Even with the the rebate, Britain's net contribution is considerably higher than those of France or Italy.
1. The surreal air of calm surrounding Spain's bond market shows no signs of dissipating. Quite the opposite. The Treasury has met its financing needs for this year and is already pre-funding its 2013 requirements. The fairly modest size of today's auction, and the enduring signalling effect of the ECB's bond-buying programme, made for a relatively successful sale - and one of longer-term paper at that. Demand held up and yields for the 3 and 5-year notes were just a tad below secondary market levels. For the time being, Spain is accessing the market with relative ease.
2. Right now, the million dollar question is: how long will the ECB's signalling effect alone suffice to suppress Spanish yields? It's tempting to take the view that the market is becoming less sensitive to a Spanish request for an ECB-backed bond-buying programme. Madrid would like to think this is the case but it's very unlikely, given the scale and severity of Spain's financial and economic plight, that investors no longer believe Spain requires external aid. The reality is that the current standoff over a sovereign bailout for Spain suits all three sides - Madrid, investors and the ECB - to varying degrees.
3. This is the longest period of relative calm enjoyed by Spanish and Italian debt markets since the eurozone crisis escalated dramatically in November 2011. Indeed, the yield on 10-year Spanish paper now stands at the top end of the band in which it was trading early last year when Spain was said to have "decoupled" from its more distressed eurozone peers. But while the ECB is holding the fort, eurozone leaders keep dragging their feet in putting in place the political, regulatory and institutional measures needed to shore up the ill-managed single currency area.
Italy's prime minister Mario Monti has spoken out against the EU budget.
He said Italy is disproportionately penalised in the EU budget and said Italy will reuse unacceptable outcomes on the EU budget.
That feeling of a deal not being reached at this summit is growing.
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