10 April 2015

Finnish Finance Ministry steps up contingency plans for a Grexit

Finnish daily Helsingin Sanomat reports that, according to a secret memo from the Finnish Finance Ministry, Greece may leave the Eurozone and the Finnish government has been preparing for such an event. The memo notes that if Greece decided to stop meeting its obligations, “tacit approval” of this by the Eurozone could trigger a chain of events which “results in Greece being expelled from the euro”. Capital.gr reports that plans are in the works for an extra meeting of Eurozone finance ministers on 29 April if a deal cannot be found at the scheduled meeting on the 24 April.

Meanwhile, Kathimerini reports that Eurozone officials have given Greece six working days to finalise a reform package to be presented at the finance ministers meeting. In an interview with Bloomberg TV Greek Finance Minister Yanis Varoufakis said, “We are prepared to make all sorts of compromises, we are not prepared to be compromised.” He added that Greece needed a “rationalisation” of its debt but that it is not seeking a “haircut,” suggesting that repayments be linked to nominal GDP growth.

Athens successfully paid the IMF €450m yesterday despite a serious shortage of cash. The ECB also agreed to raise the limit of Emergency Liquidity Assistance (ELA) given to Greek banks by €1.2bn to €73.2bn – slightly higher than the €800-900m expected.

Source: Helsingin Sanomat Kathimerini The Financial Times City AM Süddeutsche Zeitung Süddeutsche Zeitung

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Swiss will need to vote again, says EU official in charge of free movement negotiations

The EU official in charge of negotiations with Switzerland over the free movement of people, following Swiss voters’ backing for quotas on EU migrants, has said that the Swiss should “change logic” and be prepared to vote again on the issue. In an interview with Swiss newspaper La Liberte, EU official Maciej Popowski said that a new referendum is “inevitable, probably at the end of 2016.” He added, “Rather than thinking about what they could still get, it might be useful that the Swiss see the enormous advantages they have by participating in the internal market, which they take for granted.”

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Ukraine sets sights on joining NATO

Oleksander Turchynov, Head of Ukraine’s National Security Council has told the body that he sees Russian aggression as a “long-standing factor” and that achieving NATO membership is “the only reliable external guarantee” of Ukrainian sovereignty and territorial integrity. Separately, The Financial Times reports that Ukraine’s parliament has approved a lawintended to break monopolies and attract investment into Ukraine’s natural gas sector.

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Nordic states pledge military cooperation to tackle Russia threat - but EU divided on sanctions

In a joint declaration published in Norway’s Aftenposten, the defence ministers of Sweden, Norway, Finland, Denmark and Iceland pledge closer military cooperation to tackle threats posed by Russia. They write, “Russia’s actions are the biggest challenge to the European security. Russia’s propaganda and political manoeuvering are contributing to sowing discord between nations, and inside organisations like NATO and the EU.”

Separately, The Wall Street Journal quotes Greek Prime Minister Alexis Tsipras as saying, “We used the small force we have to help avoid further [EU] sectoral sanctions” against Russia. The Spanish Foreign Minister, Jose Manuel Garcia-Margallo, criticised Greece for its position, however, saying, “I can’t share the opinion of the Greek Prime Minister…The key condition to lift the sanctions is that Russia respects international law. Respecting international law means respecting the Minsk [ceasefire] accords, stopping intervention to help the separatists in Donbas and giving up the Crimean peninsula.”

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UK’s goods trade deficit with the EU hits record high of £21.1bn

The latest trade figures released by the ONS yesterday show that in the three months to February 2015 the UK’s trade deficit with the EU in goods increased by £1.5bn to reach £21.1bn, a record high since comparable records began in 1998. Over the three month period, the EU accounted for 47.6% of UK goods exports while the rest of the world accounted for 52.6%. Meanwhile, the Daily Mail cites Open Europe’s recent Brexit report which found that the financial services sector could be the hardest hit, but that overall, Brexit could come with a benefit for the UK economy depending on the policies adopted by the UK.

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National Front leader Marine Le Pen announces disciplinary procedure against her father

Leader of France’s National Front Marine Le Pen announced on French TV channel TF1 yesterday that her father Jean-Marie Le Pen, who is the honorary president and the far-right party’s founder, would be called to disciplinary hearing after making controversial comments about the Holocaust, adding that he “needs to show some wisdom and withdraw from political and public life.” Her father reacted on French radio station RTL, saying that he was “flabbergasted” about the decision and that his daughter “is in the process of blowing up her own party.”

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Health Secretary Jeremy Hunt says he would consider supporting UK leaving the EU if deal isn’t right

When asked whether he would consider voting to leave the EU on BBC Five Live, Health Secretary Jeremy Hunt said, “If we don’t have the deal we need, yes.” However, he added, “But I think we can get the deal we need, because I have confidence in David Cameron. He has stood up to European leaders before.” He also said a Conservative government would tackle abuse of the welfare system, particularly the NHS, saying, “I  have no problem with foreigners using our health service, but if they are not paying for it through their taxes, they must be charged for it.”

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