2 March 2015

Greece seeks to renegotiate bond payments to the ECB

Greek Finance Minister Yanis Varoufakis said on Saturday that he is seeking to negotiate the €6.7bn bond repayment due to the ECB in July and August. “We will fight it… If we had the money we would pay… They know we don’t have it”, he said. In an interview with Handelsblatt Varoufakis said, “I’m not interested in the money [remaining in the current programme] if the price for it is to enforce the remedy that’s been used so far, that has entrenched the debt and deflationary cycle.”

German Finance Minister Wolfgang Schäuble said, “If [Greece] doesn’t make the first payment on time, that’s a so-called default and I wouldn’t want to be in [Varoufakis’] shoes bearing responsibility for what would then happen to Greece.” In an interview with the Financial Times Eurogroup Chief Jeroen Dijsselbloem suggested that, if Greece pushed ahead with reforms, it could get a “first disbursement” of the next tranche of bailout funds “somewhere in March”.

Greek Prime Minister Alexis Tsipras said over the weekend, “Let them forget a third bailout. The Greek people put an end to bailouts with their vote.” He also said of the negotiations, “We found opposing us an axis of powers…led by the governments of Spain and Portugal which for obvious political reasons attempted to lead the entire negotiations to the brink,” adding that Spain wants “unconditional surrender” before “the Greek example effects other countries…and mainly before the Spanish elections.” Spanish Prime Minister Mariano Rajoy hit back saying, “We’re not responsible for the frustration generated by the Greek radical left, which promised the Greeks what they knew they couldn’t keep – as it’s now been proved.”

Meanwhile, reports in the Greek media suggest unrest within Syriza round the deal struck with the Eurozone. Members of the far-left wing submitted a motion within the party to oppose the deal and though it was rejected, it gained the support of 41% of the party according to Capital.gr.

Separately, a Metron Analysis poll published on Saturday in Parapolitika showed that 76% of Greeks had a positive view of the Syriza-led government so far with two thirds supporting their approach to negotiating with the Eurozone.

Source: Kathimerini Reuters The Financial Times The Wall Street Journal EurActiv El País ABC Capital.gr

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Senior Conservatives warn against repeating “unrealistic” migration target

The Times reports that Jeremy Hunt, the Health Secretary, and Eric Pickles, the Communities Secretary, are said to have raised concerns over the Conservative Party’s net immigration target. Ken Clarke said the pledge had been a mistake, and Baroness Warsi, the party’s former chairwoman, said that a repeat of the “unrealistic target” would set the party up for another failure. Meanwhile, a YouGov poll for the paper finds that 75% of voters believe that immigration has been too high over the past ten years and 57% do not believe that cutting numbers would damage the economy.

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Clegg would rule out second Tory-Lib Dem coalition over EU referendum

Saturday’s Sun reported that according to a senior Liberal Democrat source, Deputy Prime Minister Nick Clegg has said that he would rule out a second coalition with the Conservative over the issue of an EU referendum. The source is cited as saying that “This is pretty much a red line for Nick. There is no way he will sign up to plans that will allow the Tories to set the terms of a renegotiation, carry out that renegotiation and then hold a referendum on that basis which could see Britain leave the EU.”

Meanwhile, the Sunday Times’ David Smith cited Open Europe’s newly published ‘Brexit Barometer’ which puts the chances of a UK exit from the EU in the next parliament at 17%. The barometer was also cited by Austrian Daily Die Presse.  Open Europe’s Stephen Booth appeared on RTE Radio arguing that the chances of Brexit would be reduced if voters could be persuaded that the EU was capable of reform.

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Sarkozy highlights Syriza experience as warning for Front National

Former French President and opposition leader Nicolas Sarkozy has said in an interview with Le Figaro, “I say to all those who hailed the Greek election [results]: here’s where voting Front National would lead you to. Shortly after being elected, [Greek Prime Minister Alexis] Tsipras has swallowed his electoral promises, he got down on his knees.”

Meanwhile, a new Odoxa opinion poll for Le Parisien has found that that the Front National is currently on 33% in voting intensions for the upcoming local elections, an increase of 7% compared with last month. Sarkozy’s UMP is on 27% and the President François Hollande’s Socialist Party is on 19%.

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Leader of Germany’s anti-euro party: "Islam foreign to almost all Germans"

Speaking at a party convention over the weekend, Bernd Lucke, leader of Germany’s euro-critical Alternative für Deutschland party said, “Islam is foreign to most, or almost all Germans. This cannot be ignored.”  By a large majority, AfD delegates called for a general ban on minarets and burquas at the same convention.

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Thousands of people attend Lega Nord rally in Rome

Thousands of supporters of Italy’s anti-euro and anti-immigration Lega Nord attended a rally in Rome on Saturday. Addressing the crowd, Lega Nord leader Matteo Salvini called Prime Minister Matteo Renzi “the dumb servant of Brussels”. Lega Nord is consolidating as Italy’s third-largest party, according to the latest opinion polls. An alternative march called ‘Never with Salvini’ also took place in Rome on the same day.

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EU money market funds regulation proposal draws criticism from all sides

The Financial Times reports that the latest proposals for regulating money market funds from the European Parliament’s Economic and Monetary Affairs Committee have failed to please anyone. The industry is concerned about plans to force 90% of the constant net asset value funds to switch to a “low volatility net asset value structure”, while others believe it was a mistake to drop the plans to force funds to hold a 3% capital buffer.

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Government’s cuts to red tape undone by new EU regulations

The Coalition Government’s cuts to regulation since 2010 have led to savings to businesses worth £2.2 billion a year, according to the regulatory policy committee (RPC). However, the RPC has also calculated that new EU rules have imposed £2.3 billion in net costs to businesses since 2013.

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Estonian Prime Minister Taavi Rõivas poised to retain power

With most of the votes counted, pro-NATO Estonian Prime Minister Taavi Rõivas’ governing Reform Party has claimed victory in the parliamentary elections gaining 27.7% of the vote, 30 seats out of 100 parliamentary seats, and the chance to build a new coalition. The pro-Russian Centre Party took 24.8% of the votes.

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New EU rules to impose losses on bondholders come into play with Austrian bad bank

The Austrian Finance Ministry announced on Sunday that Heta Asset Resolution AG will not get fresh capital from the government, making the ‘bad bank’ of failed Hypo-Alpe-Adria-Bank International AG the first case under new EU rules that impose losses on bank bondholders. Heta has already cost Austrian taxpayers about €5.5bn in aid – and had notified the government that it may need as much as €7.6bn on top of that. The government has announced a moratorium on some of the bank’s debt and interest payments until May 2016 to allow time for a wind down plan to be drawn up.

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Schäuble pledges to increase German defence spending

German Finance Minister Wolfgang Schäuble has pledged that Germany will increase military spending in coming years.  He told the Bild am Sonntag, “Of course, in view of the crises and instability in the world, we have to shoulder higher spending on defence in the next few years.”

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