17 February 2015

Eurogroup meeting halted early as Eurozone insists Greece must ask for an extension of its current bailout programme

In an unprecedented move, last night’s meeting of Eurozone finance ministers was abandoned early after Greece and its Eurozone partners failed to reach agreement on a draft statement. Eurogroup Chairman Jeroen Dijsselbloem presented the Greek delegation with a draft statement which was rejected as “unacceptable” and “absurd.” The Greeks then proceeded to leak the version to the press and brief them that no deal was possible under such terms, leading to the meeting being ended.

In the ensuing press conferences, the Eurogroup presented an almost united front, expressing willingness to negotiate with Greece but insisting that it must seek an extension of the current programme. Negotiations will not continue until such a request is made, according to Dijselbloem, though he stressed we “can use this week, but that’s about it.” Belgian Finance Minister Johan Van Overtveldt told VRT Radio only “France is leaving some openings but then ultimately agrees with the consensus of the 17 others… To give in to Greece now, specifically to the demands which the Greek government is constantly raising, would endanger the future of the monetary union.”

However, in his own press conference, Greek Finance Minister Yanis Varoufakis said that he had been presented with an earlier draft statement by European Economics Commissioner Pierre Moscovici which he had been willing to sign. The statement was based on negotiations with the Commission and spoke of “an intermediate step” towards a new arrangement with officials saying the agreement included a promise not to force any unwanted measures on Athens. Varoufakis remained optimistic though, saying he expected negotiations to continue and a deal on “phrasing” to be found within “48 hours”, with the two sides “meeting halfway.”

Open Europe’s Raoul Ruparel is quoted on the front page of City AM saying, “[The dispute] is more than just wording. There is a substantial difference there and I think that it’s quite a closely held belief for Greece that it doesn’t want any kind of extension of the current programme.” Open Europe Director Mats Persson is quoted in Frankfurter Allgemeine Zeitung saying that the Greek government is behaving as though a Grexit would be just as painful for the rest of the Eurozone as it would be for Greece, while the Guardian’s Eurozone crisis live blog features Open Europe’s rolling analysis of yesterday’s meeting.

Source: Open Europe blog Kathimerini The Financial Times City AM VTR Radio CNN: Van Overtveldt Guardian Eurozone crisis live Frankfurter Allgemeine Zeitung

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Cameron urged to appoint lead EU negotiator

The Financial Times features Open Europe’s ‘How to negotiate in Europe’ event, outlining how David Frost, CEO of the Scotch Whiskey Association, Open Europe Advisory Council Member, and until recently, Britain’s most senior trade diplomat, recommended that Prime Minister David Cameron appoint a full-time lead negotiator to secure his proposed new deal for Britain in the EU and “to help drive cautious Whitehall officials to secure the best possible outcome.” Mr Frost said that it should be “a senior, well-respected parliamentarian with political authority, no distractions and able to operate in the Commons.”

Source: The Financial Times Open Europe Event: How to negotiate in Europe Open Europe Guest Essay - Frost

Minsk agreement hangs in the balance as fighting continues around Debaltseve

The Minsk agreement appeared to be on the verge of collapse as intense fighting between Ukrainian forces and Russian-backed separatists continued around the key strategic railway hub of Debaltseve, with both sides refusing to withdraw their heavy weaponry from the field as had been agreed. Meanwhile, the EU yesterday passed a new round of individual sanctions which had been deferred by a week to facilitate the Minsk negotiations.

Source: The Financial Times The Times The Daily Telegraph

Italy targets reforms to help banks deal with bad loans

The Financial Times reports that Italy is considering taking action to tackle the €180bn in non-performing loans held by Italian banks. The plans are focused around speeding up the judicial system to deal with loan write offs and fiscal incentives to make it easier for banks to stomach write downs. A bad bank is under consideration but seems unlikely due to state aid constraints. Changes will also be made to the governance system of Italian mutual banks.

Source: The Financial Times

Irish government dismisses IMF claims it could have secured debt write-down

Irish Finance Minister Michael Noonan has dismissed claims by the former IMF chief of mission to Ireland Ashoka Mody that his country scuppered an opportunity to secure a debt write-down. The IMF economist yesterday suggested that the Irish government was in a position to negotiate a “slower pace of austerity” when it came to power in 2011.

Source: Irish Independent

Powell: If peace talks fail Libya could end up posing serious threat to Europe and the UK

In an interview with the Guardian, Jonathan Powell, the UK government’s special envoy to Libya, warns that the country “could end up like a Somalia by the Med which would have very serious consequences for Tunisia… for Egypt, obviously, but also for southern Europe and eventually for us… if it does descend into a civil war the consequences for us will be very serious – not just in terrorism but in terms of people-smuggling, drugs and arms and everything else too. Libya is far too big to contain.”

Source: The Guardian

Commissioners Malmström and Hill: TTIP a “no-brainer”

Writing a joint-piece for the Guardian’s Comment is Free, EU Trade Commissioner Cecilia Malmström and Financial Services Commissioner Jonathan Hill argue that pursing the EU-US free trade deal (TTIP) is a “no brainer”. On the hotly debated issue of the investor-state dispute settlement mechanism (ISDS) they write it is “a mechanism for arbitration which has been around since the 1950s, to ensure that investors are treated fairly. It is in our interest to have an international system that ensures legal certainty, transparency and accountability, and we are now carefully examining how a TTIP deal on investor protection could strike the right balance.”

Source: Guardian Comment is Free: Malmström and Hill

Betting on Brexit: What are the Chances of the UK leaving the EU?

Open Europe and Ladbrokes Politics invite you to an evening event on 26 February to explore one of the most explosive political questions of the day: “What are the chances of the UK leaving the EU?” Join us for an informal drinks reception in Westminster where Open Europe, Ladbrokes Politics and YouGov will break down how each one views the odds of a UK exit from the EU.

Guests will have the chance to place their own bets as we present our assessment based on in-depth analysis of UK public sentiment and developments in Britain, the EU, and the Eurozone. RSVP to attend the event here, or email amy@openeurope.org.uk.Places are limited and will be allotted on a first-come, first-serve basis.