24 February 2015

European Commission says Greek reform list is “sufficiently comprehensive” as a starting point

The European Commission confirmed around midnight that Greece has submitted its list of reforms as part of the deal agreed at Friday’s meeting of Eurozone finance ministers. A Commission source said the list is “sufficiently comprehensive to be a valid starting point for a successful conclusion of the review.” The list includes measures to fight tax evasion, reform the tax system, “unify and streamline” pension policy, eliminate incentives for early retirement, reform public sector wages, raise the minimum wage (although this will be done in conjunction with the EU and IMF, and may be on a delayed timeline), and a pledge to fight the humanitarian crisis but with no negative fiscal impact. Eurozone finance ministers will hold a teleconference this afternoon to discuss the final approval of the list.

Meanwhile, German Finance Minister Wolfgang Schäuble sent a letter to the Bundestag requesting a vote on the four-month extension of Greece’s financial assistance, saying, “Provided Greece avows its obligations and provided there is an agreement in the Eurogroup, the German government would be in favour of the proposed extension.” The Bundestag is expected to vote on the extension on Friday, although party leaders will hold a meeting this evening.

Speaking to the European Parliament’s Economic and Monetary Affairs Committee this morning, Eurogroup Chairman Jeroen Dijsselbloem said that, if the fifth and final review of the Greek bailout is successfully completed, “We will come back to the issue of debt sustainability.” Meanwhile, JP Morgan has estimated that deposit outflows from Greek banks reached €3bn last week, up from €2bn the week before.

Open Europe’s Vincenzo Scarpetta appeared on CNN International yesterday arguing that it will be hard for the Greek government to sell this agreement as a victory at home. Open Europe’s Pieter Cleppe appeared on BBC World Service arguing, “It’s unlikely that the agreement unravels now, given the political capital spent to strike Friday’s deal – which was only about kicking the can down the road for four months, just before Greece needs to pay a few billion euros to the ECB.” Open Europe’s blog analysis of Friday’s deal is cited by Foreign Policy.

Source: Reuters The Financial Times The Wall Street Journal Kathimerini La Stampa Handelsblatt Foreign Policy

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New gas row breaks out between Moscow and Kiev

Russia’s state-owned energy company Gazprom has today said there is a serious risk to Europe’s gas supplies after another dispute with Kiev. Ukraine has to pay upfront for its gas, and Gazprom claims that it only has two days’ worth of supplies left – while Kiev has accused Gazprom of diverting gas it has paid for to the regions held by Russian-backed separatists. Meanwhile, in an interview with state TV, Russian President Vladimir Putin said that the “apocalyptic scenario” of a direct war between Russia and Ukraine was “unlikely” and that if the Minsk agreement was implemented, the situation in eastern Ukraine would “gradually return to normal.”

Source: Reuters BBC

Greece accused of ‘exporting’ asylum seekers to northern Europe

The German government is demanding answers from Athens after it emerged that the former Greek government issued documents to Syrian refugees that would allow them to claim asylum in Germany or other EU countries. The Times quotes Stephan Mayer, an MP for the CSU and spokesman for Angela Merkel’s conservative group on the Interior Affairs Committee of the German parliament, as saying, “I am deeply astonished. The new Greek government must reveal everything quickly and completely. Certainly, if the former Greek government did not act in accordance to EU law, this must be punished and prosecuted by the European Commission.”

Source: The Times

New poll: Scots want veto over Brexit

A new Survation poll commissioned by the Scottish National Party has found that 60% of Scottish voters believe that each of the UK’s four constituent nations – England, Wales, Scotland and Northern Ireland – should have to vote in favour of a UK exit from the EU in an In/Out referendum, with only 14% in favour of the referendum being determined by simple majority across the UK as a whole.

Source: EurActiv

HSBC: UK should stay in EU to influence single market in services and capital markets union

A report by HSBC analysts Simon Wells and Liz Martins argues that the UK would miss out on a chance to influence plans to create a single market in services and capital markets union if it voted to leave the EU. The report concludes, “We believe the UK should stay in the EU. There is no evidence that being a member has harmed the economy – and it may well have benefited. A better approach would be to reform the EU in order to make it more competitive and, in particular, work to complete the single market in services.” However, HSBC’s researchers added, “We think that most of the fundamental attractions of London would not change and that the City could remain a global financial centre: Brexit would not mean terminal decline for the City.”

Source: City AM Open Europe Intelligence

German EU Commissioner criticises French request for further deficit target delay

Handelsblatt reports that German EU Commissioner Günther Oettinger has criticised France for requesting to only cut its deficit to 3% of GDP by 2018 – three years later than initially agreed with the European Commission. Oettinger is quoted as saying that “the credibility [of EU fiscal rules] is on trial.” The article notes that the Spanish and Portuguese EU Commissioners would also be inclined to impose sanctions on France for breaching EU fiscal rules, while the French EU Commissioner Pierre Moscovici and European Commission President Jean-Claude Juncker would be in favour of granting France one last delay under strict conditions. The European Commission is due to announce its decision in early March.

Source: Handelsblatt

European Commission opens investigation into GE-Alstom deal

The European Commission has launched a probe into General Electric’s partial takeover of French conglomerate Alstom, saying that it would investigate whether the proposed deal could lead to higher prices for large gas turbines.

Source: The Financial Times The Wall Street Journal

Finland’s Centre Party maintains poll lead two months ahead of elections

Two months ahead of Finland’s general election, the Centre Party is ahead in the latest poll published by Helsingin Sanomat, on 26.2%. The Social Democratic Party and the Conservative Party are neck-and-neck in the race for the second place, on 17.1% and 16.9% respectively. The (True) Finns are fourth on 14%, while 38% of respondents said they are still undecided.

Source: Helsingin Sanomat