19 February 2015

Greece requests six-month loan extension, but details on conditions remain unclear

The Greek government has this morning officially requested a six-month extension of its agreement with the Eurozone – the ‘Master Financial Assistance Facility Agreement’ (MFAFA). However, the WSJ Real Time Brussels blog points out that, under the existing agreement, the loans are conditional on full implementation of the reforms attached to the loans in the so-called  ‘Memorandum of Understanding’, which the Greek government previously has said it will renegotiate. Greek Finance Minister Yanis Varoufakis said, “The application will be written in such a way so that it will satisfy both the Greek side and the president of the Eurogroup.” Kathimerini notes that, while the wording may change, the substance of the extension will not be much different to that requested by the previous government. Following the Greek request, Eurozone finance ministers will meet tomorrow afternoon.

Meanwhile, yesterday the ECB agreed to continue to allow Greek banks to access the Emergency Liquidity Assistance (ELA) and raised the ceiling on the amount they can request by €3.3bn to €68.3bn. However, reports suggest that the Central Bank of Greece requested that the ceiling be raised by €10bn. ECB officials have this morning flatly rejected a report by Frankfurter Allgemeine Zeitung that it favours Greece introducing capital controls. Separately, the Times reports that Greek journalist Kostas Vaxevanis has found out that, shortly before the 25 January Greek elections, Greece’s financial crimes police, the SDOE, had begun shredding numerous documents linked to cases of corruption.

Open Europe’s Raoul Ruparel appeared on BBC News this morning discussing the situation in Greece. Raoul is also quoted by The Daily Telegraph as saying, “The biggest areas of disagreement are on labour market and pension reforms enshrined under the current bailout. Greece rejects these almost entirely while they are seen as vitally necessary by the Eurozone. It could be possible to kick these areas into the long grass but they will no doubt resurface later on as any funding or debt relief will probably be tied to such reforms.”

Source: Kathimerini The Financial Times The Wall Street Journal: Real Time Brussels Bloomberg The Times Frankfurter Allgemeine Zeitung

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Former French President Giscard d’Estaing calls for “friendly” Greek euro exit

In an interview with Les Echos, former French President Valéry Giscard d’Estaing calls for a “friendly exit” of Greece from the Eurozone, adding, “Greece’s euro entry in 2001 was a clear mistake. I was against at the time and I said it.”

Source: Les Echos: Giscard d’Estaing Le Monde

Sweden’s anti-immigration party polling at record high

A new survey for YouGov puts support for the anti-immigration Sweden Democrats at a record high of 19% (+2.1%). The ruling Social Democrats are on 30%; the Moderates on 21.8%; the Centre Party on 6.7%, the Green Party on 6.3%, the Liberal People’s Party on 4.4%; and the Christian Democrats on 3.5%.

Source: Affärs Världen Avpixlat

Former centre-right Interior Minister Pavlopoulos elected new Greek President

Prokopis Pavlopoulos, a member of the opposition New Democracy party and a former Interior Minister in the centre-right government of Kostas Karamanlís, was yesterday elected new Greek President by a large majority of Greek MPs – 233 out of 300. Only two MPs from the ruling SYRIZA party and one from the opposition New Democracy abstained in disagreement over the choice of the candidate, Kathimerini reports.

Source: The Wall Street Journal Kathimerini

David Cameron: 2017 is “a better choice, frankly” for EU referendum

The Daily Telegraph reports that David Cameron has said “I want to… spend some time getting a better deal for Britain and Europe… That referendum will be held by the end of 2017, if I’m Prime Minister… I think that’s a better choice, frankly, than saying: ‘Let’s have an In/Out referendum tomorrow.’”

Source: The Daily Telegraph Open Europe Blog

Le Figaro: France could get another deficit target delay

Le Figaro reports that the European Commission gives France until 2018 – one year after the next presidential election – to cut its deficit below 3% of GDP. Separately, the French government will this evening face a confidence vote on the approval of the liberalisation bill drafted by Economy Minister Emmanuel Macron – but is expected to survive. Open Europe’s Vincenzo Scarpetta is quoted by BFM TV as saying that the French government’s decision to force the bill through without a vote in parliament “will no doubt create further bad blood within the left wing of the [ruling] Socialist Party – potentially making the adoption of key economic reforms even harder in future.”

Source: Open Europe Blog BFM TV INSEE Le Figaro

EU migrants working in the UK up 10%

The latest UK Labour Market Statistics, published yesterday, show that the number of EU migrants in jobs rose by 181,000 or 10% to 1,899,000 in the last quarter of 2014 compared with the same period in 2013.

Source: The Times Frankfurter Allgemeine Zeitung

Lord Hill launches green paper on ‘Capital Markets Union’

Launching his green paper on ‘Capital Markets Union’ yesterday European Commissioner for financial services Lord Hill said “The banking system will continue to play a pivotal role in Europe’s economy… and I’m sure many companies will continue to get the bulk of their finance through bank lending. But there will be others that would welcome more options for finance.”

Source: The Daily Telegraph EurActiv

EU antitrust chief prepares to crack down on Gazprom

Margrethe Vestager, the EU Commissioner for Competition, is preparing to open an investigation against Russian energy company, Gazprom, reports The Wall Street Journal.

Source: The Wall Street Journal Reuters

UK will not gold-plate ESMA rules on payments for research from brokers

Reuters reports that the UK’s Financial Services Authority will not seek to impose a tougher version of European Securities and Markets Authority (ESMA’s) proposed rules that research should be paid for directly by investment firms or from a ring-fenced account funded by a specific charge on customers.

Source: Reuters

European Commission considers taxing e-cigarettes

The European Commission is consider levying taxes on e-cigarettes in a move that will see their price rise, and hinder their take-up. In a document seen by The Financial Times, the Commission has asked excise duty experts to consider “the best way to achieve fiscal equal treatment,” between normal cigarettes and e-cigarettes.

Source: The Financial Times

Fallon: Putin may deploy covert warfare in the Baltics

The Times quotes British Defence Secretary Michael Fallon as warning that “I’m worried about Putin, I’m worried about his pressure on the Baltics, the way he is testing NATO.” He added there is a “very real and present danger” that Russia would deploy covert warfare techniques in the Baltic states, and that “NATO has to be ready for any kind of aggression from Russia whatever form it takes.” Meanwhile, following the withdrawal of Ukrainian forces from the strategic hub of Debaltseve yesterday, Ukrainian President Petro Poroshenko called for international peacekeepers to be deployed to enforce the ceasefire.

Source: The Times Frankfurter Allgemeine Zeitung