12 June 2015

IMF recalls officials as hope for deal with Greece fade

The stakes were raised over Greece yesterday as the IMF recalled its negotiating officials from Brussels to Washington. IMF spokesman Gerry Rice said, “There are major differences between us in most key areas…There has been no progress in narrowing these differences recently and thus we are well away from an agreement.” But he stressed that the IMF remained “engaged”. ECB officials are also reported to have returned to Frankfurt.

European Council President Donald Tusk had some strong words for Greece saying, “We need decisions, not negotiations now…There is no more space for gambling; there is no more time for gambling. The day is coming, I am afraid, that someone says the game is over.” Eurogroup Chief Jeroen Dijsselbloem said, “We can’t help Greece if Greece doesn’t want to help itself”. The Eurogroup meeting on 18 June is now widely seen as make or break for a deal.

Syriza Parliamentary spokesman Nikos Filis said, “I do not think the prime minister [Alexis Tsipras] will bring an agreement which will be in danger of not passing through the current parliamentary group…Tsipras knows very well what was in our manifesto, what we want to stand for and who we represent.”

Meanwhile, Bild reports that German Chancellor Angela Merkel no longer rules out a Greek default and is making plans for such an eventuality. Bundesbank Executive Board Member Carl-Ludwig Thiele said in a speech yesterday that “insolvency must be possible” for countries in the Eurozone. A new ZDF Politbarometer poll found that 51% of Germans think Greece should not remain in the Eurozone compared to 41% who think they should. The poll also found that 70% of Germans think the EU should not make any further concessions to Greece.

Source: Kathimerini Reuters The Financial Times Expansión ZDF Bild Handelsblatt

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David Cameron continues EU reform talks ahead of June EU summit

David Cameron yesterday discussed his plans for EU reform with his counterparts from Spain, Belgium, Romania and Finland. Spanish Prime Minister Mariano Rajoy told the press that “Spain will be constructive when trying to help [EU renegotiation] plans go forward”, although reports suggest he told Cameron that Spain is against changing the Treaties to restrict EU migrants’ access to benefits. Belgian Prime Minister Charles Michel said after the meeting, “There are some points on which we agree. We have discussed how we can reform the EU, make it more efficient and effective, what strategy is necessary for a better economic development, how to fight social dumping…[However,] there are some red lines for Belgium: the principles of free movement and non-discrimination among EU citizens are inviolable. Neither can there be a veto [power] that would be granted to national parliaments: that would be the end of the EU.”

Romanian President Klaus Iohannis said, “No [EU] member state is allowed to treat people coming from elsewhere differently from its own people…But we are in a position where we have to find practical, non-discriminatory solutions which make it possible to treat these kind of problems…We have to try to separate these two. Leave the free movement as it is – it’s valuable we have to preserve it – and try to extract the part with the social benefit or social welfare…and try to solve that problem because it doesn’t have to come in a package.” Finnish Prime Minister Juha Sipilä reportedly also told Cameron that he is wary of re-opening the EU Treaties.

Source: The Guardian The Daily Mail The Times Le Soir The Independent

ECB denies suggestions it failed to provide privileged information to entire market

In a letter replying to an enquiry from the European Ombudsman, ECB President Mario Draghi denies the claim that one of the ECB’s Executive Board members, Benoît Cœuré, disclosed privileged information to a select audience rather than making it publicly available. Draghi suggests that Cœuré’s comments at a private dinner that the ECB would be frontloading some of its bond purchases were only confirming what the data released earlier in the day and the previous week had already shown. Furthermore, Draghi argues that the pace of frontloading, already shown in the data, did not change. Draghi also confirmed the ECB would soon publish the results of an internal investigation into communication.

Source: ECB letter to European Ombudsman The Financial Times The Wall Street Journal

La Stampa: European Commission considers dropping binding refugee quotas

According to Italian daily La Stampa, the European Commission is considering dropping its proposal for binding quotas for the relocation of refugees among EU member states, due to widespread opposition to the plan. A high-ranking diplomat is quoted as saying, “We’re working on a mechanism on a voluntary basis in order to maintain the commitment without introducing a principle that few [countries] want.” The article notes that up to twelve EU member states are against the idea of binding refugee quotas.

Source: Open Europe Blog La Stampa

Dijsselbloem likely to stay on as Eurogroup head

According to EU diplomats, the current head of the Eurogroup Jeroen Dijsselbloem has guaranteed the necessary simple majority among Eurozone countries for his re-election, reports Frankfurter Allgemeine Zeitung. The paper points out that Germany who originally supported Spanish Economy Minister Luis de Guindos does so now only half-heartedly.

Source: Frankfurter Allgemeine Zeitung

Podemos-backed candidate will become new Mayor of Madrid

Spain’s anti-establishment party Podemos and the Socialist Party have struck a deal that will allow Manuela Carmena, the candidate backed by a ticket of left-wing parties including Podemos, to become the new Mayor of Madrid. The official announcement is expected in a press conference later today. Separately, Susana Díaz of the Socialist Party was re-elected President of Andalusia yesterday thanks to the support of newcomer centrist party Ciudadanos in the regional parliament.

Source: El País El Mundo

EU launches antitrust probe against Amazon

The European Commission on Thursday launched an antitrust investigation into whether Amazon unfairly kept competitors out of the market for electronic books – the latest in a series of actions against US tech giants. Meanwhile, The Financial Times reports that Amazon is more dominant in the European e-book market than in the US, accounting for more than 90% of sales in the UK.

Source: The Financial Times The Wall Street Journal

Die Welt: Open Europe “most quoted authority on EU”

German paper Die Welt today prints a feature on Open Europe, noting that it has become “the most quoted authority on the EU.” The paper cites our vision for Europe as one that believes in “open markets, deregulation and democracy; subsidiarity and the recognition that the European Union is a multi-form entity, which should –  and must – survive with different levels of integration and currencies.” Die Welt also cites our Brexit study, which finds that a British EU exit is a more closely balanced calculation than previous analysis has suggested, and that prosperity of Britain outside the EU will largely be determined series of political decisions (including deregulation and maintaining economic liberalism), that will take place after leaving.