11 June 2015

Osborne: New EU settlement must protect integrity of single market

While Britain will “support the Eurozone to undertake the further integration it needs,” the UK should not be penalised for remaining outside the single currency, Chancellor of the Exchequer George Osborne said in his annual Mansion House speech yesterday. “We need a settlement that recognises that while the single currency is not for all, the single market and the European Union as a whole must work for all,” he said.

Building on his Open Europe speech from 2014 – his first set piece speech on the EU, in which he called for safeguards for non-euro states – Osborne said, “Among the principles we seek to establish in this re-negotiation are these simple ones: fairness between the euro-ins and the euro-outs enshrined, and the integrity of the single market preserved… We want a settlement between the UK and the Eurozone that protects the single market and is stable, fair and lasts.”

Meanwhile, Open Europe Co-Director Raoul Ruparel is cited by Politico arguing that “Removing the commitment to ever closer union, would change the whole spirit and direction of the treaties,” while German Financial Daily Handelsblatt cites Open Europe’s Blueprint for EU reform, laying out our vision for an ambitious reform agenda to fundamentally change the UK-EU relationship.

Separately, UK Prime Minister David Cameron will continue to hold talks with other EU leaders – today meeting his counterparts from Spain, Belgium, Finland and Romania.

Source: George Osborne: Open Europe Speech Open Europe: Blueprint for EU Refrom Politico Reuters EurActiv

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Further round of talks between Tsipras, Merkel and Hollande yields no breakthrough

Greek Prime Minister Alexis Tsipras yesterday met German Chancellor Angela Merkel and French President François Hollande in Brussels. Reports suggest that little progress was made. Tsipras said the meeting was “constructive”, while Merkel told reporters this morning that Greece “will work intensively and with high pressure with the three institutions [European Commission, ECB and IMF] in the coming days to solve all open issues.” The Greek Prime Minister will today hold talks with European Commission President Jean-Claude Juncker.

Meanwhile, according to Bild, the German government is against a third bailout package for Greece and prefers extending the current programme with funds that were originally set aside for Greek banks as well as money from EU structural funds. German MP Carsten Schneider, deputy parliamentary leader of the SPD, told Deutschlandfunk that Merkel’s CDU-CSU faction “is divided [over Greece] and so is the government.” He added that the relationship between the German Chancellor and Finance Minister Wolfgang Schäuble “is almost like the relationship between Tsipras and [Greek Finance Minister Yanis] Varoufakis. She has deprived [Schäuble] of the negotiating mandate.”

The ECB yesterday raised the ceiling on emergency funding for Greek banks via the Emergency Liquidity Assistance (ELA) facility by €2.3bn – the biggest weekly increase since mid-February. Separately, the Council of State – Greece’s highest administrative court – ruled yesterday that the Greek government should reverse cuts to private sector pensions that were implemented in 2012 as part of the EU/IMF bailout programme. Kathimerini notes that the Greek government will have to find between €1bn and €1.5bn to restore pensions to 2012 levels.

Open Europe’s Co-Director Raoul Ruparel writes on his Forbes blog, “Greece will need some kind of debt relief at some point – it cannot pay back all its loans. However, there needs to be an acceptance that this issue has become much more complex now that the large majority of [Greek] debt (76%) is owned by official rather than private creditors. This is no longer a standard debt restructuring. Any proposal must take account of the implications it has for the Eurozone. It would engrain fiscal transfers and mark a huge step towards fiscal union. This issue is now much bigger than just Greece.” Open Europe’s Pieter Cleppe appeared on France 24 discussing the status of the Greek negotiations.


Austrian Foreign Minister: We should “face” Treaty change

Ahead of a meeting with British Foreign Secretary Philip Hammond today, Austrian Foreign Minister Sebastian Kurz said, “There are big differences in the social welfare system in the EU [member states]…that  requires re-shaping if  [EU] free movement is not to be damaged.” He added that “taking up work for only one day shall not be sufficient to receive social welfare benefits.” Questioned about the possibility of EU Treaty change, Kurz stressed it is important that the EU remains dynamic and competitive and “if this requires a new Treaty, then we should face it.”


Die Welt: Brexit more dangerous for Germany than Grexit

Die Welt’s chief economic correspondent Dorothea Siems writes, “Let the Greeks go rather than the Brits.” arguing that, “the exit of the debtor country [Greece] from the currency union seems bearable. The exit of a liberal country such as Great Britain would be much worse.” Her comments echo those made by Open Europe Berlin Director Michael Wohlgemuth, in an article published in Frankfurter Allgemeine Zeitung, where he argued that for Germany (and Europe), “a plausible UK exit from the EU is far more dangerous [than Grexit]. Not only is Great Britain overtaking France as [Europe’s] second-largest economy with 15% of EU GDP, but in the next 20-30 years, the British GDP may even be on track to overtake Germany’s…Greece’s contribution to EU GDP, comparatively only constitutes 1.3%.”


Italian Finance Minister calls for Eurozone unemployment insurance scheme

In an op-ed published by several European dailies, Italian Finance Minister Pier Carlo Padoan argues, “Eurozone labour markets especially must be made more resilient. This could be done by introducing a common European unemployment insurance scheme…Progress towards a genuine monetary union requires a stronger element of risk-sharing. While in the long run [EU] Treaty changes will be needed for such ambitious institution building, the existing EU Treaties could allow the establishment of a targeted unemployment insurance fund and a euro area budget.”


Polish PM forces senior politicans to resign to arrest falling support

Ewa Kopacz, Prime Minister of Poland, has forced the resignation of the speaker of the country’s parliament and six ministers on Wednesday in a reshuffle aimed at halting sliding support for her Civic Platform party. The move is seen as last-ditch attempt to arrest the falling popularity of the government, which has accelerated since an opposition party won last month’s presidential election.