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Merkel and Cameron to discuss free movement reforms; Mats Persson: By 2017 Germany will need the UK in the EU more than ever

07 Jan 2015
Merkel and Cameron to discuss free movement reforms;
Mats Persson: By 2017 Germany will need the UK in the EU more than ever
During her visit to London today, German Chancellor Angela Merkel and Prime Minister David Cameron will discuss ideas for EU reform, with the focus likely being on Cameron’s proposed changes to rules around EU migrants’ access to benefits and possible EU treaty changes.

Writing in the Telegraph, Open Europe Director Mats Persson argues that “If Germany is scared of losing the UK [from the EU] now, it should be petrified about 2017” due to the rise of populist, anti-austerity parties like SYRIZA in Greece, Podemos in Spain and the National Front in France meaning that the “north-south stand-off that has dogged Berlin may get even harder to manage.”  Mats also argues that “to avoid setting in motion protectionist forces they cannot control, German politicians just have to get off the fence on free trade.”
Open Europe blog
FT FT Editorial Reuters Telegraph Telegraph: Persson Mail Bloomberg Times Times: Boyes 

Bild
warns Germany preparing for Grexit  as Tsipras pitches SYRIZA as Europe’s “voice of reason”
Writing on Huffington Post, SYRIZA leader Alexis Tsipras describes his party as the “voice of reason” and reiterated that “largest part of the public debt’s nominal value has to be written off.” In an interview with the FT George Stathakis, SYRIZA’s senior economic spokesman,  insisted that Greece will have enough money to fund itself until the end of August, despite the current government warning funds run out at the end of February.  

Meanwhile, Bild reports that, according to unnamed government sources, Germany is preparing contingency plans for a Greek exit from the euro if SYRIZA wins the election, including plans for dealing with a bank run. Meanwhile, Süddeutsche cites government sources saying that Berlin would be prepared to “sit down at the same table” with a potential SYRIZA government. Open Europe’s blog revisiting the Grexit question was reproduced by Zerohedge.
Open Europe blog
Huffington Post: Tsipras Kathimerini Bild FAZ FT FT 2 FT: Spiegel Reuters Reuters 2  

Data released by Eurostat this morning showed that annual Eurozone harmonised inflation was -0.2% in December – meaning the bloc has slipped into negative inflation. However, the decline was driven by a 6.3% drop in energy inflation, meaning core inflation actually rose to 0.8% from 0.7% in November.
Eurostat

Leader of Merkel’s sister party to step down – expects Merkel to run again
Horst Seehofer, State Premier of Bavaria and leader of Angela Merkel’s CSU sister party, tells Die Welt that he will not stand for re-election in 2018. Commenting on a possible fourth term by Chancellor Angela Merkel he says, “Personally, I expect that [she] will put herself forward again.”
Reuters Deutschland
 

Former French PM: Brexit “would be the beginning of the end of the European project”
France’s former centre-right Prime Minister François Fillon told BFM TV this morning, “Britain’s EU exit would be the beginning of the end of the European project. If the British want a lighter Europe, then one needs to agree to change the European organisation and introduce a two-speed Europe…that only deals with big issues: employment, energy, security and financial stability.” Fillon is seen as one of the contenders for centre-right French presidential candidate in 2017.
BFM TV
   

Preliminary estimates by the Italian national statistics office ISTAT show that Italy’s unemployment rate went up to 13.4% in November, with youth unemployment soaring to 43.9% – a new record high.
La Repubblica
ISTAT Il Sole 24 Ore  

Data released yesterday showed that inflation in Ukraine reached 24.9% in 2014, the highest level for 14 years. Meanwhile, the value of Ukrainian bonds continues to fall due to fears over default, while the IMF is due to arrive in the country later this week to assess the situation.
WSJ
Bloomberg  

Denmark’s Foreign Minister Martin Lidegaard has said that, “Even if France has changed its opinion, it is Denmark’s position that the EU is best served by standing by the sanctions [on Russia],” according to the Local Denmark.
Local.dk
   

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