Daily Press Summary
Eurozone begins to prepare contingency plans for Grexit; Commission considering extending Greek bailout programme once more
Eurozone begins to prepare contingency plans for Grexit;
Commission considering extending Greek bailout programme once more
The WSJ reports that financial firms are once again readying contingency plans for a Greek exit from the euro. Die Welt reports that support for a Greek debt haircut is growing in Brussels, citing a senior EU official as saying that “a debt haircut in Greece is unavoidable.” Dutch Prime Minister Mark Rutte said in an interview on Sunday that a Grexit now would be “bizarre” due to the significant reform efforts made by Greece.
Spanish news agency EFE reports that the European Commission is to propose extending the Greek bailout programme by a further six months. The move would aim to avoid liquidity problems for the period between 28 February – when the current extension expires – and the agreement of a new credit line with the incoming Greek government. Open Europe’s Raoul Ruparel is quoted as saying that, in practical terms, a new bail-out extension would make sense as it would help reduce market uncertainty. However, if agreed now, such a plan could boost the vote for SYRIZA.
SYRIZA leader Alexis Tsipras said on Saturday that he would issue extra short term-debt (T-bills) to help cover the government’s funding needs if he came to power. However, the Greek Finance Ministry said this morning that such issuance would need consent from the EU/ECB/IMF Troika since the amount of short term debt outstanding is already at the maximum allowed by the bailout programme. A Kapa poll published by To Vima yesterday put SYRIZA on 28.1% and New Democracy on 25.5%. An Alco poll for Proto Thema put them on 31.2% and 28% respectively.
Welt De Volkskrant Kathimerini Kathimerini 2 WSJ WSJ 2 Bloomberg FAZ De Volkskrant Nu Z24 Z24 EFE El País
Ahead of a meeting with his European counterparts in Paris on Sunday, Spanish Interior Minister Jorge Fernández Díaz told El País that, in the wake of the Charlie Hébdo attack in Paris, Spain “will back the establishment of border controls [in Europe] and it’s possible that, as a consequence, one will need to change the Schengen Treaty to an instrumental effect.”
El País: Fernández Díaz Times FT WSJ FT 2
David Cameron will today launch the six key themes of the Conservative Party’s election campaign, saying they will be the deficit, jobs, taxes, education, housing and retirement.
Bernd Lucke, leader of Germany’s anti-euro AfD party, comments in an interview with Die Welt that he regards all protestors in Germany’s anti-Islamisation Pegida movement as “potential AfD voters,” and that they are “welcome” to the party if they share the same values as AfD. Meanwhile, about 35,000 people marched through the German city of Dresden on Saturday in a counter-march in protest against recent Pegida rallies.
Die Welt BBC Times
Spanish Finance Minister: Podemos would take Spain out of the euro
Spanish Finance Minister Luis de Guindos said in a TV interview with La Sexta that the economic plan of anti-establishment party Podemos “would take [Spain] out of the euro”, adding that it is “irresponsible to generate doubts over the repayment of [Spanish public] debt.” Meanwhile, a new Metroscopia poll for El País has Podemos in the lead on 28.2%, the Socialist Party on 23.5% and the ruling centre-right Partido Popular on 19.2% – less than half the 44.6% the party won in the 2011 general election.
Open Europe Blog El País Expansión
ECB divided over merits of sovereign bond purchases
In an interview with Der Spiegel published on Saturday, ECB Executive Board Member Sabine Lautenschläger said, “I am currently not convinced by large-scale purchases of government bonds”, adding, “There must be reasonable balance between the benefits of, and risks entailed in, such a programme. I do not believe that to be the case at present”. In an interview with Welt am Sonntag, Italian Central Bank Governor Ignacio Visco struck a different tone, warning against “underestimating” the risk of low inflation. He added that purchases of sovereign bonds are the “most effective” policy in the current situation.
Spiegel: Lautenschläger Welt: Visco Reuters NYT
Saturday’s Telegraph reported that the cost of retired EU officials and MEPs’ pensions this year will reach £1.3bn, an increase of 7.3%. The EU’s total pension liabilities as of 2013 stood at £35.8bn, of which the UK is liable for around £4bn.
According to La Repubblica, Italy is planning to sell to the ECB at least €50bn of bad loans currently held by Italian banks. The bad loans would be sold as part of “packages” of Asset-Backed Securities, and would be guaranteed by the Italian government. Meanwhile, the FT reports that European banks are coming under renewed pressure to raise further capital following new individual targets set by the ECB.
La Repubblica FT
Former Croatian Foreign Minister Kolinda Grabar-Kitarovic of the centre-right HDZ party won the country’s Presidential elections yesterday, beating the incumbent Ivo Josipovic by 50.5% to 49.5%.
BBC FT WSJ EurAtiv
EUobserver cites an EU policy paper endorsed by Denmark, Estonia, Lithuania, and the UK which calls on member states’ media regulators to hold Russian broadcasters accountable if they “manipulate, deceive, incite hatred, or propagate war”. The paper also argues that the EU “should aim to influence behaviour and attitudes amongst key audiences.”
Hungarian Prime Minister Viktor Orban used Sunday’s March against terrorism in Paris to call for a crackdown on immigration, saying that the Charlie Hebdo murders should make the EU restrict access to migrants with “different cultural characteristics.” He added, “Economic immigration is a bad thing in Europe, it should not be seen as having any benefits, because it only brings trouble and danger to the peoples of Europe.”
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