Eurozone reports and reactions – Italy hot stuff

Yesterday evening the chairman of the Euro Group, Jean-Claude Juncker, held a press conference (recorded, including questions and answers 35:33), together with the Commission vice-president Olli Rehn and the EFSF chief executive officer Klaus Regling.


Media reports and reactions

We take a look at some reports and reactions in the media regarding the eurozone meeting.

Bloomberg reports that payment of the next tranche of loan aid to Greece is possible by mid-December if the new government and the two main parties give a written commitment to the bailout terms, according to Juncker, who also replied that he knew who was going to be the following Greek prime minister.

Despite Juncker's answer about the next Greek prime minister, there is still no agreement according to Reuters. The report paints the former ECB vice-president Lucas Papademos as the front runner to head the transitional government of national unity until the election 19 February 2012. However, the news agency hedges its bets by mentioning the European ombudsman Nikoforos Diamandouros and the envoy to the IMF Panagiotis Roumeliotis.

Reuters provides quotes from the document on EFSF leverage Regling mentioned.


Italy hot stuff

Juncker pointed out that Italy is not undergoing an EU rescue programme. However, Italy experienced unprecedented speculation yesterday, from at least three angles.

Media speculated wildly on (1) the possible resignation of prime minister Silvio Berlusconi and (2) Italian bond yields surged towards the 7% level. Both bonds and (3) the stock market fluctuated on the conflicting rumours, positively on resignation and negatively on denial.

In the background we have a vote of confidence in the Italian parliament today, as well as the economic reforms sketched by Berlusconi.

Prime minister Silvio Berlusconi promised a string of reforms to the European Council 26 October 2011 and the European Central Bank, as described by EurActiv, Reuters and The Guardian. The Corriere della Sera had a report, but also the full text of Berlusconi's letter (in Italian).

The finance ministers meeting in the Ecofin Council today will keenly follow the political developments in Italy and the market reactions, and want to hear about concrete plans to put the promised reforms into practice.



Ralf Grahn

Eurozone: Credible Italy?

We have looked at the background and gaps and filled the Ecofin file with recent EU and eurozone statements. We are anxiously eyeing Greece, but we also know that we are all aboard the Greek rollercoaster on the slopes of the Apennines.

The EU finance ministers meet in the Economic and Financial Affairs Council (Ecofin) Tuesday 8 November 2011, after the meeting of the Euro Group this evening, to take stock of developments and to chart a route to safety.

If Greece is a big problem, Italy is both big and a problem of proportions for the stability of the euro area as a whole.


Italy

The news out of Italy is far from reassuring.

According to Reuters, prime minister Silvio Berlusconi has one day left to win over waverers and to see off party rebels, before a crunch vote on Tuesday. On Friday the yield of Italian bonds reached more than 6.4 per cent, there is uncertainty of Italy's commitment to EU and IMF monitoring and the bond-buying programme of the European Central bank is conditional on the concrete delivery of structural reform.

Calls for Berlusconi's resignation and the possibility of early elections add to the muddled picture, while the G20 summit left the eurozone with warm words, but no money to top up the EFSF, as reported by CNN (here and here).

Bloomberg sees that the Italian yield surge has already set Berlusconi on the path to bailout. Italy has to refinance 37 billion euros of bills and bonds by year-end and another 307 billion euros in 2012, although the big and diversified real economy of Italy offers some silver lining.



Ralf Grahn

Sarkozy and Berlusconi: Helping or hurting their countries?

One of the questions in the wake of the French “Romagate” affair is how it affects the international standing of France. Regards citoyens republished an article by Christian Lequesne in Le Monde: L’attitude du pouvoir vis-à-vis de l’Europe isole la France au lieu de renforcer son rôle.



Lequesne, who is director of CERI (Centre for International Studies and Research), identifies four different elements in president Nicolas Sarkozy’s intergovernmental view of the European Union. This view is counter-productive, and it leads to isolation.


Thomas Friang and Solène Meissonnier speak about an insolent sovereignty in Le Taurillon, when they predict that the Roma policy of the French government will affect the building of Europe, as well as France’s international standing: Une souveraineté insolente.



The only other major EU member state to give the French government clamorous support is Silvio Berlusconi’s Italy. Therefore it is interesting to see how Ferruccio Pastore deals with Paris and Rome in Affari Internazionali: L’asse Parigi-Roma scuote le fondamenta dell’Ue.

According to Pastore the split at the European Council concerned a fundamental question about EU citizenship: does it belong to the poor. The axis between Paris and Rome looks like a precarious alliance between two leaders in crisis. The opened crack concerns the very foundations of the community project.



Also in Affari Internazionali, Bruno Nascimbene writes about the Roma and EU citizenship: La disputa dei rom e i diritti dei cittadini dell’Ue.

Nascimbene discusses EU citizenship, discrimination, free movement, ‘voluntary’ repatriation and the requirement to decide on a case by case basis.


All in all, it looks like Sarkozy and Berlusconi have harmed their countries much more than they have helped.




Ralf Grahn



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Sarkozy’s “Romagate”: Berlusconi or Mugabe?

The Bloggingportal.eu blog headlined its Week in Bloggingportal France vs. Europe, but more than yesterday’s news the French crackdown on illegal Roma camps is a fountain of learning about how the European Union (mal)functions.



Charles Forelle on the WSJ Real Time Brussels blog linked to a story in Le Point where the French senator Philippe Marini’s regrets at the existence of Luxembourg had led prime minister François Fillon to offer excuses to the Grand Duchy.

Forelle went on to instigate his readers to find (or invent) more extravagant ripostes.

What on earth should we think of?



Daniel Mason on The Endless Track saw that the discussion should be conducted without referring to the Nazis.



The advice of Charlemagne’s notebook was: Don’t mention the war.



Way back European Alternatives presented the “security package” of Silvio Berlusconi’s government in Italy after the 2008 elections, and the European Union’s lack of real action.



Massimo Merlino wrote a detailed analysis called: The Italian (In)Security Package – Security vs. Rule of Law and Fundamental Rights in the EU (downloadable here).



According to Michael Day, in The Independent, Berlusconi has given his full support to France's controversial decision to forcibly repatriate thousands of Roma people to Eastern Europe.


If we play along, and leave Hitler outside, isn’t Berlusconi the obvious reference for Sarkozy’s ethnically motivated crackdown on Roma?



The French authorities have been at pains to explain that they have targeted only illegal Roma and Travellers settlements. So was, according to Robert Mugabe, the demolition of homes in Zimbabwe during the so called Operation Drive Out Trash (source: Wikipedia).

So how about Mugabe, if we look for role models beyond Europe?

President Sarkozy must have thought that the European Commission would roll over, since it had not confronted Berlusconi seriously, but regardless of the legal consequences Sarkozy has also chosen his company internationally.




Ralf Grahn

Governments taking over the European Parliament too?

How are we to understand the latest news about the coming President of the European Parliament?

EurActiv writes ‘Face-off between Italians, Poles over Parliament presidency’ (26 March 2009):

http://www.euractiv.com/en/eu-elections/face-italians-poles-parliament-presidency/article-180656

The leader of the EPP-ED parliamentary group, Joseph Daul, is reported saying:

"We have two candidates: Mario Mauro, who has been designated by Italian Prime Minister Silvio Berlusconi, and Jerzy Buzek, who was nominated by Polish PM Donald Tusk."


***

Are there no limits to the greed of heads of state or government at the expense of a voice by citizens in EU affairs?

A great number of national leaders have effectively gone back on the principle they enshrined in the Lisbon Treaty to let the European elections decide the following President of the Commission, thereby paralysing the political parties at European level and depriving the elections of even a modicum of pan-European public attention.

Prime Ministers now seem to be interfering in the European Parliament’s internal business, that of electing its own President.

And Daul ─ the current leader of the largest group ─ seems to accept this as meekly as a lamb.

Good grief!


Ralf Grahn