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| IMF adds four European countries to financial risk list - The IMF on Monday added Denmark, Finland, Norway and Poland to its list of countries that must have regular check-ups of their financial sectors, under an effort to prevent a repeat of the global financial crisis.
The International Monetary Fund in 2010 had identified 25 other countries where financial sector evaluations will be mandatory. These reviews had been voluntary prior to the 2008-2009 financial crisis, which showed how quickly financial problems in one country could spread to its neighbors and the rest of the world.
More than half of the 29 financial sectors the IMF deems "systemically important" are located in Europe.
"The financial sectors of these jurisdictions are highly interconnected not just with each other but also with other major financial centers," the IMF said about the focus on European financial centers.
"This makes them central nodes in the global financial network and important for global systemic stability."
The Fund's new evaluations have been shaped by the prolonged sovereign debt crisis in the euro zone, which at times threatened to destroy the currency bloc. The IMF itself has lent billions of dollars to the euro zone's weakest members, including Greece, Portugal and Cyprus.
Under a new methodology also released on Monday, the IMF said it would review not only how exposed one country's banks are to another's, but also consider sovereign debt exposures and the links between a country and its banks.
The Fund also said it would put a greater focus on the connections among each country's financial sector and that of its neighbors when it reviews financial stability. It previously emphasized the size of each financial sector.
The IMF also plans to analyze price contagion, such as the close links among stock markets around the world.
The IMF's executive board welcomed the new methodology, but said it may omit certain countries that have had banking and financial crises since 2008. They were also concerned the new focus on mandatory check-ups in 29 countries would leave IMF staff with less time to do voluntary reviews of the financial sectors in the rest of the world.
(Reporting by Anna Yukhananov; Editing by Nick Zieminski)
13.01.2014 WASHINGTON (Reuters) |
| Q & A: Irish referendum on EU Fiscal Treaty - What is the fiscal treaty?
It is an agreement of 25 of the European Union's 27 members (the UK and Czech Republic excluded) which aims to ensure much closer budgetary co-ordination between countries.
It was agreed in response to the ongoing Eurozone crisis and is designed to restore confidence.
Strictly speaking it is not a treaty - it is an inter-governmental agreement.
Europe's leaders hoped this would allow countries to ratify the agreement quickly, however, the Republic of Ireland's attorney general ruled that it would be unconstitutional to adopt it into Irish law without a referendum.
Does the treaty depend upon the Irish vote?
No. It comes into effect whenever 12 eurozone countries ratify it.
Most will do that through votes in parliament. A number already have.
If the Republic of Ireland votes yes, what will the treaty change?
To a large extent the treaty merely enforces the rules that should have been applied within the Eurozone but have clearly been flouted by all countries.
It will enshrine in national law agreed budget targets and will require changes in taxation or spending in order to meet these targets.
A new rule will focus on reducing "structural deficits".
Hitherto, the EU rules have related to overall deficits, but in the current high debt environment it is thought the structural deficit, which is adjusted according to the economic cycle, is a better target.
That is because it allows countries' overall deficits to grow in response to the downturn, but ensures the underlying finances are put right.
For the Republic of Ireland, this will mean reducing its structural deficit to 0.5% of GDP.
Because EU rules have been ignored by so many countries, in so many ways, there are new means to enforce the treaty.
The EU Court of Justice will now be able to fine countries that do not enact the right legislation. After that, however, it's up to the countries themselves to enforce the law.
Will the treaty impose permanent austerity on the Republic of Ireland?
Ireland's huge debt hangover cannot be wished away, so the process of balancing the books is necessary regardless of the treaty.
There is some argument that the economic targets set could be too tight, but the focus on structural deficits rather than overall deficits does allow some room for flexibility.
If the Republic of Ireland votes no, what will happen?
Countries who do not implement the treaty are not entitled to EU emergency funding under the European Stability Mechanism.
The Republic of Ireland is heavily reliant on money from that fund and the International Monetary Fund (IMF).
It hopes to be able to leave that process and return to the international bond markets in 2014, but there's no guarantee that it will be ready and it might continue to need emergency funding.
The Irish government also argues that a no vote could damage the country's success in gaining international investment.
On previous occasions when Ireland has initially rejected EU treaties in referenda, another vote has taken place and the treaties have been passed.
By Jim Fitzpatrick
Economics and business editor
30.05.2012 www.bbc.co.uk |
| Criminal inquiry adds up to more problems - Greece’s understaffed new statistical agency has been struggling for months to produce high-quality figures needed by European Union and International Monetary Fund experts preparing the country’s next round of fiscal and structural reform.
A criminal investigation focused on its director, Andreas Georgiou, will only compound the problems.
Mr Georgiou, a former International Monetary Fund official, has already appeared informally before a junior financial prosecutor investigating accusations by a fellow statistician that he “betrayed the country’s interests” by inflating the 2009 budget deficit figures.
Mr Georgiou is due to attend a formal hearing next month conducted by Grigoris Peponis, the senior prosecutor for financial crime, who was appointed this year after the EU and IMF pressured the government to crack down harder on tax evasion and other economic crimes.
A second case, filed by the Athens lawyers’ union, also demands a criminal investigation on the grounds that the “inflation” of the deficit “damaged Greece’s national sovereignty and violated the constitution”.
The furore over the deficit figure highlights the embarrassment felt by conservative and socialist politicians – the government changed hands two years ago – over their responsibility for racking up a eurozone record budget deficit of 15.8 per cent of gross domestic product in 2009. That compares with an earlier figure of 13.4 per cent of GDP, less than that of Ireland, produced a few months before the Hellenic Statistical Agency, or Elstat, started operating in August 2010.
But with Greece already embarked on a harsh austerity programme, the extra 2.4 percentage points translated into further tough measures that might have otherwise have been avoided, according to one member of the lawyers’ union who declined to be named.
“The country was already in deep crisis, the head of Elstat should have put Greece’s interests ahead of an issue about numbers which is always going to be open to debate,” said the lawyer, who helped prepare the case against Mr Georgiou.
Members of the parliamentary budget committee blasted Mr Georgiou last week at a hearing to discuss a new regulation on the operation and management of the agency.
Mr Georgiou’s two deputies, who were promoted from the former state statistical service, could face similar charges. Morale at the agency has suffered with middle-level staff fearing that they could face court action for signing off on regular statistical surveys.
Mr Georgiou denies any wrongdoing. His team at Elstat has already sent almost 80 files defending the deficit figure and their methodology to the prosecutor’s office ahead of the December 12 hearing.
The accusations against him by professor Zoe Georganta, a UK-trained statistician who teaches at Greece’s University of Macedonia, were made after she was sacked along with other members of Elstat’s board by Evangelos Venizelos, the finance minister.
Prof Georganta and other board members had demanded that they should jointly approve figures on the public finances before they were sent to Eurostat, in defiance of Elstat’s new methodology and of EU practice.
By Kerin Hope in Athen 27.11.2011
www.ft.com |
| George Osborne's £5bn gamble to stave off recession - Extra £5bn of capital investment to form centrepiece of national infrastructure programme in chancellor's autumn statement
An extra £5bn of capital investment, funded by spending cuts elsewhere, will form the centrepiece of an overall £30bn national infrastructure programme due to be announced by George Osborne on Tuesday as part of an attempt to prevent the country from sliding back into recession.
The chancellor will unveil nearly 500 public sector projects, many of them to be funded by commercial pension fund investments.
Some of the £5bn extra capital investment over the next three years will go to a £600m schools programme to fund an extra 40,000 places by 2014. In what is rapidly turning into a full scale "game-changer" budget to stave off the impact of collapsing European economies, Osborne will also announce plans to:
• Help energy-intensive industries.
• Increase the bank levy to maintain an annual income from banks of £2.5bn.
• Place a cap on announced rail fare rises.
• Defer a 3p rise in fuel duty which was due to be introduced in January
• Remove health and safety bureaucracy from 1 million self-employed people as the next stage of labour market deregulation.
He is also expected to announce a deal designed to unlock £40bn of bank lending for small businesses in which the government will underwrite the lending.
The Treasury is disgorging its growth strategy before the autumn statement since it knows the day itself will be dominated by the Office for Budget Responsibility's new forecasts for growth, borrowing, unemployment and their consequences for its goal of eradicating the structural deficit by 2015-16.
Speaking on the BBC's Andrew Marr Show, Osborne admitted the OBR forecasts would be downgraded, saying: "This is an exceptionally difficult time. We have a slowing economy, a slowing world economy, we have this financial crisis brewing in Europe."
But he insisted he would stick to his deficit reduction target, saying: "I am absolutely clear the government will do what it takes to meet its fiscal mandate, to meet its debt target." He has until 2015-16 to meet this target.
With the autumn statement due to be fiscally neutral, Osborne has had to find nearly £8bn in savings to fund the additional £5bn capital investment, as well as the delay in the fuel duty rise and the higher than expected costs of benefit upratings. Some of that will come from lower than projected spending across Whitehall and higher corporate tax receipts, but he is also planning to freeze some working tax credits at the higher income end.
In an attempt to start winning the political argument on the economy, Labour plans to seize on Tuesday's higher projected public sector borrowing figures to claim the government will be borrowing to fund recession through higher welfare bills, while Labour would borrow to fund growth and ultimately higher tax receipts.
Government sources said ministers want to focus resources on protecting the "squeezed middle" and on finding job-creating capital investment in schools, roads, railways, high-speed broadband and energy projects.
The National Infrastructure Plan will draw on £5bn extra capital spending in the current spending period to 2014-15, £5bn extra spending in the following spending period and up to £20bn from a deal struck with pension funds. It will require finding guaranteed income streams for the risk-averse pension funds, such as tolls for new roads, or guaranteed income from power stations.
The government has signed a memorandum of understanding with the National Association of Pension Funds (NAPF) and the Pension Protection Fund (PPF) to develop a new pension infrastructure platform, and make it easier for pension funds to invest in projects such as renewable energy, power stations and ports.
The scheme is in some ways a substitute for Labour's Private Finance Initiative that the government has declared has provided poor value for taxpayers money.
The National Infrastructure Plan will set out 40 top priority schemes among a longer list of 500 projects.
Joanne Segars, chief executive of the NAPF, said: "We're excited by the government's commitment to try to make it easier for pension funds to back major infrastructural projects.
"This could be a real win-win. The UK desperately needs to update its infrastructure, and pension funds are looking for inflation-linked, long-term investments.
"Pension funds hold over a trillion pounds in assets, but only around 2% of that is invested in infrastructure. There's the potential for that to be much higher".
Pension fund investment in infrastructure has been pioneered in Canada, Australia and was embraced by the former business secretary Lord Mandelson in 2010.
Osborne hopes to conclude negotiations within the next three or four months.
Ministers have also responded to lobbying from energy-intensive industries about the cost of the government's climate change levy and the European emissions trading scheme. Osborne will announce a £250m package of support, which will include increasing relief from the climate change levy from 65% to 90% in April 2013 for industries that sign agreements with Whitehall to cut their use of carbon.
Osborne refused to be drawn on the latest economic and financial forecasts from the Office for Budget Responsibility, the independent body set up by the chancellor in the aftermath of the last election. However, the OBR is expected to say that the UK will grow by around 1% both this year and in 2012, down from 1.7% and 2.5% in March. Lower growth will result in higher borrowing, but Osborne insisted that sticking to the plans for budget austerity was vital in ensuring that market interest rates in the UK stayed low.
Osborne said that credit easing would involve the government underwriting commercial banks so that they could borrow more cheaply in the financial markets, with the benefits passed on to companies in the form of lower interest rates.
"The government will underwrite the loans the banks make to small businesses in order to cut the interest rates the small businesses pay," Osborne said. "We are making available £20bn for the national loan guarantee scheme; however, it sits within an envelope that could be as large as £40bn.
"These are guarantees. We are not borrowing this money; we are underwriting the loans that are being made."
It is understood that the second £20bn of loan guarantees is being held in reserve for the moment but could be made available in the next two years.
A third scheme would offer an alternative to traditional bank loans by encouraging firms to sell bonds – or company IOUs – to the market.
Patrick Wintour and Larry Elliott
guardian.co.uk, Sunday 27 November 2011
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| Germany’s CDU mulls idea of minimum wage - Germany’s ruling CDU party is considering the introduction of a nationwide minimum wage.
That may come as good news for the likes of hairdressers, one of the industries where workers complain that wages are too low.
One hair salon boss said on euronews: “There are hairdressers who have a second job if they live alone. They can’t live alone on their salary. They must have a partner who helps them financially or have parents who help them. For me it’s important that hairdressers can live on the money they earn.”
But the idea of a minimum wage is likely to cause a massive political fight.
The FDP party, which is in coalition with the CDU, is against the introduction of a minimum wage. Its secretary general quoted from the coalition agreement.
Daniel Bahr said: “We disapprove of a general minimum wage imposed by law. End of quote. This sentence is still valid for the FDP.” He says the government’s political colours should not change.
Up until now the CDU has preferred collective agreements between employers and unions. Some sectors have voluntarily struck minimum wage accords, however.
(Reuters) - German Chancellor Angela Merkel's Christian Democrats (CDU) will likely come out in favour of a mandatory minimum wage at their annual party congress in November, a CDU paper obtained by Reuters showed.
"Germany's CDU believes it is important to introduce an overall binding minimum wage into the sectors which do not have such a wage determined by collective bargaining," read the proposal for the congress. Sources said Merkel had backed it.
"The question is no longer whether we will have a minimum wage, but how to negotiate the correct level," Labour Minister Ursula von der Leyen told the Sueddeutsche Zeitung.
Germany's CDU has long opposed a blanket minimum wage determined by politicians, seen as too much political interference in wage bargaining between unions and employers.
The paper shows the CDU has come up with a compromise. The minimum wage for those sectors that do not already have one will be determined by a commission of employers and employees -- it will not be a "political minimum wage."
The level should be in line with the minimum wage already in place for part-time workers, set at 7.79 euros (£6.82) in western Germany and 6.89 euros in eastern Germany.
The opposition Social Democrats and German labour unions, which last year protested in tens of thousands against social equality ahead of the CDU's congress, welcomed the news.
"We need an legally binding minimum wage on the level of our western European neighbours, so at the minimum 8.5 euros (£7.02) per hour," the head of the Verdi union, Frank Bsirske, was quoted by German newspaper Die Welt as saying.
Verdi represents almost 600,000 workers.
Lower Saxony state premier David McAllister said his party -- the CDU -- must admit that wages can be too low in Germany.
"The question of appropriate payment is key for social fairness," he told daily Hannoversche Allgemeine Zeitung.
Europe's largest economy also raised competitiveness over the past decade partly by keeping wages low and making the labour market more flexible.
But frustration has risen among workers who feel they have not shared enough in Germany's faster-than-expected recovery.
(Reporting By Andreas Rinke and Thorsten Severin, Writing by Sarah Marsh;editing by Sofina Mirza-Reid)
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| Hustinx: Data retention is the EU's most invasive tool - Published: 26 April 2011 The EU's rules on data retention, forged to combat terrorism, are in trouble in several member states. In an interview with EurActiv Germany, the bloc's Data Protection Supervisor, Peter Hustinx, debunks European Commission claims and admits there are serious problems with "the most privacy-invasive instrument ever".
Peter Hustinx is the European Data Protection Supervisor (EDPS), an independent position set up to vet the EU's work on privacy and data protection.
He was speaking to EurActiv Germany's Daniel Tost.
The European Commission recently adopted its evaluation report on the Data Retention Directive. Has the Commission delivered sufficient proof of the necessity of such a directive, which you called for in December?
I stand by the statements I made. What we see now is that the report is definitely more balanced than drafts we have seen. It is quite clear in stating that there are a lot of problems.
As for the key question of necessity and proportionality, it seems that the Commission is taking a middle ground. It is saying data retention is valuable, many states think it is necessary but it is not proportionate as it is. This basically is code for 'there are very serious problems'.
We are going to analyse the report and the Commission will conduct an impact assessment. This is part of the preparation of the revision of the Directive. Then they will see to it that there is 'end-to-end' proportionality.
There is no proof that the Directive is necessary as it is. It seems that there are strong signs that it has an important role to play. But it needs to be revised, reduced and clarified. That's a mixed message.
I am grateful that the report with all its problems now at least is on the table so we can take a careful look.
You regard the Directive as the most privacy-invasive instrument ever adopted by the EU in terms of scale and the number of people it affects. Why is such an instrument necessary at all?
The first is still true. The Council and the Parliament felt it was necessary after the terror attacks in London and Madrid. We have to see what their position will look like now. I see some evidence that it plays an important role. At the same time I see embarrassment that this has led to such diversity in some countries - six months in some to two years in others.
So this instrument - as it was developed - does not seem to be necessary. The Commission is also going to look at an alternative: quick freeze. They speak about this as a complementary solution.
We will be seeing a much more informed debate. If in the end the conclusion is that some of this is necessary, it will be presented with many more safeguards and much more balanced than at present. I am not going to speak in favour of the Directive as it was adopted in the past. My view was negative and it still is.
The report has been received with much criticism in Germany, where it is stated that the Commission is ignoring constitutional court verdicts from Bulgaria, the Czech Republic, Cyprus, Germany and Romania…
To speak of ignoring is certainly overstated. The report describes this and deals with the constitutional complications. The German Constitutional Court has criticised the German implementation. It did not criticise the Directive. We need to be fair.
The report does not ignore this at all. It states that it is a very intrusive and very sensitive measure. The conclusion is that we now need to make sure that the Directive is revised in ways so that it can be applied in a more appropriate way. That is an important message.
You are also quoted in the report, calling on the EU to create 'legal certainty for citizens'. Is the report going in the right direction?
This is exactly the case. But if this is felt necessary then my position is that we need better safeguards, better limits, more precision, etc. The report sums up what [Home Affairs] Commissioner [Cecilia] Malmström is likely to do. I would agree with most of these things. They are absolutely necessary to fix the shortcomings.
We will be carefully analysing the proposal when it comes. It is not here yet. This is an evaluation report with quite a lot of substance. I also intend to issue an opinion on the basis of this report. We intend to react within a few weeks and help the Commission stay on track. I still think this is a very intrusive measure. It cannot be taken lightly.
The evaluation report identifies 'serious shortcomings'. Malmström spoke of the retention period being too long and the parameters in which prosecutors can get access to data of being too broad. What is your assessment of these shortcomings?
I agree with these points. They are among the big issues. Considering the retention period, there was an option and much flexibility. The report states that the member states have implemented this in widely diverse ways.
Considering the access safeguards we can benefit from the Lisbon Treaty. Before Lisbon in December 2009 there was - briefly put - a difference between the first and the third pillar of the European Union. That is now the past.
Therefore I very much welcome that if this goes forward we will have strong provisions on access and use. The Commission also mentioned who should decide on access. I agree with the shortcomings and it is urgent to fix them if this is seen as necessary.
Do you also consider EU wide harmonisation necessary?
Yes, under the same conditions. If there is an agreement on the necessity, then we do need harmonisation. This is in the interest of all parties. These are business operators who are now - plainly put - working in an environment that is very challenging.
It's also necessary from the point of view of citizens. We all move, we all use mobile phones in various countries but the rules are divergent.
Obviously it's also an interest of law enforcement. In trans border situations they are now faced with diversity and complexity. This is not good for data protection, cost or effectiveness.
Germany's Minister of Justice said it would be 'ludicrous' for Germany to have to implement the Directive seeing as it has to be revised. Is Germany steering towards infringement proceedings?
It's a complicated situation. The report reflects the fact that Germany's Constitutional Court has annulled the national law and mentions that Germany is working on this. There still is a legal obligation. I can see how the Minister of Justice is approaching this and I have some sympathy. Calling it ludicrous is a bit overstated. I do hope that it is implemented in a way that is acceptable. Perhaps Germany will wait for the next train to depart.
German criminal law experts have pointed out that data retention is not essential at all - naming the examples of the USA and Canada as well as six EU member states whose rate of solved cases is in no way less successful, even though there is no obligation of retention. Are they mistaken?
There are some relevant differences between Europe and the USA. We have legal rules, which oblige telephone operators to delete data. The Data Retention Directive is an exception to this. In the US they don't have this. This makes the two rather incomparable.
What the report also says - and this is interesting – is that most data collected by police and justice is recent data. From three months to less than six months. So the report states that retention would serve a minority of cases and only in very important ones.
We have a difficult balance to manage here: Is it acceptable to impose far-reaching retention schemes with view to a limited number of cases? Whether it makes sense in these cases needs to be analysed.
But again: My position is that this is very invasive and so we need to insist on clarity and safeguards to make it acceptable.
You mentioned quick freeze. The German Data Protection Supervisor stated that Commissioner Reding supports his so-called quick-freeze-plus as an alternative to data retention..
The Commission is going to consider this and see to what extent it can be additional to or replace data retention.
What is your impression as to what is preferred?
The report is quite fair concerning the pros and cons. It's right as that quick freeze by nature has a starting point and is future-oriented. You need to target. This will not cover things that have happened in the past, the need of which arises at a later stage. The question is then again: is it necessary for these cases to provide such a far-reaching measure?
It's now all on the table and there is no doubt that there will be a very heated debate. I hope that this leads to a better proposal in the future, which we can then discuss as to the extent of which it is necessary.
Considering PNR, a majority of EU member states are rallying behind a UK-led campaign to extend a proposal on collecting air passenger data to people travelling within Europe. Is this in line with EU laws on free movement?
This is a quite recent piece of news. The Council is in the middle of the discussion. It may well be that a majority would like to extend the scope. This does not change the nature of the measure. EU PNR is also quite problematic. It is a standard collection of data to monitor, to screen and to evaluate all passengers.
If we keep this limited to traffic to third countries it is still a big thing. If we are going to extend it to intra-EU flights, it makes it worse.
All points made before apply here as well. It is crucial that we are clear as to why we would need to do this.
But it's too early to draw conclusions. Those who are skeptical should by all means speak up and feed the discussion in the Council. The Parliament is co-deciding and we are in the middle of the debate.
ww.euroactiv.sk |
| Euro turns to problem for Eastern Europe - By KAREL JANICEK and GEORGE JAHN
Associated Press
BRATISLAVA, Slovakia (AP) -- Bells pealed and fireworks shot across midnight skies in Bratislava two years ago, as Slovaks celebrated not only the New Year but also their country's long-sought entry to the club of nations using the continent's common currency, the euro.
Fast forward to the dying days of 2010 - after the eurozone's debt crisis forced the bailouts of Greece and Ireland and painful austerity measures across the region- and one thing is clear: while Slovaks will again turn out in droves on Dec. 31, the cheer will have nothing to do with belonging to the euro.
The pride felt back then at being the first in the former Soviet bloc to adopt the euro has been tempered by the responsibilities that come with sharing a common European currency.
Two years ago, the euro was viewed as a safe haven of financial stability, insurance against wild swings of national currencies that could throw national budgets out of kilter and threaten economic growth. For Slovakia, it also signaled arrival into the prosperous club of EU nations less than two decades after the fall of the Iron Curtain.
Now, as eurozone nations are asked to help bail out others overwhelmed by debt and the risk of contagion spreads beyond Ireland and Greece, adopting the common currency is no longer a top priority for former communist countries still outside the zone. And in newcomer countries, like Slovakia, some now see the euro as a burden, not a blessing.
"It seems that they allowed us to enter only to pay for their debts," said Petra Hargasova, a 22-year old economics student, her hands cupped around a glass of mulled wine to fight the chill while taking in a Bratislava Christmas market.
Some in the Slovak leadership are even looking for a way out.
In a recent commentary in the Hospodarske Noviny business daily, Parliament speaker Richard Sulik sent ripples across the already edgy eurozone by arguing that Slovakia should be ready to abandon the euro and switch to its former national currency.
The Finance Ministry was quick to dismiss his remarks and experts note that the quick fix proposed by Sulik would likely backfire. Economist Nicolas Veron of the Brussels-based think-tank Bruegel says that leaving the eurozone "would be economically disruptive" for the nation.
On the plus side, dropping the euro would allow a nation like Slovakia to devalue its national currency. That would help it boost its trade competitiveness against eurozone nations wrestling with the costs of the bailout and tightening their own belts.
At the same time investors are likely to punish defectors, pulling out in fear that their euro-denominated assets will be converted and devalued, to the point of possible financial collapse for the nation involved.
But anti-euro sentiment remains strong in a country that defied its partners earlier this year by refusing to provide its euro800 million ($1.05 billion) share of the euro110 billion ($145 billion) EU bailout loan for Greece.
"Everyone with common sense can see that the system is ill," said Matus Posvanc, an analyst from the F. A. Hayek Foundation, a conservative think tank in Bratislava. He called attempts to bail out Athens futile "because Greece's bankruptcy is inevitable."
With euro-skepticism extending into the top levels of government, Slovakia is among the most vocal of nations pressing for new rules that would force private investors, not only taxpayers, to pay their share. Under discussion is a so-called European Stability Mechanism, which would force private creditors to do just that by allotting them a share of the bailout burden if a nation is deemed insolvent.
In refusing to pay its share of the Greek bailout package, "our main objection was ... that it was only the taxpayers who have to pay," Slovak Finance Minister Ivan Miklos told The Associated Press. "But the banks, which contributed to the problem and made profit by providing loans to problematic countries in the past, didn't have to pay a single cent."
"To maintain such practice means to repeat the previous mistakes," he said.
Miklos argued that the current rules undermine a trust of people in the free market economy.
"The profits are privatized but the losses are socialized," Miklos said. "When it works, a few make money, but when it collapses because they take too big a risk, we all have to pay. That's a huge problem."
Nigel Rendell, an economist at RBC Capital Markets in London, said Slovak concerns were understandable.
"Slovakia worked incredibly hard to gain membership of the euro," he said. "Now they find themselves having to dip into their own pockets to finance foreign governments that spent too much and should have known better."
Other newcomers are also having doubts, while outsiders are suddenly in no hurry to join the euro club, which Rendell says is no longer seen "as a final seal of approval for completing the transition from command to market economy."
"Timetables for membership right across the region are being pushed back, perhaps even delayed forever," he said.
Recent developments seem to back that view.
Although Slovene Prime Minister Borut Pahor has defended his country's loan guarantees for Ireland, a recent survey by the prominent polling agency Mediana indicated 67 percent of citizens were opposed.
While the Polish government has suggested 2015 as a target date, it's lagging commitment to meeting necessary criteria may speak louder than words. At a forecast 7.9 percent of gross domestic product this year, Poland's budget deficit - like those of some other former Soviet bloc nations - remains notably above the 3 percent benchmark needed for eurozone entry.
Polish skepticism of euro adoption has been growing since the country did relatively well during the global economic downturn while still using its currency, the zloty. In 2009, Poland's economy grew 1.7 percent, making it the only EU country to avoid recession.
The governor of Poland's central bank, Marek Belka, voiced the country's anxieties when he said earlier this month that Poland should not rush to adopt the euro until the EU reforms its institutions to support a stable common currency. He called European monetary union "an ambitious but unfinished project."
Monika Kurtek, an economist with the BPH Bank in Warsaw, said she believed the 2015 date was not a real goal and that in any case Poland will not be ready by then.
"Our government does not want to point to a concrete date," she says. "They are speaking about 2015 but it is not even a forecast."
Euro outsiders can now devalue their currencies against their eurozone partners and - like the Polish zloty - the weaker Czech koruna has helped Prague's export sector during the financial crisis gripping the eurozone.
The Czech Republic is yet to set a target date to join the euro, which President Vaclav Klaus has repeatedly described as a failure.
He scoffed last month - when visiting German President Christian Wulff called the joint currency a "success story" - that neither the government, parliament nor the Czech central bank were ready to push to join the eurozone in the foreseeable future. Czech Prime Minister Petr Necas said that adapting the euro now "would be economic and political foolishness."
Despite the chorus of disapproval, Estonia is bucking the trend and will become the 17th member of the eurozone on Jan 1. Finance Minister Jurgen Ligi recently said his country was willing to pitch in financially "to keep the eurozone stable and the European Union healthy."
But ordinary Estonians are dubious and wonder what they may be getting into as daily headlines trace the downfall of once-thriving economies like Ireland.
Just 54 percent of Estonians currently support eurozone entry, according to a November poll by the Faktum & Ariko polling organization.
As for Slovakia, Miklos, the finance minister, says his country still benefits from the euro, pointing to projected economic growth of 4.1 percent in 2010 - the eurozone's highest.
But he said Slovakia and all other euro nations must apply strict fiscal policies, reduce deficits and carry out necessary reforms to remain credible for the markets.
"It turned out the risk of (the euro's) sustainability is higher than we had expected," he said.
30.12.2010 |
| European corner - David Cameron is preparing to retreat on pledges to cut the European Union budget and accept a deal that would increase British taxpayers’ contribution by at least £435 milliond, state Telegraph.co.uk this morning.
Great Britain's Prime Minister last week promised to fight plans to increase the European Commission’s budget by 5.9 per cent and said its 2011 budget should be frozen or cut.
Last night, however, British sources conceded that the £107 billion EU budget will rise by at least £3.15 billion in 2011, with Britain’s share set to grow by £435 million.
The budget deal, to be discussed at a Brussels summit on Thursday, 28th of October, is likely to trigger protests from many Conservative MPs, who want a cut in Britain’s payments to Europe.
The European Parliament has angered voters and EU leaders by demanding a 5.9 per cent rise in the European Commission budget for 2011.
Mr Cameron said at the weekend he would fight that plan and insisted that the 2011 budget deal “should be a freeze or a cut.”
But British sources last night conceded that the UK is bound by an agreement with other EU leaders for the budget to rise by at least 2.9 per cent.
“We cannot get anything less than 2.9 per cent. Of course we’re not happy about that, but there’s nothing we can do,” said a Government source.
The stark warnings raised suspicions that Downing Street was trying to downplay expectations over the budget, and no formal agreement is expected until next month.
Mr Cameron’s last hope of blocking the budget increase lies in a deal with France and Germany at this week’s summit.
British officials said that Angela Merkel of Germany and Nicolas Sarkozy of France may yet be persuaded to back Mr Cameron in seeking a budget increase of less than 2.9 per cent.
Diplomats said Mr Cameron is in a powerful bargaining position because of Franco-German plans to rewrite the EU’s rules to support the struggling Eurozone.
Changing EU treaties to allow a new bailout mechanism for Euro countries would require British consent. Minister for Europe David Liddington said the Prime Minister would be concentrating on trying to persuade fellow leaders of the importance of the budget issue.
Mr Liddington told BBC Radio 4's Today programme: "What he's going to be focusing on is saying that whether it's 2011 or the more important long-term deal over the European budget, this is really something that deserves the highest priority among the leaders of all member states."
Peter Lilley, a former Cabinet minister, said that the talks on changing the treaties gave Mr Cameron an “ideal opportunity” demand a high price for British support.
In the Commons, he challenged ministers to promise that “support will not be given without obtaining concessions in return, that we will not give that support without demanding a price”.
Mr Cameron spoke to Mrs Merkel and Mr Sarkozy by telephone on Wednesday, 27th of October.
Government sources said that Mr Cameron will only agree to the Franco-German plan for new EU rules in exchange for support over the EU budget.
As well the 2011 budget, EU leaders are about to begin wider talks on the budget for 2014-20, where Britain’s £3 billion annual rebate will come under pressure.
In a move that is likely to inflame the debate over the EU budget, Baroness Ashton, Europe’s foreign minister, yesterday announced that she would be renting new Brussels offices at a cost of £10.5 million a year to house her new European diplomatic corps from next spring.
27.11.2010 www.maltastar.com |
| Montenegro is a potential candidate for membership to the EU - 10.11.2010 EU
Montenegro is a potential candidate for membership to the EU. Its European perspective was reaffirmed by the Council in June 2006 after the recognition of the country's independence by EU member states. On 15 October 2007 Montenegro signed the Stabilization and Association Agreement (SAA) and an Interim Agreement on trade and trade-related issues . The latter entered into force on 1 January 2008. Montenegro has profited from EU autonomous trade measures since 2000. As from 1 January 2008 access of Montenegrin products to the EU was expanded and EU exports to Montenegro have been granted trade preferences following the entry into force of the Interim Agreement. In 2009, notwithstanding the negative impact of the international crisis, integration with the EU remained high. The main source of export revenues are tourism and metal industry. The EU is the main trading partner of the country, and also with reference to foreign direct investments, which in 2009 represent 44.2% of GDP, EU27 accounted for almost 80% of total inflows.
A European partnership with Montenegro was adopted by the Council on 22 January 2007. The Montenegrin government adopted an action plan for its implementation on 17 May 2007. Agreements between the EU and Montenegro on Visa Facilitation and Readmission entered into force on 1 January 2008. On 30 November 2009 the Council decided to lift visa requirements for the citizens of Montenegro (along with citizens Serbia and the former Yugoslav Republic of Macedonia) with effect from 19 December 2009.
Following ratification by all EU member states and Montenegro the SAA entered into force on 1 May 2010.
Montenegro submitted its application for EU membership on 15 December 2008. On 23 April 2009 the Council asked the Commission to prepare an Opinion on the country's application. The Commission adopted its Opinion on 9 November 2010.
This Opinion covers all aspects of the accession criteria, political, economic and relating to Montenegro's capacity to implement EU law, building on the December 2006 European Council conclusions on a renewed consensus for EU enlargement, and based on rigorous and fair conditionality and the 'own merits' principle.
The Commission considers that negotiations for accession to the European Union should be opened with Montenegro once the country has achieved the necessary degree of compliance with the membership criteria. In this regard, the country needs to meet in particular a number of key priorities. In the light of the progress made so far, the Commission recommends that the Council should grant Montenegro the status of candidate country.
Key dates in Montenegro's path towards the EU:
9 November 2010 - adoption of the Commission Opinion on Montenegro's application for membership of the European Union
1 May 2010 - Entry into force of the Stabilisation and Association Agreement (SAA)
19 December 2009 – Montenegro achieves visa liberalisation with the EU.
9 December 2009 - Prime Minister Djukanovic delivers to Commissioner Rehn Montenegro's replies to the Commission's Questionnaire in Brussels.
22 July 2009 - Commissioner Rehn hands over the Commission's Questionnaire to Prime Minister Djukanovic in Podgorica
23 April 2009 - The Council invites the Commission to submit its opinion on Montenegro's application.
15 December 2008 - Montenegro submits its application for EU membership
27 May 2008 - European Commission presents roadmap setting out a number of benchmarks for visa liberalisation with Montenegro
21 February 2008 - Visa liberalisation dialogue launched
1 January 2008 - Interim Agreement on Trade and Trade-related issues and Visa facilitation and readmission agreements enter into force
15 November 2007 - The Framework Agreement of the Instrument of pre-Accession Assistance is signed between the Government of Montenegro and the EC
1 November 2007- The European Commission Delegation in Podgorica starts to function.
19 October 2007- The Parliament of Montenegro adopts by 2/3 majority the Constitution which was proclaimed officially on 22 October.
15 October 2007- The Stabilisation and Association Agreement (SAA) is signed in Luxembourg
18 September 2007- Visa facilitation and readmission agreements with the EU signed
15 March 2007 - The Stabilisation and Association Agreement (SAA) is initialled in Podgorica
22 January 2007 - The Council adopts a European Partnership for Montenegro.
26 September 2006 - SAA negotiations with Montenegro are launched: First Official Round and First technical Round.
10 September 2006 - Montenegro parliamentary elections.
24 July 2006 - The EU Council adopts a negotiating mandate for a Stabilisation and Association Agreement (SAA) with Montenegro.
12 June 2006 - The EU Council declares the will to develop further the relations with Montenegro as a sovereign, independent state. Bilateral recognitions by Member States follow.
3 June 2006 - The Montenegrin Parliament declares independence.
21 May 2006 - A referendum on independence results by the vote of a majority of Montenegrin voters (55.5%) to the independence of Montenegro.
3 May 2006 - Negotiations with Serbia and Montenegro are interrupted due to failure of the Serbian government to fulfil ICTY-related conditionality.
October 2005 - Launching of the negotiations for a Stabilization and Association Agreement between the EU and Serbia and Montenegro. Negotiations take place on the basis of the twin-track approach.
July 2003 - Enhanced Permanent Dialogue between the EU and the State Union of Serbia and Montenegro is launched.
June 2003 - At the Thessaloniki European Council, the EU perspective for the countries of the Western Balkans is confirmed.
March 2002 - Signature of the Belgrade Agreement on a restructured State Union comprising Serbia and Montenegro.
2001 - The Community Assistance for Reconstruction, Development and Stabilisation (CARDS) programme is launched.
November 2000 - Zagreb Summit launches the Stabilisation and Association Process (SAP) for five countries of South-Eastern Europe.
November 2000 - "Framework Agreement Federal Republic of Yugoslavia-EU for the provision of Assistance and Support by the EU to the Federal Republic of Yugoslavia". Montenegro benefits from Autonomous Trade Preferences from the EU.
1997 - Regional Approach. The EU Council of Ministers establishes political and economic conditionality for the development of bilateral relations with the Western Balkans countries.
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| Drugmaker Novo Nordisk rejects Greek price cut - 2010-05-31 14:26 (UTC)
By Anna Ringstrom
COPENHAGEN, May 31 (Reuters) - Novo Nordisk, the world's biggest diabetes care firm, has pulled some of its insulin drugs off the Greek market in response to an Athens order for drugmakers to slash their prices, saying it fears such cuts could spread to larger markets.
Novo's chief executive said the Greek government's order to cut prices by 25 percent was 'unacceptable'.
Drug prices are in the firing line as European governments seek to tackle runaway budget deficits and Greece has ordered the steepest price cuts, leading drugmakers to worry they could be forced into making similar reductions in other markets.
Novo Nordisk is the first drugmaker to pull drugs off the Greek market due to pricing in the current debt crisis but was quickly followed by Danish dermatology and critical care drugmaker LEO Pharma, which said it also would withdraw some products from Greece.
Novo Chief Executive Officer Lars Rebien Sorensen said he is in talks with the Greek government, which has ordered a 25 percent cut in the price of the Danish firm's insulins.
'What they propose right now is not acceptable,' he said.
'It will have a rub-off effect on the European price level and it has an effect on other markets outside Europe where the Greek prices are used as a reference price in negotiations with governments,' Sorensen told Reuters.
The company has informed the Greek government that it will not lower the prices of its most recent insulin products, so-called modern insulins, and insulin products for use with pen injection systems.
As a result wholesalers have stopped ordering these products as they would have to sell them at a loss, Novo said.
Sorensen said Novo's modern insulins would run short in Greece within a few weeks.
Legal counsel for the Hellenic Association of Pharmaceutical Companies, which represents local and international manufacturers, had warned that Greece's drastic price cuts could lead to a shortage of medicines.
A spokesman for AstraZeneca said the Anglo-Swedish drugmaker had no plans to withdraw medicines from Greece but was concerned about the cuts, which it said appeared to contravene Greek law. 'We are working through the industry association to engage with the Greek government in an effort to reverse this latest policy,' the spokesman said.
Novo spokesman Mike Rulis said in an email statement a 25 percent price cut did not allow Novo to run a sustainable business in Greece, a relatively small market for the company.
Such a cut also would bring prices in Greece 'way below what other European countries are paying,' Rulis added.
Novo will continue supplying human insulin products at the reduced prices set by the Greek government to ensure people with diabetes are not without access to insulin treatment.
Shares in Novo were down 0.4 percent at 465.70 Danish crowns at 1408 GMT, when the Stoxx 600 European healthcare index was up 0.6 percent.
'As prices in Greece are used as reference prices by other countries both inside and outside Europe, this reduction in Greece would trigger similar reductions in these countries, which would have serious financial consequences,' Rulis said.
This view was echoed by privately held LEO Pharma, which said in a statement the planned price cuts would have severe consequences for its business including investments in research and development.
'Since the Greek prices on our products are reference points for prices in a number of European countries, we risk that prices in for example Spain, Portugal, Italy, Romania, Turkey, Czech, Hungary ... will also be subject to severe reductions if we do not act,' Leo said.
Germany and Spain have announced plans to reduce drug prices as well, and cuts are also expected in Portugal and Italy.
Sorensen said Greece is the only market from which Novo has decided to withdraw its modern insulins due to the price cuts, but he did not rule out similar moves in other countries.
He said he did not expect a significant earnings effect for Novo this year from price reforms in Europe, echoing Chief Financial Officer Jesper Brandgaard who said last week he was more concerned by longer-term implications for the overall price levels in Europe.
(Additional reporting by Kate Kelland and Ben Hirschler in London, John Acher; Editing by Hans Peters, Greg Mahlich) Keywords: NOVONORDISK GREECE/
(anna.ringstrom@reuters.com; +45 33 96 96 49, Reuters Messaging: anna.ringstrom.reuters.com@reuters.net)
www.xc.com |
| Jacqui Smith’s departure will destabilise Gordon Brown - By Mary Riddell
Published: 2:29PM BST 02 Jun 2009
The exit of Jacqui Smith is both the most and the least astonishing move in the political chess game. Everyone knew, or thought they knew, that she would be sacked as Home Secretary in the forthcoming reshuffle.
But today’s reports that she was going stunned Westminster colleagues and, it seems, Gordon Brown himself. Stories of her demise have circulated for weeks, but the apparent confirmation did not, according to No 10 sources, emanate from Miss Smith.
One source close to Mr Brown likens what is happening to a “game of Whack em All”, in which players are swept off the board by media rumours that No 10 is unwilling or unable to counter.
Miss Smith’s departure has seemed certain ever since her expense claims became among the first to be leaked. Among the most damaging revelations were her supposed claim for a bathplug and the news that her husband, whom she employs, had claimed for two pornographic films.
Even when those stories surfaced, Gordon Brown was loath to withdraw his support for a Home Secretary whose career he had promoted and fostered. As one of Mr Brown’s closest associates told me: “GB has a lot of experience of being beaten up. Jacqui hasn’t, but now it’s her turn to take a beating. That’s what we do to Home Secretaries – apart from John Reid.”
Miss Smith was not, however, hired for her fragility. Mr Brown appointed her, in part, as a counterweight to Jack Straw, seen as a more liberal force at the Justice Ministry. There has been considerable friction between the two departments, not least over constitutional reform.
A green paper on Rights and Responsibilities underwent numerous revisions before being finally published in May. Its supporters say it was stalled by Home Office officials and, in Cabinet, by Miss Smith. Her toughness on crime was bolstered by Louise Casey, Tony Blair’s controversial antisocial behaviour ‘tsar’, who was brought back to work alongside her at the Home Office.
For Mr Brown to lose one of his most favoured ministers, at a moment not of his choosing, is a double blow. He is certain that she did not jump ship early to embarrass him, but critics will seek to exploit what looks like another weakness on his part, especially on a day when other senior figures, such as Patricia Hewitt, and Beverley Hughes, the children’s minister, announced that they were standing down at the next election.
Miss Smith, at least for now, is saying that she will defend her narrow majority in Redditch. In the current turmoil, it is unclear who will succeed her at the Home Office.
Alistair Darling may be too damaged. David Blunkett, though less abrasive than when he formerly held the post, would risk looking like yesterday’s man. Mr Blunkett has, however, has become close to Mr Brown, dining with the PM at Chequers in a convivial evening.
However Mr Brown now shuffles his pack, filling one of the great posts of government will now risk looking more like a desperate measure than a considered strategy.
2.06.2009 www.telegraph.co.uk |
| EU humanitarian aid - large-scale, low-profile - Every year, the EU's rapid aid response helps over 18m people deal with the fall-out of conflicts, natural disasters and freak weather.
"It was evening and you could hear the fighting. A man with a gun came and told us we had to leave." Shamiana, a girl from Qarabagh, 30 km from Kabul in Afghanistan, had to flee the village with her family. They walked for several days before reaching a refugee camp in Pakistan.
In the camp, workers from ECHO , the EU's humanitarian aid office, assessed the refugees' most urgent needs to make sure aid was used to greatest effect. They saw to it that the refugees had food, shelter, medical attention, drinking water and pyschological support - and made sure that families were kept together.
When a crisis breaks, ECHO must mount a rapid reponse - witness the €4m in aid already released to help the 250 000 people displaced by the fighting in the Democratic Republic of Congo.
This year, the EU has allocated over €700m to humanitarian aid – more than any other donor. For reasons of neutrality and effectiveness, ECHO doesn't intervene directly but funds local initiatives through partner organisations – a low-key approach that doesn't often make the headlines.
Four years on, Shamiana and her family are back in their village. They returned to find their house destroyed and the surrounding fields riddled with landmines. But they have received food aid from the EU, which has also provided funds for them to rebuild their house and paid for mine clearance.
As soldiers become more involved in delivering humanitarian aid, aid workers are not always seen as neutral in conflict situations and increasingly come under attack.
That doesn't deter Isabelle D'Haudt, who works for ECHO in Kabul. "It just makes what we are doing seem all the more relevant. We are there to make a well-focussed short-term impact - quickly. And we can't afford to get it wrong."
As well as giving humanitarian aid, the EU is working to reduce poverty through its development work - the focus of the European development days to be held on 15-17 November in Strasbourg.
www.ec.europa.eu |
| 10th CEI Summit Economic Forum (SEF) - Dear Participant,
It is my great pleasure to invite you to the 10th CEI Summit Economic Forum (SEF) "Mobilising resources for a common future", which will take place in Sofia on 20-21 November 2007 under the 2007 Bulgarian Presidency of the Central European Initiative (CEI).
This year two major regional events - the CEI Summit Economic Forum and the South-East Europe Forum - will join their efforts to provide a single platform for forward-looking discussion on the future business opportunities in the countries of operation of the CEI. The event, which will take place alongside the Roundtable of Economic Ministers of the 18 CEI member countries, precedes the annual CEI Summit of Heads of Government.
This year, the SEF 2007 will offer you the opportunity to exchange your views with high level speakers from the business community, governments, IFIs and international organisations on the most topical issues affecting region.
Special discussions will take place on energy infrastructure, energy efficiency, and credit lines for the residential sector; on the development of regional railway networks to support freight transport; on technical cooperation needs in the region and how international organisations can respond to those in partnership with donor governments; on SMEs, capacity building and IST.
Bulgaria will be at the centre of the show with a dedicated opening session on business opportunities in the country. Over 1000 participants are expected this year. It is thanks to them that the SEF has become one of the most successful initiatives in the region.
I hope you will share this success with us, and look forward to meeting you in Sofia in November.
Best regards,
Petar Dimitrov
Minister of Economy and Energy
of the Republic of Bulgaria
For programme details please visit www.ceinet.org/SEF/Programme.
For registration and information please visit www.ceinet.org/SEF or contact the CEI Project Secretariat
(Tel. +39 040 77 86 739, Fax +39 040 77 86 766, email: info.sef@cei-es.org).
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| Bratislava airport - Bratislava airport wants to start the reconstruction and further construction of its existing terminal in May 2007 to in-crease capacity. The reconstruction is also connected to the need to fulfill a requirement stemming from the EU’s Schengen treaties as of October 2007, which concerns a different way of handling passengers from Schengen and non-Schengen member states. The completion of the project is expected at the break of 2008-09.
From June 2005 to May 2006 the airport transported over 1.6m passengers. At the end of 2006, it will approach a 2m limit per year.
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| E. Kukan will take part in the informal meeting of ministers of foreign affairs of the EU member states on 27 May 2006 - The Minister of Foreign Affairs of the Slovak Republic Eduard Kukan will take part in the informal meeting of ministers of foreign affairs of the EU member and accessing states in Klosterneuburg near Vienna on 27 May 2006.
The Austrian Presidency in the EU organises the meeting in order to define the direction of the future development of the European Union and to bring European project closer to EU citizens. The main subjects of the meeting are transparency of the legislative process in the EU, the constitutional process, subsidiarity and the enlargement of the EU. The preparation of the EU summit in June, which will target on the evaluation of the reflection period, will also be one of the main topics of the reunion. |
| Tender third mobile operator in SR - A tender to select the third mobile op-erator in Slovakia will be called by the end of June, confirmed the telecoms office TU. The length of the tender itself will depend on the number and quality of bids.
19.05.2006 |
| Island will open its labor market for Slovaks. - As of May 1 Island will open its labor market for Slovaks, who will then be able to work there without limitations. As of May 1, Finland, Spain, and Portugal should also open their labor markets. France will open the market only for selected professions. The states that were among the first to cancel all labor limitations include Ireland, Sweden, and Great Britain. Germany and Austria want to uphold the limitations until 2009. |
| Onte Ltd. Orechová - Onte Ltd. Orechova recently started trial production with 15 employees in a veneer production plant. Within a year the company should create 60 jobs.
A Spanish businessman is investing around Sk 180m in Orechova. The opera-tion plans to process 12,000 m3 of beech and oak wood per year.
5.04.2006 |
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Address : Euro-Brew Ltd., Hlboká 22, 917 01 Trnava, Slovakia
Tel. : +421 33 53 418 53, Fax : +421 33 53 418 52, E-mail : info@eurobrew.sk |
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