Schulz stands up for one seat

February 17, 2012 5:30 pm by Stanley Pignal

The long-running campaign to scrap the European parliament’s once-a-month commute to Strasbourg bagged a sizeable ally this week: none other than the chamber’s new president, Martin Schulz.

While much of the attention in recent days has been on Greece, the parliament has been on the road again, leaving its usual Brussels residence for its second home near the French-German border.

The two-seat arrangement is estimated by critics to cost €200m a year, a public-relations disaster for the legislative arm of an institution which is imposing austerity across much of the continent.

Schulz has always been rumoured to be an anti-Strasbourger. But he has thus far remained closeted, presumably to avoid ruffling French feathers ahead his ascension to the presidency last month. Paris is very eager to keep the parliament on its home turf, if only once a month.

Continue reading: “Schulz stands up for one seat”

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Posted in EU, EU Parliament |

More on leaked Greek debt deal documents

February 15, 2012 3:37 pm by Peter Spiegel

Lead negotiators for Greek bondholders, Charles Dallara and Jean Lemierre, outside the Greek prime minister's office last month.

This morning, the dead tree edition of the FT has a story based on some leaked documents we got our hands on regarding the massive Greek debt restructuring that needs to begin in a matter of days.

The documents make clear the schedule is slipping dangerously; the meeting of eurozone finance ministers tonight that has been cancelled was supposed to approve the launch of the restructuring so the process can begin Friday. The whole thing needs to be done before a €14.5bn Greek bond comes due for repayment March 20. Time is running out.

But perhaps more interestingly is the fact that eurozone finance ministries asked for financial advice from New York financial advisors Lazard and legal advice from the New York firm of Cleary Gottlieb Steen & Hamilton about what the consequences would be if they launched the debt restructuring – but were forced to scrap it after it had started.

As is our tradition, we thought we’d give Brussels Blog readers a bit more on what the documents had to say.

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Posted in EU, Euro, Fiscal policy |

[UPDATED] On Greece, a commission cacophony

February 7, 2012 10:57 am by Peter Spiegel

Dutch EU Commissioner Neelie Kroes: "No ‘man overboard’ if we lose someone from eurozone."

[UPDATE 2] Dutch finance minister Jan Kees de Jager was asked about Kroes’ comments during the government’s regular parliamentary question time Tuesday. De Jager said that while the contagion risk in the eurozone has decreased over the last year because of measures taken in Brussels, a Greek exit would still be very costly.

[UPDATE] In response to Kroes’ comments, Olivier Bailly, an EU Commission spokesman, today insisted its policy towards keeping Greece in the euro has not changed.

José Manuel Barroso, the European Commission president, may have promoted his economic chief Olli Rehn to vice president last year with new responsibilities for managing the eurozone crisis, but in recent days a growing number of other commissioners seem to be elbowing in, opining on whether Greece will leave the single currency.

On Monday came an interview with Greece’s own commissioner, Maria Damanaki, where she told the newspaper To Vima tis Kyriakis that contingency plans for Greece leaving the euro were being “openly studied”. “Now they’re not simply scenarios,” said Damanaki, whose portfolio is fisheries. “They are alternative plans that are being openly studied.” Rehn’s spokesman insisted that no such plans were afoot within the commission, although he acknowledged some in the private sector were making such calculations.

This morning, however, comes another broadside, this time from Neelie Kroes, the European commissioner from the Netherlands – one of the eurozone’s remaining triple A-rated countries where support for more aid to Greece is dwindling.

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Posted in EU, EU Commission, Euro |

Merkel, Barnier and the doomed DB-NYSE merger

February 3, 2012 4:42 pm by Alex Barker

Angela Merkel and José Manuel Barroso talk on the sidelines of Monday's EU summit.

The Deutsche Börse and NYSE Euronext exchange mega-merger is dead, the objections of competition officials prevailed, but it followed a tremendous political tussle in Brussels, full of intrigue and skulduggery. Here are some of the snippets from the final days:

The Merkel change of heart: A great mystery in this merger case was the deafening silence from Berlin. Angela Merkel, the German chancellor, was always said to be on the verge of intervening on behalf of the German exchange. But opportunities to say something came and went. Her reluctance was put down to coalition divisions and a complicated political picture in Hessen, the home state of DB.

But in the final days, Merkel did have her say, at least in private.

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Posted in EU Commission |

Greece viewer’s guide: What are we waiting for?

February 3, 2012 1:38 pm by Peter Spiegel

Greek government employees protest against austerity measures in Athens on Friday.

As the week comes to an end, we seem no closer to a deal to sort out Greece’s troubles than we were when it started. With rumours of a deal a daily (hourly?) occurrence, and questions over whether eurozone finance ministers will meet Monday to sign off on a new €130bn bail-out, Brussels Blog thought we’d revive our popular “viewer’s guide to the Greek crisis” to lay out the state of play for those not following the negotiations on an hourly basis.

The best way to think of what is currently happening in Greece is to look at it as the proverbial row of dominoes that must fall before a deal is complete. Unless they all fall in order, Athens is at risk of missing payment on a €14.5bn bond due March 20, which could lead to a messy default and renewed chaos across the eurozone.

The first domino has basically been complete since last weekend: a deal with private holders of Greek bonds to wipe off €100bn from Athens’ €350bn debt load.

As we reported on Monday, a consortium of private Greek debt holders has agreed to accept new bonds that are be worth half the face value of their current bonds (including a one-time cash payment). The new bonds would have low interest rates that would reduce their value even more. According to our sources, the “haircut” in the long-term value will be just over 70 per cent.

But there are two more dominoes that must still fall: Greece must (yet again) agree to new austerity measures being urged by the “troika” of international lenders –European Commission, European Central Bank and International Monetary Fund – and then Brussels must decide on how to fund any shortfall.

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Posted in Euro, Fiscal policy |

Who’s the highest-profile European Commissioner?

February 2, 2012 5:24 pm by Peter Spiegel

Finn Olli Rehn, last week in Davos, has been seen on Finnish media by 45% of his fellow countrymen.

In Brussels, being a member of the European Commission, the EU’s executive branch, is about as high as an official can climb in the eurocracy. But just how well are those Brussels luminaries known back in their home countries?

Thanks to the commission itself, we now have a good idea. According to a telephone survey conducted by Eurobarometer – the results of which haven’t been published, but were presented to commissioners during a meeting Tuesday – the best-known is Finland’s Olli Rehn, the economic commissioner who has been in the press almost constantly thanks to the eurozone crisis. He also contemplated running for president of Finland last year, which undoubtedly helped boost his score.

According to the survey, obtained by Brussels Blog, 45 per cent of Finns said they had seen or heard Rehn in the media, far ahead of the rest of the commission – including its president, Portugal’s José Manuel Barroso, who finished 9th with 31 per cent of Portuguese respondents saying they’ve seen the former prime minister on local media.

At the bottom of the list were commissioners from two of the largest member states: France’s Michel Barnier, who only 8 per cent of French respondents said they had heard or seen, and Britain’s Cathy Ashton, who came in at 16 per cent.

The complete list after the jump.

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Posted in EU, EU Commission |

The EU gas crisis that wasn’t

February 2, 2012 4:25 pm by Joshua Chaffin

When word filtered out on Tuesday that Russia’s Gazprom would be capping its gas shipments to the European Union, a shiver went through an unusually frigid Brussels.

After two major supply cuts in the last ten years – the most recent in 2009 – European policymakers have become conditioned to believe that any interruption in Russian gas may be the beginning of another full-blown crisis instigated by the Kremlin.

Gazprom said it was going to have to limit European sales in order to serve the needs of domestic consumers struggling through a cold winter. Fears appeared to subside a bit, though, when the company promised to try to make up the difference over the coming days.

Perhaps the most surprising thing about the incident is how quickly it has become a non-event. The reason, according to EU officials, is that the continent learned the lessons from the last gas crisis and has worked to make itself far less vulnerable to future Russian shocks.

Continue reading: “The EU gas crisis that wasn’t”

Posted in Energy, EU, EU Commission |

Is Portugal really the next Greece?

February 1, 2012 12:39 pm by Peter Spiegel

Portuguese prime minister Pedro Passos Coelho arriving at Monday's EU summit in Brussels

As financial markets watch with nervous anticipation the outcome of the tense negotiations over Greece’s debt restructuring, there is clear evidence that bond investors believe Portugal could be next, despite repeated insistence by European leaders that Greece is “an exceptional and unique case” – a stance reiterated at Monday’s summit.

Portugal’s benchmark 10-year bonds were over 17.3 per cent this week, though things have eased off a bit today. Those are levels seen only by Greece and are a sign the markets don’t believe Lisbon will be able to return to the private markets when its bailout ends next year. Default, the thinking goes, then becomes inevitable.

But are Greece and Portugal really comparable? Portugal certainly shares more problems with Greece (slow growth, uncompetitive economy) than with Ireland and Spain (housing bubbles, bank collapses). But unlike Greece, where talk of an inevitable default was the topic of whispered gossip in Brussels’ corridors from almost the moment of its first €110bn bailout, there is no such buzz about Portugal.

More concretely, the latest report by the European Commission on the €78bn Portuguese bail-out, published just a couple weeks ago, paints a much different picture for Lisbon than for Athens. An in-depth look at the largely overlooked report after the jump…

Continue reading: “Is Portugal really the next Greece?”

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Posted in Economic growth, EU, EU Commission, Fiscal policy |

A striking coincidence for Monday’s EU summit

January 27, 2012 3:35 pm by Stanley Pignal

Monday’s meeting of EU leaders is meant to focus on growth and jobs, which makes it all the more ironic that it will likely be heavily disrupted by a general strike called by Belgian unions on the same day.

The timing of the strike is a coincidence, unions claim: this is a Belgian rather than a European strike. It was called for in response to clumsy pensions reforms by the new government, led by the Socialist Elio Di Rupo, rather than as a protest against the EU’s austerity measures (though the unions don’t like those much either.)

The impact of the strike is unclear. One high-ranking official in the secretariat of the Council, which organises the event, told Brussels Blog yesterday that there had been serious talk of moving the entire meeting to Luxembourg, where some EU ministerial-level meetings are regularly held.

But assurances from the Belgian government that the show could go on convinced Herman Van Rompuy, who chairs the summits, to push ahead. As a Belgian who championed (and partly enacted as premier) the reforms that are being disputed, he was perhaps unlikely to yield to the street.

“Inside the building, it will be business as usual,” the source said. The subtext is that outside the Justus Lipsius venue it will be impossible to get to Brussels, find a taxi or even a sandwich.

Continue reading: “A striking coincidence for Monday’s EU summit”

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In big Obama speech, a European absence

January 25, 2012 11:17 am by Peter Spiegel

Obama shakes hands with Treasury chief Geithner after his State of the Union address.

The news overnight focused on President Barack Obama’s annual State of the Union address. For the Brussels crowd, the most interesting thing in the speech may have been what was not in the speech: Europe.

Despite the ongoing eurozone crisis, and the increasingly deep involvement of senior US officials like Treasury secretary Timothy Geithner in crisis management, Obama did not mention Europe’s economic problems once. In fact, his only reference to the continent at all was a line that military alliances in Europe (and Asia) were “as strong as ever”, and putting “Berlin” in a list of global capitals where governments are “eager to work with us”.

Obama’s Republican adversaries have not done much more than that in their frequent televised debates, despite growing concern in Washington that a crisis-induced collapse of Europe’s economy could have a severe impact on the US economy in the midst of this year’s presidential campaign.

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Posted in EU, Fiscal policy, Foreign policy |
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Contact the Brussels blog team: Peter Spiegel, Joshua Chaffin, Alex Barker and Stanley Pignal.

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The Brussels blog authors

Peter Spiegel is the FT's Brussels bureau chief. He returned to the FT in August 2010 after spending five years covering foreign policy and national security issues from Washington for the Wall Street Journal and the Los Angeles Times, focusing on the wars in Iraq and Afghanistan. He first joined the FT in 1999 covering business regulation and corporate crime in its Washington bureau, before spending four years covering military affairs and the defence industry in London and Washington.

Joshua Chaffin is one of the FT's EU correspondents, covering areas including policies on trade, the environment and energy. He has worked in the FT's Brussels bureau since late 2008 and before that was an FT correspondent in New York and Washington DC.

Alex Barker is EU correspondent, covering the single market, financial regulation and competition. He was formerly an FT political correspondent in the UK and joined the FT in 2005.

Stanley Pignal is Brussels correspondent for the Financial Times, covering EU justice, home affairs, social developments, telecoms and the Benelux region. He joined the bureau in January 2009, having previously worked for the FT as a corporate reporter in London.

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