Monthly Archives: March 2011

If, hypothetically, a member of the European parliament was caught on video offering to amend laws in exchange for cash, who would investigate such a thing?

The answer – rather less hypothetical after Britain’s Sunday Times exposed what appears like serious misconduct from four MEPs – depends on who you speak to.

The European Anti-Fraud Office, or OLAF, thinks it should be the one investigating. After all, what’s the point of having a dedicated EU anti-fraud agency if you can’t investigate credible allegations that MEPs are taking bribes?

But when an OLAF team showed up in the parliament to search the MEPs offices last week, they were unceremoniously denied entry by parliamentary authorities. Parliamentarians insisted OLAF was set up to investigate fraud against the EU budget, and it’s not clear that the EU has lost money in this episode.

OLAF disagrees on the limits of its role, but so far hasn’t been anywhere near the MEPs’ offices, which have been sealed off.

Insiders say part of the reason for the stand-off is a power struggle between parliament and the European Commission, the EU’s executive branch, which is ultimately OLAF’s master. Read more

In today’s paper, my Berlin-based colleagues Quentin Peel and Gerrit Wiesman note that it’s been a bad week for the eurozone’s most high-profile centre-right leaders: Germany’s Angela Merkel and France’s Nicolas Sarkozy both saw their parties trounced in regional elections, and Italy’s Silvio Berlusconi was back in court.

But what remains unclear is whether the traditional centre-left can capitalise on the faltering conservatives. If recent evidence is any indication, it’s not a clear-cut trade-off at all. Indeed, in eurozone countries where governments have either recently fallen or are likely to do so soon – Ireland, Portugal and Finland – centre-right parties are ascendant. Read more

With most of the work on the so-called “grand bargain” completed at last week’s European Union summit, all eyes will now focus on Portugal and whether it can make it until expected elections in May or June without resorting to a bail-out.

A new research note by Giles Moec, the head of European economic research at Deutsche Bank, nicely encapsulates the stakes facing Lisbon and summarises much of what we were hearing on the sidelines of last week’s summit – namely, that it would be in Portugal’s interest to take a bail-out, but the political turmoil may make it impossible.

As Moec notes, the date to watch is April 15, when the Portuguese government has about €4.3bn in outstanding debt it must refinance. With Portugal’s 10-year bonds hitting another euro-era high of 7.9 per cent on Monday – well above the 7 per cent the government has said it can handle – that April deadline is looking rather expensive. Read more

European Union leaders agreed to set up a permanent bail-out mechanism for troubled eurozone economies after 2013. Lex’s John Authers and Vincent Boland discuss whether the measures can solve the problems facing the eurozone. Read more

Day one of the European Union summit finally broke up after midnight Friday, with leaders finalising the structure of a new eurozone bail-out system that will go into place in 2013 and some tough language on Libya, including the promise to push for more sanctions against Libyan oil and gas companies.

Most everything else in the much-anticipated “grand bargain” to shore up the eurozone was decided before the summit, so the rest of the conclusions on economic and fiscal issues were widely reported and expected.

One thing worth reflecting on, however, is the fact that what was once one of the most contentious proposals to reform the EU’s economic governance – new budget rules that allow the EU to fine wayward member states – was agreed to without much controversy. That may require Brussels elites to reconsider the Hungarian presidencyRead more

Portugal’s prime minister has resigned on the eve of a European Union summit that is supposed to move towards a “grand bargain” to bolster the eurozone and strengthen its crisis prevention ability. The currency bloc is in a bind. Lex’s Edward Hadas and Vincent Boland discuss just how bad it is and what might come next. Read more

The Liberal Democrats chose the elegant Palais D’Egmont for their pre-summit gathering. While the leafy grounds are gorgeous – particularly on a very un-Belgian sunny day – the mood was anxious. Read more

Until Portugal imploded, most of the focus of the two-day summit was expexted to be on the new Irish prime minister Enda Kenny, who failed to secure a cut in Dublin’s bail-out loans during an emegency gathering two weeks ago. Read more

The pre-summit caucuses of leaders in their party groupings have begun, and one of the surprise guests at the centre-right European Peoples’ Party meeting is Pedro Passos Coelho, the head of Portugal’s opposition Social Democrats and the country’s likely next prime minister. Read more

As we’ve been reporting for the last couple of days, many of the fiscal measures that we once thought had been agreed for the two-day summit are unravelling, thanks in part to Finland’s objections to finalising an increase in the eurozone’s €440bn bail-out fund and Germany’s sudden objection to the structure of the €500bn fund that will replace it in 2013. Read more