Daily Archives: June 14, 2011

Barroso at EU-Russia summit

José Manuel Barroso, the European commission president, emerged from the latest EU-Russia summit with a conditional pledge from Moscow to lift a blanket ban on European vegetables imposed more than a week ago in the midst of a deadly E. coli outbreak.

Moscow’s concession may bring a conditional sigh of relief from European farmers, who have been devastated by the outbreak. But it underscores the simmering tension between the two trading partners when it comes to the health and sanitary standards that govern agricultural goods.

Russia has become the biggest market for EU exports of meat and vegetables. But if it is an important customer, it is also a hugely demanding one. The chief complaint among EU producers is that Moscow uses arbitrary health and sanitary standards to restrict their goods – be it German pork or Dutch apples. 

Monday night, the work of EU finance ministers meeting in Brussels today to unravel the Greek debt crisis got a whole lot harder: Standard & Poor’s downgraded Greek sovereign bonds to just a few notches above default.

If ministers were hoping to “re-purpose” Greek debt in a way that would prevent the eurozone’s first-ever default, S&P is basically telling them: Good luck; we don’t believe you can do it.

But a closer reading of the S&P report may give the eurozone leaders an out: the credit rating agency seems to have ignored the possibility that the new Greek bail-out will opt for a roll-over of Greek bonds, a plan backed by the European Central Bank, instead of a debt swap, which is supported by Germany.