Cyprus' Mavroyiannis, right, with EU's Lewandowsky during last year's budget talks
When Andreas Mavroyiannis was appointed the Greek Cypriots’ lead negotiator with the Turkish side of the island this month, many in Brussels took note. Mavroyiannis is not only Cyprus’ former ambassador to the EU, but he served as the island’s EU minister during its eventful EU presidency last year.
Although the Cypriot presidency received mixed reviews, thanks in part to ongoing upheaval back in Nicosia surrounding the country’s then-unfinished bailout, Mavroyiannis was widely viewed as a pro, winning praise in Brussels for his handling of highly-tendentious negotiations over the EU’s €1tn seven-year budget.
So if Mavroyiannis could handle 27 warring EU heads of state, surely his appointment was a sign of new Cypriot president Nicos Anastasiades’ seriousness in tacking the 40-year division of the island, some reasoned. Anastasiades was one of the few Greek Cypriot politicians, after all, who backed the 2004 Annan Plan to reunify the island, and many EU officials have hoped the economic crisis brought on by the €10bn bailout might bring new momentum to finding a solution to the frozen conflict.
Well, not everyone agrees with that assessment – least of all Osman Ertug, the Turkish Cypriot official who will be Mavroyiannis’ chief interlocutor if and when negotiations reconvene. Read more
Greek finance minister Stournaras, left, with IMF chief Lagarde at Monday's eurogroup meeting
In an interview with five European newspapers published Thursday, Jeroen Dijsselbloem, the Dutch finance minister who heads the committee of eurozone finance ministers, said his eurogroup will need to look at whether Greece needs additional bailout aid in April 2014.
This will surprise some members of the troika, particularly the International Monetary Fund, who were pushing for a reckoning much more quickly amid signs the €172bn second Greek bailout is running out of cash much sooner than anticipated.
Once the €3bn in EU aid contained in a new €4.8bn tranche approved this week is paid out, total EU outlays will reach €133.6bn — out of a total €144.6bn committed (the IMF puts up the rest). So just €11bn left in the EU’s coffers. Further evidence that cash is leaving too quickly is contained in the latest report on Greece’s rescue prepared by the European Commission, which our friends and rivals at Reuters obtained and helpfully posted for everyone to see.
As Brussels Blog noted earlier, there is no more EU cash left in the programme for the second half of next year, even though the bailout was originally supposed to contain enough until the end of 2014. But this chart in the new report makes clear that cash may run out even quicker than that: Not only is the third and fourth quarters of 2014 completely unfunded, now there’s only €1.5bn left for the second quarter, too. Read more
Barnier, standing at right, may be in for another tussle with Germany's Wolfgang Schäuble.
With Brussels gearing up for tomorrow’s much-anticipated unveiling of the European Commission’s proposal for a new EU agency to take over responsibility for bailing out and restructuring failing banks, we thought it was as good a time as any to post the outline of the plan presented to commissioners last month.
As we reported in today’s dead-tree edition of the FT, the Commission’s legislative proposal that is to be agreed at Wednesday’s meeting of the college is not much different from the eight-page blueprint (read it here) presented by Michel Barnier, the commissioner in charge of financial regulations, and José Manuel Barroso, the commission president.
Fellow Brussels Blogger Alex Barker has written extensively about the outline both for the FT and the Brussels Blog, but it will serve as a good comparison to what comes out tomorrow since the German government has made clear it is unhappy with key elements of the original outline – particularly its contention that a “network of national resolution authorities and funds” is “not sufficient”. Read more
If there were an award for the most powerful group in Brussels that nobody outside the EU bubble has ever heard of, it would probably go to something called Coreper, which is short for comité des représentants permanents – or the committee of permanent representatives.
Its fancy name belies its simple makeup: the 28 ambassadors sent by the EU’s member states to represent them in Brussels. But don’t let that simplicity fool you. In many respects, their powers rival national ministers.
Their weekly (at least) meetings set the course for EU summits and bargains on every piece of European legislation, from budgets to banking union to border security, and many EU perm reps participate in cabinet meetings back home. Indeed, they sit in for national ministers when they can’t attend regular Brussels gatherings.
But Coreper’s relative anonymity means its members are not widely known at home and it may be why something else has gone largely unnoticed: one of the largest departures of senior Coreper ambassadors in recent memory. By Brussels Blog’s count, this summer will see three of the committee’s six longest-serving members – including its vice-dean – either retire or move onto other postings. Read more
Pedro Passos Coelho, Portugal's prime minister, addresses his nation on Tuesday
Portugal’s political wobble has raised anew questions about whether it will need a second bailout once its current €78bn rescue runs out in the middle of next year. With bond market borrowing costs hovering above 7 per cent – just below levels where Lisbon was forced into the rescue in April 2011 – a full return to market financing appears far less likely than it did just a few days ago.
What are the options if Portugal can’t make it? Back in February, when eurozone finance ministers were weighing whether to give both Ireland and Portugal more time to pay off their bailout loans, EU officials drew up a memo that included a section titled “Options beyond the current programmes and the role of the ESM”.
Although it’s over four months old, it hasn’t been made public before and it offers some newly-relevant insights into what path Portugal may take if it can’t stand on its own by May 2014. Read more
Merkel speaks at the post-EU summit press conference where she chided Anglo Irish bankers
The explosive disclosure of audio tapes capturing phone conversations of executives at the failed Anglo Irish Bank, which appear to show a strategy to win government bailout money by exaggerating the bank’s financial health, have up until now largely been a domestic political scandal confined to Ireland.
But revelations that one executive, the then-head of the bank’s capital markets operations, sang the Nazi-era version of the German national anthem when he learned the bank had won funding from Germany brought a stern rebuke from Angela Merkel early Thursday morning after Irish Times Berlin correspondent Derek Scally asked her about it at a post-EU summit press conference.
“I cannot but express my contempt at this,” Merkel said. Here are her complete remarks on the topic:
EU leaders have been arriving at the summit. In a little Brussels Blog attempt at innovation, James Fontanella-Khan and Peter Spiegel did a two-way Twitter chat on the goings on:
Greek prime minister Antonis Samaras, centre, holds a cabinet meeting this week.
Just how off track is Greece’s €172bn second bailout? When the FT reported that a new €3bn-€4bn financing gap had opened up in the programme, EU and International Monetary Fund officials went out of their way to insist there wasn’t a gap at all.
“There is no financial gap. The programme is fully financed for at least another year, so there is no problem, on the premise that we reach a final agreement on the review in July,” said Jeroen Dijsselbloem, the Dutch finance minister who chairs the eurogroup.
IMF spokesman Gerry Rice weighed in with a written statement: “If the review is concluded by the end of July 2013, as expected, no financing problems will arise because the program is financed till end-July 2014.”
Notice the caveats, however. Both Dijsselbleom and Rice say there won’t be a shortfall – as long as the IMF is able to distribute its next €1.8bn aid tranche before the end of July. Why? Because of the new financing gap, which means the Greek programme essentially runs out of money in July 2014. The IMF must have certainty that Greece is fully financed for 12 months or it can’t release its cash, so after July, it must suspend its payments. Read more
Noonan addresses reporters outside the finance ministers' meeting in Luxembourg Friday
When EU finance ministers reconvene on Wednesday for a last-ditch attempt to strike a deal on bank bailout rules after they couldn’t get one in the early morning hours Saturday, it won’t be the first time fights over Europe’s “banking union” have gone to the eleventh hour before a major EU summit.
The last major decision – how many banks would be overseen by a new single supervisor based at the European Central Bank – also took one failed finance ministers’ meeting late last year before they reached a deal on the eve of a summit.
But EU leaders are sounding a bit more cautious this time than last December, since the issues at hand – who will pay for bank bailouts – are far more politically sensitive than last time around. They involve both power and money. Last time, it was just power.
To get an idea of where things lie after the Friday night/Saturday morning 18-hour marathon, we’ve posted this three-page proposal tabled by Michael Noonan, the Irish finance minister who chaired the meeting as holder of the EU’s rotating presidency, near the end of the debate. Read more
Viviane Reding announces her plan for female quotas on corporate boards in November
Remember EU commissioner Viviane Reding’s effort last year to get the EU to adopt 40 per cent quotas for women on corporate boards? Well, last night, in the words of one EU diplomat, it may have finally become “brain dead”.
At a meeting of employment ministers from all 27 EU members Thursday night in Luxembourg, a group of ten northern and eastern countries – including Germany, Britain, Sweden and the Netherlands – submitted a statement saying they would block the plan. Combined, diplomats said, the countries had more than enough votes to prevent it from ever seeing the light of day again. Read more