Peter Spiegel

Regling, right, with European Central Bank president Mario Draghi at a press conference

Klaus Regling has been the head of the eurozone’s rescue funds – first the temporary European Financial Stability Facility, now the permanent European Stability Mechanism – since the outset of the debt crisis, a perch that has given him a unique insight into the five years of occasionally contentious deliberations over the bloc’s five bailouts: Greece, Ireland, Portugal, Spain and Cyprus.

But as the EFSF turned into the ESM, and as the €500bn ESM gained staff and authority, Regling’s own role in eurozone debates has grown – particularly on the issue of Greek debt, where he has been a frequent and outspoken critic of the argument, made both in Athens and by the International Monetary Fund, that the heavy debt burden is what ails the Greek economy.

Two years ago, in an interview with our friends and rivals at the Wall Street Journal, Regling in essence sounded the death knell for a November 2012 deal where eurozone governments had promised debt relief for Athens as long as it achieved a primary budget surplus – something it achieved by the end of 2013. As Regling predicted, the eurozone did not restructure Greece’s debts despite Athens living up to its side of the 2012 agreement and posting a surplus.

In an interview this week with the Financial Times, Regling has done something similar. As part of July’s controversial €86bn bailout deal, creditors again held out the promise of debt relief. And Regling is now suggesting that even if it does occur, a restructuring will not be on the scale Athens and the IMF had been arguing for just four months ago.

Our story on the Regling interview is here, but as is our practice at the Brussels Blog, we’re offering an annotated (and slightly edited for length) transcript for readers who want to hear more from Regling below. Read more

Jim Brunsden

Juncker urged additional eurozone reform in his "state of the union" address in Strasbourg

When Jean-Claude Juncker this week told a packed European Parliament he intends to forge a eurozone system for guaranteeing bank deposits, the European Commission president’s intention was to send a firm message of determination to strengthen the single currency’s foundations.

But just days after Juncker’s “state of the union” address, his attempt to sow hopeful seeds has hit stony ground in Berlin, where the plan was taken more as a declaration of war.

Germany’s fightback begins when finance ministers gather in Luxembourg on Friday, and is set out in a “non paper” obtained by the FT. Our story on the document in the FT’s dead-tree edition is here, but for those who want a bit more detail, we’ve posted it here, too.

Unlike the series of emergency gatherings on Greece this summer, the weekend “informal” meeting of eurozone finance ministers was intended to be a calmer, and above all shorter, stocktaking of the health of the common currency.

Now, however, Germany has decided to use it as an opportunity to put down clear red lines in an attempt to redirect the eurozone reform discussion, which gained momentum following the mess of the July Greek bailout deal on what Berlin believes is an unacceptable course. Read more

Peter Spiegel

ESM chief Klaus Regling, right, with German finance minister Wolfgang Schäuble

Now that eurozone finance ministers have approved reopening bailout talks with Greece, the long slog to negotiating a €86bn deal begins. And one of the remaining unanswered questions is just how Greece’s bailout creditors plan to pay for it.

Klaus Regling, who heads the eurozone’s €500bn rescue fund, told German television this week that his European Stability Mechanism was preparing a loan of “perhaps €50bn” for Greece’s third bailout. That would leave as much as €36bn to scrape together from other sources.

The second largest source of bailout funding throughout the Greek crisis has always been the International Monetary Fund, which is still in the middle of a five-year €28bn rescue. That IMF programme has distributed €11.6bn so far, leaving €16.4bn that the new bailout could tap.

But the recent update of the IMF’s debt sustainability analysis, published by the Fund on Tuesday, makes clear that they are in no mood to disburse any of those funds unless there is a full-scale debt restructuring – which Germany and other eurozone creditor countries have fiercely resisted. Read more

Peter Spiegel

Euclid Tsakalotos, the new Greek finance minister, at Tuesday's eurogroup meeting

Late on Thursday, the Greek government submitted its long-awaited economic reform proposal to go along with Wednesday’s request for a new three-year bailout programme.

The package sent to creditors included three documents: first is a letter from Alexis Tsipras, the Greek prime minister, which we’ve posted here; second it a more detailed letter from Euclid Tsakalotos (here), the new finance minister; and the third is what’s called the “prior actions” – a 13-page plan of reform measures that must be completed prior to winning bailout aid (here).

We will more completely gut these documents in the morning, but a few things that stand out. First, none of the documents mentions debt relief. This was a major demand of Yanis Varoufakis, Tsakalotos’ predecessor. And while it is obliquely mentioned in Wednesday’s bailout request, there’s nothing in the documents sent to Brussels Thursday night that mentions the topic.

Instead, what is interesting about both the Tsipras and Tsakalotos letters is their explicit mention of wanting to remain in the EU’s common currency. As Tsipras puts it:

With this proposal, the Greek people and the Greek government confirm their commitment to fulfilling reforms that will ensure Greece remains a member of the Eurozone and ending the economic crisis. The Greek government is committed to fully implementing this reform agenda – starting with immediate actions – as well as to engaging [sic] constructively on the basis of this agenda, in the negotiations for the ESM loan.

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Peter Spiegel

Greece's Alexis Tsipras, left, with Germany's Angela Merkel on Tuesday night in Brussels

Greek authorities got their final dash to find a bailout agreement before the weekend formally underway on Wednesday by submitting a simple one-page request to the eurozone’s €500bn bailout fund, the European Stability Mechanism, for a new three-year programme.

Under the timetable agreed with EU leaders at Tuesday night’s summit, the request letter is something of a formality. The real details are due on Thursday, when Athens will submit their “prior actions” proposal – the detailed economic reforms that they will pursue under a new, third programme.

Still, the letter (which we’ve posted here) includes some interesting clues as to where Athens is headed. First of all, Greece is seeking a three-year programme and not a two-year bailout that was requested last week. The International Monetary Fund has estimated a three-year programme could cost as much as €70bn.

The letter also suggests Athens is willing to “immediately implement…as early as the beginning of next week” some of the things that creditors were demanding during negotiations on its old €172bn rescue, which expired June 30 – including tax reforms and pension system overhaul.

This appears part of an effort to quickly release short-term “bridge financing” so that Athens can repay the €1.5bn it still owes to the IMF, avoid a default on a €3.5bn bond due the European Central Bank in less than two weeks, and pay another €3.2bn ECB-held bond in August. Read more

Peter Spiegel

Greece’s recently-departed finance minister Yanis Varoufakis repeatedly argued that Greece could never leave the eurozone because there is nothing in the EU treaties that permits exit from the bloc’s common currency. But that hasn’t stopped EU lawyers from looking.

According to eurozone officials, EU legal scholars have been combing through the treaties to find provisions that would allow for Grexit – not because it is something they’re pushing for, but rather because they’re worried the country could be soon entering a legal limbo that could prevent it from getting the financial aid it desperately needs.

If Greece begins printing its own money – which could happen in a matter of weeks if the European Central Bank decides to cut off emergency loans to Greek financial institutions – it may no longer be eligible for aid from the eurozone’s €500bn rescue fund, since it is using a different currency.

But because Greece would still be legally part of the eurozone, it wouldn’t be eligible for the aid scheme reserved for non-EU countries, known as a “balance of payments assistance” programme. Hungary, Romania and pre-euro Latvia all received so-called “BPA” programmes during the crisis.

The traditional assumption is that because there is no explicit way to leave the eurozone, the only clause that comes into play is Article 50 of the Treaty on European Union, which allows for withdrawal from the entire EU. This would require Greece to request a departure, however, which is unlikely, and while there are an increasing number of leaders willing to let Greece leave the eurozone, none want it to leave the EU.

Officials say lawyers are instead looking at Article 7, which was adopted for a very different reason: In the wake of the Austrian government’s decision to include the far-right Freedom Party of nationalist Jörg Haider in a coalition, EU leaders wanted a way to punish countries that did not live up to European values. Read more

Peter Spiegel

Alexis Tsipras, the Greek prime minister, has once again changed the terms of the debate in the ongoing crisis by requesting a new third bailout from the eurozone’s €500bn bailout fund, known as the European Stability Mechanism, just hours before his current bailout expires.

According to a copy of the letter sent to the ESM and Jeroen Dijsselbloem, the Dutch finance minister who chairs the committee of his eurozone counterparts, which we’ve posted here, the loan request is for €29.1bn to cover debts maturing into 2017.

That would seem to be a pretty traditional bailout request. But it also contains some untraditional demands that may be difficult for creditors to accept. Below is an annotated version of Tsipras’ letter:

Dear Chairperson, dear President,

On behalf of the Hellenic Republic (“the Republic” or “Greece”), I hereby present a request for stability support within the meaning of Articles 12 and 16 of the ESM Treaty.

The ESM treaty is the law that now governors all eurozone bailouts. It wasn’t in place for either Greece’s first or second bailouts, but it would set the terms for its third. Articles 12 and 16 simply state the purpose of a bailout programme: to “to safeguard the financial stability of the euro area as a whole and of its Member States.” Unfortunately for Tsipras, Article 16 also happens to mention that a new programme must include a new “MoU” – or memorandum of understanding, a phrase that is politically poisonous in Greece.

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Peter Spiegel

Demonstrators hold up placards urging a "no" vote in Sunday's bailout referendum

[UPDATE] Late on Monday, Donald Tusk, the European Council president, wrote to Alexis Tsirpas, the Greek prime minister, to inform him that his request for reconsidering an extension of his country’s bailout had been denied. We’ve obtained a copy of that letter, too, and posted it here.

In it, he notes the eurogroup of finance ministers already decided the issue, adding:

After consultations with leaders, in the absence of new elements, I see no willingness to go against the position expressed by finance ministers at their 27 June meeting.

This is likely the last chance Tsipras had to avoid having Greece’s EU bailout expire on Tuesday night. With that gone, on Wednesday his country goes without an EU safety net for the first time in five years.

There may be less than 48 hours remaining in Greece’s EU bailout, and Saturday’s decision by eurozone finance ministers not to extend the programme through next Sunday’s Greek referendum on creditors’ “final” offer was largely seen as the final nail in the rescue’s coffin.

But could it still be extended at the 11th hour?

That’s clearly the hope of Alexis Tsipras, the Greek prime minister, who has written to all eurozone heads of government asking them to reconsider the decision. We’ve obtained a copy of the letter sent to Xavier Bettel, the prime minister of Luxembourg, who takes over the EU’s rotating presidency this week. A copy of the letter is posted hereRead more

Peter Spiegel

Finance minister Yanis Varoufakis, left, with Greece's negotiating team at the eurogroup

Athens’ final counterproposal to its trio of bailout monitors would re-impose many of the large-scale corporate taxes and pension contributions that creditors demanded be stripped out amid concern it would plunge Greece into a deeper recession.

According to a copy, distributed to eurozone finance ministers Thursday and obtained by the Financial Times, Athens has stuck with its demand for a one-time 12 per cent tax on all corporate profits above €500,000, a measure the government estimates will raise nearly €1.4bn by the end of next year.

In addition, it would raise employer contributions to Greece’s main pension fund by 3.9 per cent and would more slowly implement measures to raise the country’s retirement age to 67 and “replace” rather than phase out a special “solidarity grant” to poorer pensioners.

We have posted a copy of the Greek counterproposal here.

Greece’s bailout creditors – the International Monetary Fund, European Central Bank and European Commission – eliminated the one-time profits tax and the increase in employer contributions to the pension system in their offer to Athens yesterday, arguing that such heavy levies on companies would severely hit economic growth. It also pushed for more aggressive timeline for raising the retirement age and cutting the special top-up for poorer pensioners.

Still, the Greek plans contain some key concessions from the original proposal submitted by Alexis Tsipras, the Greek prime minister, to creditors in an offer made on Monday. Although legislation raising the retirement age would not be implemented until the end of October – creditors want it to kick in immediately – it accepts the 67-year retirement age should be hit by 2022. Originally, Athens was proposing 2025. Read more

Peter Spiegel

IMF's Christine Lagarde, right, and EU economics chief Pierre Moscovici in Brussels Wednesday

As expected, the standoff between Athens and its creditors that exploded into the open on Wednesday has focused on pension reforms – a point made clear in a document obtained by the FT’s correspondent in Athens, Kerin Hope.

According to the five-page list of “prior actions” – which are always the real nitty-gritty in any bailout agreement, since it lists the specifics that the sitting government must implement and the calendar for implementation – creditors have asked for wholesale changes to the pension proposals made earlier this week by Alexis Tsipras, the Greek prime minister.

We’ve posted the document here.

In order to achieve savings of 1 per cent of gross domestic product – or about €1.8bn – starting next year, creditors are demanding a significant rewriting of Tsipras’ pension reform plan.

First, rather than gradually raising the effective retirement age to 67 by 2025 as Athens has proposed, creditors want that moved up to 2022 (Athens had originally shot for 2036 in one of its earlier proposals). The creditor plan would allow for retirement at 62, but only for those who have paid into the system for 40 years. Those measures would become law immediately, under the counterproposal. Read more

Peter Spiegel

Greek soldiers march in front of parliament during a military parade to mark independence

One of the oddities of Greece’s bailout programme has been that, despite five years of punishing austerity, its military budget remains amongst the highest in the EU.

Early in the crisis, the issue became controversial during a dispute over whether Athens should follow through on a contract to purchase German-built diesel submarines – a move that was criticised as a way to curry favour with Greece’s largest creditor.

More recently, the far-left government of Alexis Tsipras raised questions when it agreed to sign off on a €500m programme to upgrade five aging US-made maritime patrol aircraft.

And according to a document obtained by Brussels Blog and posted here, the issue has come up again during the current standoff between Athens and its international creditors as a way to breach the fiscal gap the two sides are currently wrestling over.

To recap, Greece’s bailout monitors have pushed Athens to make up a €1bn-€2bn annual budget shortfall by cutting public sector pensions and raising value-added taxes on some items like electricity, which Tsipras has resisted. Creditors have insisted they are open to other ideas, but argue Athens has not come back with credible alternatives.

The three-page document, circulated among creditors, shows that two of Greece’s bailout monitors – the European Commission and European Central Bank – think defence cuts would be one way to make up the difference and have suggested changes (particularly moving to a less manpower-intensive force structure, a decision several Nato allies like the US have already taken) in talks with Greek negotiators:

 Read more

Peter Spiegel

Greece's Alexis Tsipras with EU Commission president Jean-Claude Juncker last week

This weekend’s fireworks over Greece’s bailout were centred on a new counterproposal submitted by Greek ministers, who flew to Brussels to turn it over by hand. As the world knows by now, senior European Commission officials – acting on behalf of all three Greek bailout monitors – rejected it out of hand.

For Brussels Blog readers who want to evaluate the proposal for themselves, we obtained a copy of the new Greek plan and have posted it here (our friends and rivals at the Greek daily Kathimerini beat us to the punch, and you can read their summary here).

The most important thing to note is that, after weeks of holding out, Athens has agreed to meet the creditors’ demands on fiscal targets for this year and next year. In 2015, they’ve agreed to a primary budget surplus – revenues minus expenses when interest on sovereign debt isn’t included – of 1 per cent of gross domestic product, and 2 per cent for 2016. That’s exactly the levels demanded by creditors in a compromise plan presented to Alexis Tsipras, Greek prime minister, nearly two weeks ago.

But creditors do not believe the underlying figures in the document support those targets. One official cited the €700m Athens proposes to save next year through cracking down on value-added tax fraud as an item that fails to hold up under scrutiny. Read more

Peter Spiegel

Merkel, standing, with her finance and defence ministers in the Bundestag last month

Just when is the real deadline before which Greece has to reach a deal with its creditors to gain access to €7.2bn in bailout aid?

Its current bailout ends on June 30, and officials think that if a deal is in place by the next scheduled meeting of eurozone finance ministers, June 18, there may just be enough time for Greece to pass the necessary legislation to get the rescue disbursement before the clock runs out.

But Stefan Wagstyl, the FT’s man in Berlin, writes to point out there’s another looming deadline that could cause problems for a Greece decision, tied to the upcoming recess of the Bundestag, which must approve any aid tranche:

It could be that Greece’s real deadline is much earlier that many realise: June 14. That is the date by which German officials say Greece and its bailout monitors must complete a new agreement for the German parliament to have time to vote on it before the end of the month.

 Read more

Peter Spiegel

Tsipras, left, with European Commission president Jean-Claude Juncker on Wednesday

The Greek government of prime minister Alexis Tsipras has long argued debt relief must be part of any new agreement to complete its current €172bn bailout. But the compromise plan drawn up by its international creditors and presented to Tsipras on Wednesday night in Brussels (obtained by the Greek daily To Vima, and posted here) contains no such promise.

So Athens is intending to present its own restructuring plan that the government claims will cut its burgeoning debt load from the current 180 per cent of gross domestic product to just 93 per cent by 2020.

The plan is touched on in the 47-page counter-proposal Athens sent to its creditors Monday night (see page 44 in the document, posted by the German daily Tagesspiegel here). But it is given a full treatment in a new seven-page document authored by the government and entitled “Ending the Greek Crisis”. Brussels Blog got a copy and posted it here.

The restructuring plan is ambitious, offering ways to reduce the amount of debt held by all four of its public-sector creditors: the European Central Bank, which holds €27bn in Greek bonds purchased starting in 2010; the International Monetary Fund, which is owed about €20bn from bailout loans; individual eurozone member states, which banded together to make €53bn bilateral loans to Athens as part of its first bailout; and the eurozone’s bailout fund, the European Financial Stability Facility, which picks up the EU’s €144bn in the current programme.

If all the elements of the new plan are adopted, the Greek government reckons its debt will be back under 60 per cent of GDP – the eurozone’s ceiling agreed under the 1992 Maastricht Treaty – by 2030, as this chart from the document shows:

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Peter Spiegel

The Franco-German contribution ahead of today's Brussels meeting contains little detail

When eurozone leaders decided last year it was time for another look at overhauling their common currency, the main driver was Mario Draghi, the European Central Bank chief who has been one of the main figures behind the push to make the eurozone a more fully integrated and centralised union.

But in the months since a Draghi-backed decision for the eurozone’s four presidents – the heads of the European Commission, European Council, eurogroup and ECB – to present another blueprint on the way forward at June’s EU summit, the appetite among political leaders for a step change, always lukewarm, has cooled even more.

If documents sent around to national capitals in recent days ahead of Tuesday’s Brussels meeting of EU “sherpas” – the top EU advisers to all 28 prime ministers – are any indication, the report being pulled together may propose little more than a bit of euro housekeeping in the near term. Although more ambitious plans could be included, the leaked documents show they will be relegated to the medium and long term – a tried and true EU tradition that is normally a recipe for bureaucratic burial.

Among the documents obtained by the Brussels Blog are a three-page summary of what the new report will look like (posted here) as well as a Franco-German contribution (the French version is here) and that of the Italian government (conveniently in English, here).

Although the Italians emerge as the most ambitious reformers of the lot, the “note for discussion by sherpas” makes pretty clear that the measures being contemplated for immediate action are the leftovers from recent reform efforts – streamlining and clarifying the EU’s crisis-era budget rules, for instance, and adding a bit more financial heft to the EU’s bank bailout fund. Read more

Peter Spiegel

Juncker, left, with Greek prime minister Alexis Tsipras at last month's EU summit in Brussels

The Greek daily To Vima has a nice scoop this afternoon about a document they’ve been leaked purporting to be a new proposal from Jean-Claude Juncker, the president of the European Commission, on how to break the standoff between Athens and its creditors.

According to the To Vima report, the plan envisions a deal with Greece that completely cuts out the International Monetary Fund and releases about €5bn in aid to Athens from three different sources: the €1.8bn remaining in the EU’s portion of the current bailout; €1.9bn in profits from Greek bonds purchased by the European Central Bank back in 2010; and another €1.3bn or so in additional Greek bond profits the ECB will get in July.

In exchange, Greece would agree to adopt a relatively short list of economic reforms that are significantly narrower from those being sought by the IMF and a German-led group of hardliners within the eurozone.

The Commission’s spokeswoman responsible for economic issues, former Reuters correspondent Annika Briedthardt, has already distanced the Commission from the document, saying in a tweet that she’s not aware the proposal actually exists:

Other commission officials are similarly playing down its importance. “We have many documents,” said one, only half-jokingly.

Although nobody is admitting the provenance of the document, what it appears to be is one in a series of proposals going back and forth between the Commission and Athens in an effort to find common ground, rather than a full-blown “Juncker Plan” to cut the Gordian Knot. Read more

Peter Spiegel

Group photo, distributed by the European Commission, of "sherpas" at last month's meeting

The agenda for next month’s EU summit has the potential to become very full very fast. European leaders are already facing a fraught decision over whether to extend economic sanctions against Russia, which expire in July.

Then there’s the ongoing Greek fiscal crisis, which could come to a head in June, when Athens’ current bailout ends. And now David Cameron, the rechristened UK prime minister, has signaled he will launch his renegotiation of Britain’s relationship with the EU at the same session.

Almost forgotten in this mix is eurozone leaders’ promise to revisit the future of their monetary union with a new “four presidents’ report” on how to fix the remaining shortcomings, due to be presented in June, too (the four presidents refer to the heads of the European Commission, European Council, European Central Bank and the eurogroup).

In preparation for that report, the so-called “sherpas” for all 28 EU leaders have been meeting periodically in Brussels under the chairmanship of Martin Selmayr, Jean-Claude Juncker’s influential chief of staff. Ahead of the last session on April 27, a summary of where the group stood was circulated to national capitals, and Brussels Blog obtained a copy.

As we reported in today’s dead-tree edition of the FT, the document contains no mention of changing EU treaties any time soon, which will disappoint Cameron, who has included treaty changes as a pillar of his renegotiation campaign. Indeed, the clearest thing to come out of the five-page “note for discussion by sherpas” is that there is not a huge amount of enthusiasm for doing much of anything. Read more

Peter Spiegel

Dijsselbloem, left, and Sapin during a February eurogroup meeting in Brussels

Normally, it wouldn’t seem unusual for Jeroen Dijsselbloem, the Dutch finance minister, to be making the rounds to the eurozone’s major capitals. He is, after all, chairman of the eurogroup, the committee of 19 eurozone finance ministers that, among other things, is locked in a prolonged dispute over the Greek bailout.

In addition to Greece, Dijsselbloem has other things to discuss, including a report due in June from the so-called “four presidents” – Dijsselbloem, the ECB’s Mario Draghi, Jean-Claude Juncker at the European Commission, and Donald Tusk at the European Council – on the future of the monetary union.

But Dijsselbloem only has two months left on his term as eurogroup president, and the race between the centre-left Dutchman and his centre-right Spanish counterpart, Luis de Gindos, is beginning to heat up. So is the fact he is in Paris today to meet French political leaders, and in Berlin tomorrow, and Rome on Friday, a bit of a campaign swing as well?

If so, it got off to a good start. The FT’s woman in Paris, Anne-Sylvaine Chassany, went to a joint news conference between Dijsselbloem and his French counterpart Michel Sapin, and reports that the Frenchman was robust in his endorsement of the incumbent:

 Read more

Peter Spiegel

Monday night’s live TV interview with Alexis Tsipras, the first since he became Greece’s prime minister, has generated headlines because of his declaration that, if the deal he ultimately strikes with eurozone creditors includes measures he promised to avoid, he’d put it up for a referendum.

But the three-hour-long session contained some other nuggets that illustrated anyone who thought Tsipras was going soft after reshuffling his bailout negotiating team on Monday morning may have miscalculated.

At the very top of the show, for instance, he accused Angela Merkel, the German chancellor, of “political weakness” for failing to admit the Greek bailout has been “a failure”.

For eurozone crisis obsessives, another exchange was particularly notable: Tsipras claimed that as part of the critical agreement on February 20 to extend Greece’s bailout through June, he received a verbal commitment that the European Central Bank would allow Athens to sell more short-term debt. Read more

Peter Spiegel

Dijsselbloem, left, with Spanish rival de Guindos during a eurogroup meeting in December

The second quarter of 2015 will not only bring a crescendo in the ongoing Greek crisis for the 19 eurozone finance ministers who make up the eurogroup, which must ultimately decide whether Athens gets the bailout funds it needs to avoid bankruptcy. It will also trigger something nearly as closely-watched by EU insiders: an active race to head the group.

Jeroen Dijsselbloem, the Dutch finance minister who was the surprise pick to preside over the powerful committee when he was plucked from obscurity just weeks after national elections pushed his party into government in late 2012, will see his two-and-a-half year term end in July.

Unusually for such high-profile EU posts, both Dijsselbloem and his leading challenger, Spanish finance minister Luis de Guindos, have publicly declared their interest in the job. Indeed, de Guindos received a very public, full-throated endorsement from his prime minister, Mariano Rajoy, at last month’s EU summit in Brussels.

Although the politicking hasn’t really begun in earnest yet – the group is somewhat preoccupied with Greece at the moment – the Brussels Blog has talked to a handful of insiders to gauge where the race stands. Most believe it will come down to a political showdown between the EU’s two main pan-European party groups, the centre-right European People’s Party and the centre-left Party of European Socialists.

Here’s how most are handicapping it now – plus a few dark horses who could emerge if the two men cancel each other out. Read more