Jim Brunsden

Meeting room in the Dutch maritime museum where finance ministers will gather on Friday

Coming to terms with painful truths can take a long time, and the EU’s struggle to acknowledge an original sin built into its banking regulations is a case in point.

It’s a problem that dates back decades, and that finance ministers are going to tentatively grapple with at an informal meeting in Amsterdam this week. It centres on the regulatory treatment of sovereign debt, and we’ve got our hands on the options paper prepared for ministers by the Dutch presidency and posted it here.

While the subject may sound arcane, it’s extremely politically charged. The latest ructions over how to treat bank holdings in government debt are fanning the already hot flames of discord between Rome and Berlin, with Brussels as ever squeezed uncomfortably in the middle.

So what’s the problem? The EU has highly detailed legislation covering different aspects of banks’ activities, in order to ensure that institutions have enough financial reserves to cope with the risks that they are taking with their investments.

The rules cover everything from mortgage lending to complex trading in derivatives, but they have one glaring loophole, namely that many of the normal requirements, such as capital rules and exposure limits, don’t apply to banks’ purchases of European governments’ own debt. Read more

Peter Spiegel

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The list of big American tech companies being investigated by Margrethe Vestager, the EU’s competition chief, for either antitrust violations or sweetheart tax deals already reads like a “who’s who” of Silicon Valley: Google, Amazon, Apple. Her proclivity for going after US companies, particularly in her tax investigations (American non-tech groups like McDonald’s and Starbucks have also been targeted), has already raised eyebrows in Washington, where Treasury officials and members of Congress have accused her of an anti-American bias.

Ms Vestager has denied singling out US firms, and if she is at all chastened by the American criticism, she’s not showing it: as early as tomorrow, she is expected to roll out a second antitrust case against Google, this time accusing the California company of abusing its dominant position in smartphone operating systems to foist its suite of apps on unsuspecting consumers.

In a speech yesterday, the former Danish economy minister compared Google’s practices to the mother of all EU-US tech antitrust cases, the 1990s-era battle with Microsoft. The comparison is apt for two reasons. First is for the reason Ms Vestager intended: during the time when computing was dominated by PCs, desktops running Microsoft’s ubiquitous Windows operating systems would come “bundled” with a wide range of other Microsoft software, most importantly its Explorer internet browser. Such bundling gradually destroyed browser inventor (and onetime market leader) Netscape, since nobody needed its Navigator browser if your PC came with Explorer. Read more

Duncan Robinson

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Pope Francis meets with refugees on the Greek island of Lesbos during a visit on Saturday

Which European country has received the most asylum seekers on a per capita basis so far this year? Germany? No. Sweden? No. Hungary? No. After this weekend, it is actually the Vatican. Aided by a low official population of 450, the Vatican shot to the top of the leaderboard when it comes to housing refugees after Pope Francis returned from his trip to Lesbos with 12 Syrians in tow.

The gesture was token and humanitarian rather than political — or so the Vatican’s spinners insisted. But it provided an ugly juxtaposition for German Chancellor Angela Merkel, who spent the weekend fending off criticism at home after giving the go ahead for a criminal investigation into a comedian who made jokes at the expense of Turkish president Recep Tayyip Erdoğan.

The footage of a pope embracing asylum seekers who fled war only to face months of detention in Greece and then a legally questionable return across the Aegean provided the grimmest reminder yet of the moral price that the EU has paid for the Merkel-led deal with Turkey. Read more

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Will Sunday's referendum help or hurt Beppe Grillo, right, leader of the FIve Star Movement?

Referendums in Europe are often a blunt weapon against the establishment. Italians will be voting in one on Sunday and, of course, it could end badly for Matteo Renzi, the country’s restless centre-left premier. But more likely the result will buck the trend. Indeed this referendum may actually turn the tables and leave the anti-establishment Five Star Movement licking its wounds.

The issue is slightly obscure – oil and gas drilling rights – and the politics is far from straightforward. As the FT’s James Politi explains, Italians will vote on whether to stop renewing offshore licenses for facilities within 12 miles of the coast. The latest polls show the pro-ban environmentalists will win handsomely. But the critical question is whether they will come near the 50 per cent turnout threshold. That is where the real politics comes in.

Mr Renzi is firmly on the side of indifference. He says the referendum is a waste of time and has urged voters to not to bother. In an interview today with La Repubblica he calls it “a hoax”. This all conveniently helps him hedge his position and avoid looking too friendly with Big Oil and Italy’s energy giant Eni. More importantly, it also puts Italy’s leading populist party, the Five Star Movement, to the test.  Read more

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When the European Commission first opened up proceedings to examine whether Poland had violated European norms, it said they would wait until constitutional scholars at the Council of Europe examined the situation first. Well, it’s been a month since the Council slammed the new government in Warsaw – and Frans Timmermans, the Commission vice-president in charge of rule-of-law issues hasn’t done anything yet. The European Parliament yesterday did its best to make sure he doesn’t forget.

MEPs yesterday voted 513 to 142 in favour of a motion censuring Poland’s right-wing, conservative Law and Justice (PiS) government and ordering it to reverse changes to the country’s top court that have left it paralysed. As procedural slaps on the wrist go, it was relatively strong. And while it is legally little more than a strongly-written letter, it also called on the Commission to push ahead with its unprecedented probe into Warsaw’s “threat to constitutional democracy” – which technically could result in sanctions. Read more

Peter Spiegel

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Alexis Tsipras, the Greek prime minister, in between meetings at his office last week

When Wikileaks published a transcript last week of a private teleconference between top International Monetary Fund officials discussing Greece’s bailout, the thing that got Athens the most worked up was a prediction made on the call by the IMF’s European chief Poul Thomsen: he forecast there would be no decision on the programme’s way forward until Greece ran out of money in July. Yesterday, bailout negotiators left Athens after yet another fruitless week of talks. And while they vowed to resume negotiations during the IMF’s spring meetings in Washington, which start on Friday, the differences between the main players remain so wide that Mr Thomsen’s prediction may not be too far off the mark.

For those who only follow the Greek crisis episodically, the fact that the eurozone is facing yet another make-or-break bailout deadline may seem baffling. Wasn’t the Grexit car wreck avoided last July after a series of all-night summits ended with a €86bn rescue deal? Yes and no. The July deal gave Greece €13bn of the €86bn almost immediately, after Athens agreed to quickly pass an overhaul of its value-added tax system and make cuts to pension benefits. But much of the heavy lifting was put off until the new bailout’s first quarterly review – including, critically, a decision by the IMF on whether to participate in the bailout at all.

Casual followers may read the words “first quarterly review” and assume that such a review would be completed at the end of the first quarter. Which, in the case of the new Greek programme, would have meant October. But it has become an unfortunate custom that “quarterly” reviews of Greek bailouts can actually stretch over several quarters – the fifth quarterly review of the second Greek bailout went on for nearly a year. The current “quarterly” review has now gone on for about six months after the first quarter ended. Read more

Peter Spiegel

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Italian banks appear to be in trouble. Again. With €360bn in non-performing loans – by far the largest pile in the eurozone, and behind only Greece and Cyprus as a percentage of all outstanding loans – the market has been selling off Italy’s financial sector since the start of the year to where it’s now down about a third of its value since January. But their troubles have become acute again because of the struggles of one mid-sized bank, Banca Popolare di Vicenza, to raise the €1.8bn in capital the European Central Bank has demanded.

The share sale by Vicenza is being underwritten by UniCredit, Italy’s only systemically important bank, but last week UniCredit sought government assistance out of fear Vicenza’s shares wouldn’t be bought by nervous investors – and UniCredit itself would be left holding the bag. That, in turn, raised questions about UniCredit’s own balance sheet, where it already lags behind many of its peers in terms of financial health.

The Italian government isn’t in a place to help, however. First of all, it doesn’t have any money to throw at the problem; its national debt is already nearly 140 per cent of economic output, the highest in the eurozone outside of Greece, and there’s not a billion or two around to spare. Secondly, and perhaps more importantly, if Rome did intervene, it would have to follow the EU’s new post-crisis banking rules, which require the government to force losses on private investors before any public money can be used to rescue a bank. Read more

Christian Oliver

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Margrethe Vestager, the Commission's competition chief, and her mobile phone

It often seems that the European Commission’s only real game plan regarding Brexit is to hope that there won’t be any unfortunate spats involving the UK right in the middle of campaign season. That won’t be possible, and there is every sign an imminent decision over whether to allow consolidation among British mobile phone network operators could turn into a political football.

Margrethe Vestager, the EU antitrust chief, has been known to argue that cutting the number of players from four to three in any one market saps competition and, in the case of telecommunications, allows companies to increase phone bills. Her hard-line stance on a 4-to-3 Danish telecoms merger last year suggests she’s also looking to block the £10.5bn purchase by CK Hutchison’s Three of Telefónica’s O2. Or at the very least, she will impose stinging concessions.

In less combustible times, the politics would be more navigable. Ofcom, the UK regulator, has already announced it is hostile to the deal. Just this morning, Britain’s competition and markets authority weighed in, writing to Ms Vestager that the merger a “significant impediment to effective competition” in the UK’s mobile phone market. Ms Vestager could quite easily argue that she represents the sort of “more competitive Europe” that David Cameron, the British prime minister, says he wants. She could argue she is simply protecting the little guy from big corporates who will put his phone bills up. Read more

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  © REMKO DE WAAL/AFP/Getty Images

Back in 2005, it was Jean-Claude Juncker who caught the mood after Dutch and French voters spurned a draft EU constitution. “Europe is not in crisis: it is in deep crisis,” he declared. He has gone from Luxembourgish premier to European Commission president since then – and the Dutch are back to saying No. This time team Juncker relayed that the president was just “sad” about the rejection of the Ukraine trade deal. And for europhiles that pretty much sums it up.

This has been a long journey. Referendums on European issues, from the 1970s on, largely acted as a rite of passage: membership, enlargement, monetary union. They then morphed into more wide ranging political guarantees for eurosceptic voters (in Denmark, Britain or France) wary of where pro-European politicians may lead them. Some would call them a reality check.

More recently they have grown to be not just domestic political matters, but negotiating tools or instruments of coercion abroad. This is the weaponisation of referendums and a few EU leaders have been accused of the tactic: Greece’s Alexis Tsipras over bailout terms, Britain’s David Cameron to win a better deal, and Hungary’s Viktor Orban over migration quotasRead more

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David Cameron has had a frustrating week. Since the Panama Papers revealed the offshore dealings of his late father, the British prime minister has vainly tried to stop questions over his family potentially benefiting from tax avoidance. He first politely parried and demanded privacy, then changed tack, clarified his position, challenged his critics to provide evidence, then clarified three times more. Today we know a great deal about what Mr Cameron does not own. But it still isn’t over.

Through this mini-ordeal, Mr Cameron enjoyed one advantage. He can point to a record of championing transparency and fighting offshore corporate dodges. But now even this defensive shield is looking a little shaky.

The FT’s Jim Brunsden has dug deep into a bygone Brussels legislative battle over corporate secrecy and uncovered Mr Cameron’s intriguing personal role. He indeed pressed hard to expose beneficial owners of shell companies. But there was a caveat. In an EU law to tackle money laundering and end harmful secrecy, he wanted special treatment for trusts, discrete legal vehicles Brits have used for centuries to manage estates and pass assets down generations. That now looks a little awkward. Read more

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The Netherlands votes today on the EU’s trade pact with Ukraine. Polls suggest the deal will be rejected. But what will it actually mean? For an answer to that, prepare to enter the topsy-turvy world of Dutch referendums.

Here are some of the contradictions to grapple with. The plebiscite is merely advisory. Most Dutch politicians support the Ukraine deal. Two-thirds of voters say they have no idea what was agreed with Kiev, according to I&O research. Even the referendum organisers were not particularly interested in the details. Yet, in spite of all that, this vote may have some real political consequences for the Netherlands and the EU. Read more

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Spring is coming and Italian politicians know that probably spells trouble. With the improved weather come the migrant boats to Italy’s southern shores and one fiendishly difficult political problem.

Attention in Brussels is still on the migrant flow across the Aegean and the controversial deal with Turkey to stop it. The first so-called “returns” of migrants to Turkey started on Monday, but the first batch included no asylum seekers and the jury is still out on whether the plan is legal, workable or effective.

Over in Rome, however, the concern is more whether the EU can repeat its Turkey trick elsewhere. Angelino Alfano, Italy’s veteran interior minister, wants Brussels to strike similar returns deals with African countries, the source of most migrants reaching Italy. “Europe was able to find the resources when it was urgent — I am referring to Turkey,” he told the FT. “It’s a matter of political leadership.” Read more

Peter Spiegel

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Spain's Mariano Rajoy, right, with Jean-Claude Juncker, European Commission president

Next to Ireland, there have been few eurozone countries that have been touted as austerity success stories more often than Spain. Under the government of Mariano Rajoy, the centre-right prime minister who is still clinging onto office after indecisive elections in December, the country went through a series of wrenching reform programmes and came out the other side with relatively robust growth. In February, the European Commission said Spain’s economic output had grown 3.2 per cent last year, double the eurozone average.

But one thing Madrid can’t seem to do is get a handle on is its budget deficit. Originally, the Spanish government was supposed to get its deficit back below the EU’s ceiling of 3 per cent of gross domestic product by 2013. When it became clear at the height of the eurozone crisis that was impossible, the deadline got extended by a year. But a year later, Madrid had made so little progress that it got a further two-year extension, to 2016. It appears things have gotten no better over those two years, however: yesterday, Spain’s national statistics office announced that the country’s 2015 deficit was nearly 5.2 per cent – even higher than Brussels estimated back in February. Read more

Peter Spiegel

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Erdogan, Merkel and Obama at the November Group of 20 summit in Antalya, Turkey

When Recep Tayyip Erdogan, the Turkish president, shows up for a summit in Washington today, he’ll get something of a cold shoulder. Instead of a one-on-one with President Barack Obama, as Ankara requested, Mr Erdogan will instead be granted an audience with Joe Biden, the vice-president. The White House has tried to explain away the apparent snub as a factor of the 50-odd leaders who are descending on Washington for the gathering on nuclear security. But it is being seen in some quarters as a sign of strain in relations with the US over media freedom and Mr Erdogan’s aggressive military campaign against Kurds.

There have been no such outwards signs of squeamishness in Europe, however, where all 28 EU leaders have had three separate summits with Mr Erdogan’s prime minister, Ahmet Davutoglu, to persuade him to stem the influx of migrants pouring into Europe from Turkey. Angela Merkel, the German chancellor, went so far as to fly to Istanbul on the eve of Turkish elections to be photographed sitting in twin thrones with Mr Erdogan.

Which all makes the new diplomatic dust-up between European governments and Ankara all the more awkward. Yesterday, both Germany and the EU were forced to reiterate their support for a free press and free expression after Ankara summoned Germany’s ambassador to complain about a satirical video shown on German public broadcaster ARD that depicted Mr Erdogan as a dictator rounding up journalists and bombing Kurds. That diplomatic outburst came hot on the heels of an angry denunciation of EU envoys’ presence at an Istanbul trial of two prominent Turkish journalists charged with espionage. Read more

Peter Spiegel

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Olivier Martins, right, speaks to reporters after a hearing on a terrorism case earlier this year.

A day after Fayçal Cheffou was freed by Belgian authorities after an investigative judge determined there was insufficient evidence that he was the third conspirator in last week’s bombing of Brussels airport, his lawyer Olivier Martins made the case in the court of public opinion about why he believes his client is innocent. Speaking on Belgian state television, Mr Martins said Mr Cheffou’s key alibi was his phone records, which showed he had made and received calls at home at the time of the bombing. “The judge carried out these checks [of phone records] immediately and, apparently, these checks proved to be exculpatory,” he said.

Mr Martins confirmed what had been reported in the Belgian press: that the main piece of evidence against his client was the testimony of the taxi driver who unwittingly drove the three bombers to the airport on the morning of the attack. Mr Martins said he challenged the identification, arguing that from airport CCTV footage it was clear the “third man” who was walking alongside the two known suicide bombers was wearing a hat and oversized glasses – a possible disguise. Could the taxi driver really recognise a man in disguise?

He also asked whether investigators had compared fingerprints or DNA taken from the baggage trolley the “third man” was seen pushing in the CCTV video. During the hearing, Mr Martins said the investigating judge acknowledged: “We have the trolley.” But the judge did not reveal whether investigators had compared fingerprints and DNA on the trolley with Mr Cheffou’s. Read more

Peter Spiegel

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What else could possibly go wrong? After days of revelations that Belgian intelligence had all three Brussels suicide bombers on their radar — or at least should have had them on their radar — well before they detonated their explosives, authorities seemed to be able to claim one significant victory: less than 48 hours after the attacks, they netted the last remaining big fish. The plotter known as the “man in white” or the “man in the hat” because of the cream-coloured jacket and floppy headwear he was wearing in Brussels airport CCTV footage was captured on Thursday evening right in front of the federal prosecutors office. Or so prosecutors thought.

Instead, an investigating judge ordered the man, Fayçal Cheffou, released yesterday after the initial evidence he was the third airport conspirator could not be corroborated by DNA and fingerprints. Instead, investigators are back where they started, appealing to the public for information about the man who appears in the grainy CCTV pictures next to the two already identified as airport bombers, Ibrahim El Bakraoui and Najim Laachraoui. After only releasing stills of the footage last week, Belgian federal police yesterday decided to put out the actual video on YouTube, showing the “man in white” nonchalantly pushing his luggage cart through the airport’s departure hall as he casually chats with Bakraoui and Laachraoui. The suitcase bomb on his cart never detonated, and he is believed to have fled the scene. Read more

Peter Spiegel

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Is Fayçal Cheffou the “man in white,” the third conspirator captured on CCTV footage just before last week’s Brussels airport attack pushing a baggage cart next to the two suicide bombers? Belgian prosecutors are operating under that assumption after charging him with terrorist murders on Saturday, but they have yet to formally name him as the man who dropped off the largest bomb at Zaventem airport but later fled after it failed to detonate.

The Belgian press was filled with accounts of Mr Cheffou’s recent activities, including attempts to radicalise migrants who were seeking shelter at a refugee camp in central Brussels. Some accounts have described Mr Cheffou as a freelance journalist, but the only real evidence of that is a video posted to YouTube where he reports on Muslim detainees at a Belgian facility who were allegedly protesting over being given daytime meals during Ramadan.

The charges against Mr Cheffou were just one in a series of moves by law enforcement across Europe to roll up members of the Islamic State network at the weekend. Yesterday alone, Belgian prosecutors brought charges against a man for his role in a Paris terrorist plot broken up by French police last week; Italian police arrested another man on allegations he helped Isis terrorists obtain false residency permits; and just last night Dutch police rounded up a third man in Rotterdam on charges related to the failed Paris attack.

The FT’s security correspondent Sam Jones has a look at whether all the recent arrests are evidence that the Isis network in Europe is far bigger than security services originally believed. In its account of the Europe-wide manhunt, the Wall Street Journal reports French and Belgian authorities have sought US assistance as they attempt to map out the full breadth of the cell. Read more

Peter Spiegel

Belgian’s interior minister Jan Jambon has called it a double erreur – the failure of either the Belgian justice ministry or its Turkish liaison officer to properly handle information provided by Ankara about Ibrahim El Bakraoui, the Brussels airport suicide bomber.

Turkish officials say they deported El Bakraoui, a Belgian national, to the Netherlands in July after picking him up near the Syrian border and informing the Dutch government of his ties to extremists. Read more

Peter Spiegel

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Thus far, Belgian authorities have disclosed only four men were involved in the plot: Khalid at the metro station and the two suicide bombers at the airport, as well as a third man who has become known as the “man in white” who accompanied the two bombers at the airport and is still on the run. But most plots of this sophistication only happen with the help of a broader network of suppliers and enablers, meaning its unlikely the Belgian investigation ends with the four. Read more

Peter Spiegel

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A Belgian soldier patrols the grounds of Brussels airport on Tuesday morning

Belgian authorities this morning are still hunting for a man they believe is on the run after participating in yesterday’s attack on Brussels’ international airport, and have been focusing their investigation on the city’s Schaerbeek neighbourhood after a raid there turned up an explosive device, chemicals and an Islamic State flag. Late last night, the federal police posted new photos of the two other suspects in the airport bombing, who federal prosecutors said are believed to have killed themselves in twin suicide attacks, which has left at least 14 dead. [UPDATE: Belgian broadcaster RTBF has identified the two suicide suspects as brothers Khalid and Brahim El Bakraoui.]

According to Dernière Heure, a Brussels legal tabloid that broken several key angles in the investigation, police were led to the Schaerbeek flat by the taxi driver who unwittingly drove the three attackers to the airport yesterday morning. The paper also says it was the same driver who led investigators to a third, unexploded bomb in a suitcase at the airport; he told police that the three men had carried a lot more bags than just the two that had blown up.

Less is known about the bombing of a metro at the Maalbeek station in the Belgian capital’s EU quarter. Thus far, authorities have released little information other than that at least 20 were killed in that attack, which occurred about an hour after the initial bombs went off at the airport. Eyewitnesses said the explosives went off just as the train was pulling into Maalbeek and survivors had to pry open the doors to get out of the carriage. Read more