Brussels bureau chief Peter Spiegel says Ireland and Portugal face a grilling on their budgets at the meeting of EU finance ministers in Brussels, and that pressure is building on these countries to take rescue aid, as fear of debt contagion across the eurozone increases.
The euro has fallen by almost 20 per cent against the dollar since last November, and the general view in Europe is that this is good news – indeed, one of the few pieces of good economic news to have come Europe’s way recently. The argument goes as follows: euro weakness = more European exports = higher European economic growth.
Unfortunately, the real world is not as simple as that. Inside the 16-nation eurozone, not every country benefits equally from the euro’s decline on foreign exchange markets. As Carsten Brzeski of ING bank explains, what matters is not so much bilateral exchange rates as real effective exchange rates. These take into account relative price developments and trade patterns, and their message for the eurozone is far from reassuring. Read more
How can Greece dig itself out of crisis? From the sunny shores of south-eastern Europe, it could do worse than take a look at the windswept, north-western corner of the continent and study what the Irish government is doing.
As I noted last week, Greece, in spite of the disastrous condition of its public finances, has hardly suffered at all so far in terms of the living standards of ordinary citizens. Gross domestic product is thought to have slipped by a mere 1.1 per cent last year. By contrast, Ireland has experienced a vicious recession: between the fourth quarter of 2007 and the second quarter of 2009, Irish GDP slumped by more than 10 per cent. Read more
At another level, however, Greece itself seems to be getting off remarkably lightly. Germany suffered a 5 per cent slump in gross domestic product last year; Greece is expected to have suffered a fall of about 1.1 per cent. Spain has a 19 per cent unemployment rate; Greece’s rate is only 9 per cent. The Irish government is imposing extreme austerity measures on its citizens to protect Ireland’s eurozone membership; Greece’s government is, so far, doing nothing of the sort. No wonder Greece’s 15 eurozone partners, the European Commission and the European Central Bank are furious with the political classes in Athens. Read more
The distance separating Britain’s perceptions of the European Union from those of its Continental partners is so vast that the English Channel might as well be the Pacific Ocean. This was my first thought when I read not just David Cameron’s speech on what steps a future Conservative government would take to limit EU involvement in British affairs, but also the way the speech was reported and the reactions on each side of the Channel.
The Financial Times story, for instance, said Cameron’s speech set out “a very limited programme for European reform” – an interpretation which would raise howls of laughter across much of Europe, where the Conservative leader’s proposals are not viewed as “very limited” and are most definitely not seen as an effort at “reform”. Read more
There is something fishy about the race to fill two of the biggest jobs going in Europe – the first long-term presidency of the European Union, and the post of EU foreign policy chief. The closer the EU gets to decision time, the more various unofficial candidates are ruling themselves out or running into difficulties. As far as concerns the presidency, the latest person to say she doesn’t want to be considered for the job is Mary Robinson, the former Irish head of state.
In some ways, it’s a shame. The politically independent Robinson commands much respect across Europe and beyond – more than certain candidates I could mention from Belgium and Luxembourg. It would also be a clever move on the part of the EU’s 27 leaders to put a woman in the presidency and so boost the EU’s profile in the eyes of its citizens. Read more
A couple of months ago, some European Union policymakers talked despairingly of how 2009 risked turning out to be “a wasted year”. Now the EU is on a roll. The impasse over José Manuel Barroso’s reappointment as European Commission president was removed last month when the European parliament stopped playing games and renewed his term of office.
Victories in referendums rarely come as big as this. With full results in from more than half Ireland’s constituencies, the pro-Lisbon treaty camp is ahead by 66.8 to 33.2 per cent. What’s more, the turnout is high – almost 59 per cent, compared with 53 per cent when Irish voters rejected the European Union’s Lisbon treaty in June 2008.
No wonder Irish premier Brian Cowen looks like the cat that’s been served the cream (when he and his party are annihilated in the next Irish parliamentary election, he can always say he did the noble thing on Lisbon before perishing). And no wonder Irish big business is pleased, too. They were very visible on the Yes side during this campaign and they needed a convincing result to justify the money and effort. Read more
Peter Spiegel is the FT's Brussels bureau chief. He returned to the FT in August 2010 after spending five years covering foreign policy and national security issues from Washington for the Wall Street Journal and the Los Angeles Times, focusing on the wars in Iraq and Afghanistan. He first joined the FT in 1999 covering business regulation and corporate crime in its Washington bureau, before spending four years covering military affairs and the defence industry in London and Washington.
Joshua Chaffin is one of the FT's EU correspondents, covering areas including policies on trade, the environment and energy. He has worked in the FT's Brussels bureau since late 2008 and before that was an FT correspondent in New York and Washington DC.
Alex Barker is EU correspondent, covering the single market, financial regulation and competition. He was formerly an FT political correspondent in the UK and joined the FT in 2005.
James Fontanella-Khan is FT's Brussels correspondent, covering media, telecom and internet regulation as well as justice, employment and social affairs and its impact on eastern Europe. He was formerly an FT correspondent in India. He joined the FT in 2006.