New York Stock Exchange on August 4, 2011. Image by AFP
In a sign of the severity of this week’s market turbulence, Olli Rehn, Europe’s economics commissioner, has cut short his holiday and will be back in Brussels today. Rehn is to address the press corps at midday – presumably to undo some of the damage caused by an explosive letter penned by his boss, José Manuel Barroso, the European Commission president.
In his letter – which was sent to the eurozone heads of government on Wednesday, but released to the press on Thursday – Barroso acknowledged that the big decisions taken at a eurozone summit on July 21 were not having the intended effect on financial markets. He also called for a “rapid reassessment” of the eurozone’s €440bn bailout fund just two weeks after leaders had armed it with new weapons following a torturous, months-long debate. Read more
The analysis piece we ran in yesterday’s paper about the threat populism poses to European integration has gotten so much feedback, that I thought I’d post more on the interview I had with Dutch European affairs minister Ben Knapen, which helped inspire it.
As mentioned in the original piece, Knapen is highly critical of officials — including José Manuel Barroso, the president of the European commission — who argue that populist sentiments should be marginalised or ignored by European leaders. Instead, he thinks Brussels should take such concerns more seriously than they are now.
In fact, Knapen singled out Barroso in our interview, which Dutch officials tell me is a bit of pushback to recent comments Barroso made urging European leaders to “not give in to the populists or extremists” in upcoming EU budget negotiations, remarks picked up by the Dutch press. Said Knapen: Read more
For those looking for a break from Osama bin Laden news, Brussels Blog is keen to tout our scoop today on the forthcoming European Commission proposal on migration, and how it’s expected to suggest allowing countries to re-impose border controls when they’re overwhelmed by illegal immigrants.
Although some diplomats had been concerned about a new round of demagoguery over the issue, the decision by José Manuel Barroso, the Commission president, to embrace calls for overhauling Europe’s visa-free Schengen area rules appears designed to turn the debate into a technocratic one over when and where such controls can be reinstituted.
In a letter over the weekend to Nicolas Sarkozy and Silvio Berlusconi, the French and Italian leaders whose dispute over North African immigrants has put the issue back in the spotlight, Barroso acknowledged the “temporary restoration of borders is a possibility” he was considering, but emphasised the devil is in the details: Read more
It has been more than a week since European presidents and prime ministers signed off on a raft of measures to shore up the eurozone’s debt-ridden peripheral economies, but so far the markets haven’t responded the way most leaders hoped – particularly in Portugal, where the ongoing political turmoil has driven borrowing costs to euro-era records just as the country needs to dip back into the market.
There have also been some rather unusual public recriminations from top European Union leaders who feel the so-called “grand bargain” did not go far enough, including Jean-Claude Trichet, president of the European Central Bank, and José Manuel Barroso, the European Commission president. Read more
On Monday, we had a scoop on a new effort by the European Union’s two presidents, José Manuel Barroso and Herman Van Rompuy, to revive a “pact for competitiveness” – an economic coordination scheme among the 17 eurozone countries that would entail significant new austerity measures. Read more
In today’s paper, we have a story about the history of bad blood between Russian prime minister Vladimir Putin and European Commission president José Manuel Barroso, an account based on dozens of US diplomatic cables that we got our hands on thanks to WikiLeaks.
The two men are summiting today in Brussels, so we thought it would be worth posting the full text of a cable from the US embassy in Moscow detailing the last time the two men summited in February 2009. Although we have redacted the names of the officials who briefed US diplomats, they included a senior European Commission official and a top diplomat in Russia’s ministry of foreign affairs. Read more
José Manuel Barroso, European Commission president, tells Peter Spiegel, Brussels bureau chief, that he is confident an agreement over what to do with the euro will be reached when the eurozone member states meet at a summit in March. Read more
Here at the Brussels blog, we’re keeping a close eye on the run-up to next Friday’s rare one-day summit of European Union heads of government. And nothing is occupying more of our attention than whether leaders will actually tackle the ongoing eurozone crisis at the conclave.
One of the events that had been closely monitored by the tea-leaf readers was Tuesday night’s private dinner outside Berlin between the two main antagonists in the debate, José Manuel Barroso, president of the European Commission, and Angela Merkel, the German chancellor.
According to people we have talked to, however, there was little meeting of the minds. Even though the dinner lasted for well over three hours – and almost all of it was occupied by discussions of economic policy – there is still no agreement on whether to put reforms touted by Barroso, including a revamp of the EU’s €440bn bail-out fund, on next week’s agenda. Read more
The EU’s final two-day heads of government summit of 2010 starts Thursday and early betting is that it will be much quieter than the last time the 27 leaders assembled in Brussels, a gathering that set off a bond market panic which the continent is still recovering from.
The main event will be Thursday night, when the leaders are expected to sign off on a brief change in the EU’s treaty to allow for the creation of a new financial rescue system to replace the current, temporary €750bn bail-out fund.
There is still some nervousness that Angela Merkel, the German chancellor, may push for additional language in the text to make explicit that the new bail-out system can only be accessed as a “last resort,” or ultima ratio in Latin, the phrase being used by the cognoscenti.
But Merkel did not mention the ultima ratio demand in her list of principles before the Bundestag Wednesday, and there seems to be little appetite among other members to let her bulldoze the new language in – particularly since it could cause more confusion among bond traders, who might wonder what all the other resorts are before the last one. Read more
Among the hundreds of confidential US diplomatic cables disclosed by WikiLeaks thus far, very few have dealt with Washington’s relations with the EU. But occasionally, EU leaders have popped up in summaries of other international events in which they have only tangentially been involved.
The most pointed EU-related revelation to be released thus far comes in a 2008 cable from the American embassy in Moscow following French President Nicolas Sarkozy’s heated September 8 confrontation with Russian Foreign Minister Sergei Lavrov over the Kremlin’s invasion of Georgia.
The US account of the “at times…openly hostile” meeting, where Sarkozy “at one point grabbed FM Lavrov by the lapels and called him a liar in very strong terms,” has been reported widely. Less noticed, however, was Moscow’s reception of José Manuel Barroso, the European Commission president.
In a section labeled secret and “noforn,” meaning it was not to be shown to non-American officials, an unnamed French source retells how “the Russians treated Barroso harshly and condescendingly, and tried to exclude him from many of the sessions.” Read more