Brussels

Tony Barber

It’s time to say “thank you” to Herman Van Rompuy.

Mr Van Rompuy, 66, is nearing the end of five years as the first full-time president of the European Council, which groups the 28-member EU’s national leaders. He has done the job shrewdly, unselfishly, professionally and without losing sight of the ideal of European peace, democracy, prosperity and unity that motivated him to enter public life. 

Gideon Rachman

Guy Verhofstadt (Nicolas Maeterlinck/AFP/Getty)

The three main candidates to be the next head of the European Commission are now clear: Martin Schulz will be the left’s candidate; Guy Verhofstadt will be the standard-bearer for the liberals; and Jean-Claude Juncker will be the candidate of the centre-right, having apparently secured the all-important backing of Angela Merkel. (The German chancellor’s office has declined to confirm officially that Merkel is backing Juncker – but press reports, including in the FT, seem pretty certain.)

The most striking thing about this list is how very traditional it is. The EU has just been through a wrenching crisis that has raised questions about its very survival. And it is also now a club of 28 countries. But the three main candidates for Commission president are all traditional European federalists – drawn from the six founding member states. 

Welcome to a live blog of events in Brussels as European leaders meet for a second day to discuss how far and fast to push integration of fiscal and economic systems in the 27-country bloc. Ben Fenton in London is watching.

 

14.46: And that seems an appropriately grim note on which to end live-blog coverage of the EU council summit, a meeting of which few had high expectations and yet most observers seem still to have come away disappointed.

Until next time.

14.34: Courtesy of Reuters, we have a jolly Christmas message from Chancellor Merkel:

“One reason I am careful with my forecasts is the adjustment process, the changes that we are going through are very difficult and painful.”

(Picture: AFP/Getty)

“Next year, and the ECB president said this, we will have very low growth rates, we will see negative growth in some countries, and we can expect very high unemployment levels to continue.”
“On the one hand we have accomplished a lot. But we also have tough times ahead of us that can’t be solved with one big step. There has been lots of talk about the one step, whether it be a debt haircut, euro bonds or some other measure that will solve everything. That won’t be the case.”

 

Tony Barber

Photo by Adam Berry/Getty Images

An anti-ACTA activist in Berlin. (Adam Berry/Getty Images)

With all eyes on the eurozone crisis (and Barclays), it is easy to overlook other events in Europe which, in their own way, are just as important. I have in mind yesterday’s vote by the European parliament to reject the Anti-Counterfeiting Trade Agreement (Acta), an international accord aimed at cracking down on copyright theft.

From all sorts of angles this was a landmark vote. It was the first time that the European Union’s legislature had exercised its right, granted under the EU’s 2009 Lisbon treaty, to block ratification of an international agreement negotiated by the European Commission and approved by EU governments.

Some might call the vote an excellent illustration of why EU policy makers should never have given this blocking power to the European parliament in the first place.

Others, however, will see the vote as a welcome expansion of democratic control over the EU executive and national governments. This seems to be the sense of a statement issued by France’s ruling Socialist party, which hailed “a new inter-institutional balance of power” in Europe and “the active participation of citizens in the European debate”. 

Angelos Tzortzinis/Bloomberg

Welcome back to our continuing coverage of the eurozone crisis. By Esther Bintliff on the world news desk in London, with contributions from FT correspondents around the world. All times GMT.

 

18.45 That’s all from the live blog for tonight, but you can keep up to date with all the latest news and analysis on FT.com. We’ll leave you with a summary of events today:

  • Investors holding 85.8 per cent of Greece’s private debt agreed to participate in the country’s €206bn debt restructuring
  • The Greek cabinet approved the use of collective action clauses (CACs), to force recalcitrant investors who own bonds under Greek law to take part in the swap
  • Once the CACs are activated, participation will rise to 95.7 per cent, the level that Greece’s troika of lenders say is necessary if the country is to cut its debt to 120 per cent of GDP by 2020
  • Eurozone finance ministers held a conference call, in which they agreed to release up to €35.5bn ($47bn) in bailout funds to help fund the debt swap
  • Spanish trade unions voted for industrial action at the end of March
  • And finally, the International Swaps and Derivatives Association began their meeting at 13.00 to discuss whether the debt swap constitutes a credit event, which would trigger credit default swaps. At the time of writing, we still didn’t know the answer.

 

Welcome back to our live coverage of the eurozone crisis. By Tom Burgis and Esther Bintliff on the news desk in London with contributions from our correspondents around the world. All times GMT.

18.58 That’s about it for the live blog today. Follow FT.com through the evening for all the news from the summit and analysis of the day’s developments. Before we go, a quick recap:

  • Eurozone finance ministers held back more than half of Greece’s €130bn bail-out on the grounds that Athens has yet to jump through all the hoops lined up by its international creditors. That money could be released as soon as next week, though, and the ministers did sign off on a package of incentives and instruments to underpin a debt restructuring deal with private investors in Greek bonds
  • ISDA, the industry body that decides what is and is not a “credit event”, ruled that the Greek debt restructuring does not constitute one – or not yet, at any rate. That means that $3.25bn of credit default swaps on Greek government bonds do not pay out – unless ISDA comes to a different view at a later date. The decision could have significant knock-on effects in the market for CDS, which serve as insurance against a sovereign default.
  • There was more fallout from the Irish plan to hold a referendum on the eurozone’s fiscal compact, following the resignation of Fianna Fail’s deputy leader – and an apparent threat to execute a kitten (see 15.22)
  • Unemployment in the 17-member eurozone jumped to an all-time high of 10.7 per cent in January, new data showed
  • Spain held another successful bond auction and Italian yields fell too

And we leave you with a little light reading on the travails of Greece and one line — perhaps unfair, given today’s progress — that’s been raising wry smiles on Twitter.

[blackbirdpie url="https://twitter.com/#!/sickipediabot/status/169089627783827457"]

18.55 As expected, Herman Van Rompuy is elected for another term as president of the European Council.

[blackbirdpie url="https://twitter.com/#!/euHvR/status/175291547821158401"]

18.18 Now the finance ministers have done their work — well, some of it — it’s over the Europe’s leaders for the summit proper. Once again, all lenses on Germany’s Angela Merkel.

Angela Merkel arrives at the EU summit

Angela Merkel arrives at the EU summit in Brussels (Photo: AP)

17.58 Earlier, Bill Gross, the manager of Pimco, the world’s largest bond fund, was to be heard fulminating against ISDA’s decision not to deem the Greek restructuring a “credit event”, thereby preventing credit default swaps from paying out (15.27).

Our hawk-eyed colleagues at FT Alphaville have, however, been studying the list of the ISDA members that voted unanimously against calling a credit event. Check the last name….

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From the FT’s Brussels Blog:

Over the last 24 hours, a flurry of activity has taken place surrounding Greece’s €200bn debt restructuring, most of it expected but some of it potentially destabilising. Because the moves involve highly technical – but still significant – judgements by occasionally obscure groups, Brussels Blog thought it was time for another guide to what to watch for in the ensuing days.

The most eye-catching announcement was the one made last night by Standard & Poor’s declaring Greece to be in “selective default”. Luxembourg prime minister Jean-Claude Juncker, chair of the group of eurozone finance ministers, put out a statement saying the move was “duly anticipated” – and he’s right. S&P signalled this way back in June when the first talk of a Greek restructuring began.

 

Euro banknotes placed on a map of Greece. Photo: Dado Ruvic, ReutersWelcome to our live coverage of the eurozone crisis, by Esther Bintliff and John Aglionby on the world news desk in London with contributions from correspondents from around the world. All times are London time.

Hopes for the unveiling of a “comprehensive plan” to resolve the eurozone crisis at this weekend’s summit of European leaders have been squashed this afternoon. “No agreements” will be made, officials told the FT, until a second summit, which will probably take place on Wednesday.