European Commission

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. Read more

Tony Barber

GEORGES GOBET/AFP/GettyImages

Here is a startling prediction from the European Commission. In the absence of comprehensive economic reforms, living standards in the eurozone, relative to the US, will be lower in 2023 than they were in the mid-1960s.

This forecast, contained in the Commission’s latest quarterly report on the euro area economy, deserves to be displayed prominently on the wall of every president and prime minister’s office in Europe.

It is a sobering prediction for two reasons. First, it contrasts starkly with the comforting tales of economic recovery and financial market stability on which Europe’s leaders are congratulating themselves in these early weeks of 2014. Second, it raises profound questions about Europe’s relative weight in the world and, in particular, about its military alliance and economic partnership with the US. Read more

By Catherine Contiguglia
♦ A European Commission probe into competition and price fixing in the oil market is raising questions about how much power one man’s price reporting window can have on the market, and whether greater EC regulation might worsen the problem by discouraging the availability of oil prices altogether.
♦ The Chinese decision to ban milk imports from New Zealand due to fears that some batches could contain botulism has stoked fears of wider import bans on all foreign milk going into China.
♦ Cash-for-freedom deals in the US were originally designed to funnel in badly needed cash to law enforcement budgets from white collar crimes and drug cartels, but are giving rise to corruption and violations of civil liberties.
♦ Romance is being nationalised in South Korea, where the government is taking the lead in campaigns to introduce young singles at government-sponsored parties. Corporations are also increasingly encouraging relationships in the workplace as fears mount about the shortage of workers in an aging society.
♦ In countries where the government or market fails to meet citizens’ needs, the connectivity of social media and mobile technologies is allowing individuals to build their own representative platforms to meet them.  Read more

♦ In Qatar, the emir, voluntarily resigned in favour of his 33-year-old son, Sheikh Tamim bin Hamad al-Thani, as he spoke of the need for younger blood in government. This move is a sign that some monarchies are still more open to change than those in neighbouring countries like Saudi Arabia that have “hardened arteries.” Qataris debate whether Sheikh Tamim will follow in his father’s footsteps or take a more conservative, religious, or nationalistic stance, the FT reports.
♦ In Syria, the government and the rebels fight for control of the oil fields, and one gas and electricity plant is representative of the strife. Foreign Policy reports that Obama’s current strategy in Syria is contradictory, taking separate military and diplomatic courses that clash.
♦ If Edward Snowden were Chinese, Americans would respect him as a “brave dissident.”
♦ The European Commission raided the London offices of oil companies – BP, Shell and Norway’s Statoil – as well as Platts, the price reporting agency, for colluding to manipulate prices of oil on the international markets, the BBC reports.
♦ The US Supreme Court amended parts of the Voting Rights Act of 1965 – a measure that required mostly southern states to obtain Washington’s approval to change election practices because of discrimination against black voters – but some legislators now see it as an intrusion on state’s rights and no longer relevant – the Wall Street Journal and New York Times report. The Times sees this amendment as a usurpation of Congress and denial that discrimination still exists in the South on the part of the Supreme Court. For the New Yorker, it is all apart of the Republican’s systematic undermining of Democratic influence.
♦ In Foreign Affairs, the military historian Rick Atkinson gives a colourful depiction of London on the eve of D-Day. Read more

♦The US National Security Agency and the FBI are tapping directly into the central servers of nine leading internet companies. Glenn Greenwald, who broke the story for the Guardian, has been focused on government surveillance for years and the article is expected to attract an investigation from the justice department.
♦ Turkey is having its 1969, writes Ben Judah, and now it needs its Charles de Gaulle.
♦ Recep Tayyip Erdogan’s absence in Turkey this week has highlighted the difference in style between him and Abdullah Gul, the president.
♦ Ollie Rehn, the European Commission’s economic chief, has lashed out at the IMF’s criticism of the first Greek bailout, accusing the fund of revisionist history.
♦ What are the choices for Syrian citizens now? They are all grim and make the Geneva talks more urgent than ever, says Charles Glass.
♦ The humanities division at Harvard University is attracting fewer undergraduates amid concerns about the degree’s value in a rapidly changing job market. Read more

Gideon Rachman

One of this morning’s reports from the EU summit is headlined – “David Cameron fails to cut EU bureaucrats pay and perks“. With the EU budget talks collapsing on Friday afternoon, it appears to be true, at least for now. And it’s a great shame. I know that sentiment will deeply irritate my friends in the EU bureaucracy – some of whom have been emailing me to point out that spending on administration is a mere €6bn a year, which is less than 6% of total EU spending. Even so, there is plenty of waste in the EU budget that could be easily sliced away.

What is true is that one element of Cameron’s approach – which is to suggest a 10% cut in the budget for pay – is potentially too crude. Not all EU operatives are overpaid. Some of the lawyers, for example, have relatively modest salaries by private-sector standards. Rather than an across-the-board cut in pay it would be much more productive to start eliminating entire agencies, functions and perks. This would cut the payroll and the budget, while preserving the bits of the EU that actually do something useful. Here are some candidates for the chop. Read more

Esther Bintliff

José Manuel Barroso (R), who is set to unveil plans for a "banking union" on September 12, shown here in talks with German Chancellor Angela Merkel in June.

In times of crisis, a fast-forward button can be pressed on decisions that would usually take years of discussion and planning. So it is with the creation of a European ‘banking union’, which analysts at the Bruegel thinktank describe as an endeavour “in some respects no less ambitious and complex than the creation of monetary union itself”. The aim is to brace eurozone banks against future shocks by bringing them under a common regulatory and supervisory structure, introducing common deposit insurance and a shared system for crisis resolution. In June, José Manuel Barroso, president of the European Commission, told the FT he’d like to enact a banking union as soon as 2013. But is that really feasible? And what hurdles stand in the way?  Read more

Dr Jan Fidrmuc, Department of Economics and Finance and Centre for Economic Development and Institutions, Brunel University

Anti-austerity protestors take to the streets in central Athens earlier this year. Getty Images

Anti-austerity protestors take to the streets in central Athens earlier this year. Getty Images

Following the rejection of EU imposed austerity measures by the overwhelming majority of Greek voters, eurozone finance ministers have once again come to Brussels to try and save the single currency in what is being described as a ‘crucial 48 hours’.

Two thirds of the Greek electorate voted for parties opposed to the austerity measures required by the European Commission, ECB and IMF as a precondition of a further bailout; despite the outgoing government pledging to adhere to these measures.

Without compromise either by the Greeks accepting austerity measures or the EU offering concessions on the proposed package, another election is inevitable. In this case the bailout package will be suspended, Greece will default on its debt and an exit from the eurozone may follow. None of this will offer much respite for the struggling Greek economy.

In the past the EU offered concessions to voters having rejected EU treaties, however this time there is little political will, and not only in Germany, to offer sweeteners to the Greeks to help them swallow the bitter pill of fiscal adjustment.

Why then are the Greeks fighting against the support from the EU? And should the rest of the EU let them resist or should they be offered a sweeter deal after all?

 Read more

Tom Burgis

David Cameron arrives for the EU summit. Photo: Eric Feferberg/AFP

Welcome back to our live coverage of the eurozone crisis. By Tom Burgis and Kimiko de Freytas-Tamura on the  newsdesk in London, with contributions from FT correspondents around the world. All times are GMT.

A summit  in Brussels ended in deep division, with the UK refusing to back a new treaty for all 27 EU members and leaving the eurozone countries plus at least six others to forge ahead with a pact of their own to enshrine strict new rules on deficits and debt. It was meant to be the summit that would decisively chart a course out of the eurozone’s debt crisis. 

19.03 That’s the end of our live coverage today. We’ll leave you with a quick summary of the day’s developments. See FT.com for more news and analysis through the evening.

  • The European Union’s 27 leaders, minus David Cameron, struck a deal in the early hours to draw up a treaty by March that would bind them to strict new rules on debt and deficits, with automatic sanctions for countries that break them
  • The UK courted isolation as it refused to sign up to a treaty for all 27 members after David Cameron’s early-hours pitch for safeguards to protect UK financial services met a chilly reception from his counterparts
  • Markets were volatile before a tentative rally lifted equities in Europe and the US. The euro strengthened against the dollar but yields on Italian and Spanish bonds climbed once again
  • The IMF welcomed the European deal, which included €200bn for the fund to ensure it has enough cash to deal with any more fallout from the eurozone crisis, with Christine Lagarde, its head, saying she was “hopeful that others will also do their part”

 Read more