Daily Digest: France and Italy steps up their new alliance

At a joint press conference yesterday in Rome french president Francois Hollande and Italian prime minister Mario Monti hammered home their common positions to save the euro through growth policies, debt mutualisation and development of a eurozone bailout fund. This happens just before series of international summits will be held in the coming two weeks. They avoided any direct confrontation with the german chancellor Angela Merkel, although the line they hammered home is quite far from the believes of Angela Merkel.

In the german parliament, Der Bundestag, Angela Merkel held a speech yesterday. She stood firm on her policies for the rescue of the eurozone, and also underlined that the german economy isn’t strong enough to save the eurozone. The speech was not received well by the french prime minister Jean-Marc Ayrault, who warned Angela Merkel against “simplistic talk”. At the same time the german weekly magazine published an article yesterday saying that the German economy is getting even stronger as the eurozone crisis continue, as their government bonds gets more and more attractive.

In Greece the economy is far from strong. Yesterday new figures was released on the unemployment rate in Greece, and they’ve hit another sad record. Greece’s unemployment rate rose to 22.6 percent in the first quarter of 2012 from 20.7 percent in the previous three-month period. The eurogroup is preparing what they will do, when the Greek election is finished. The finance ministers of the 17 euro countries will be ready if necessary to hold an urgent teleconference on Sunday evening. But the coming Greek government should not rise their hopes for big renegotiations talks on their debt deal.

The mood in Spain continues to decline. After the debt deal that Marioano Rajoy made with the other eurozone countries on Sunday the risk of a spanish rescue program like the ones made for Greece, Ireland and Portugal gets more and more likely. Yesterday the country’s 10-year bond yield rose sharply and briefly topped 7 per cent. A level considered to have triggered bailouts for the other three countries.

The EU Parliament is has decided to suspend cooperation with the council on five areas in the justice and home affairs regulation after a twist with the danish presidency over new rules that is to be implemented in the Schengen agreement, and which the EU Parliament didn’t get a possibility to join as co-lawmaker. This is viewed as a big minus in the handling of the danish presidency, that although did reach some success yesterday, when they succeeded with one of their head priorities – a new deal on energy efficiency.

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