Author Archives: Mikkel

Daily Digest:
Increased European debt despite austerity

According to new data from Eurostat yesterday, European debt has increased despite austerity measures. Some of the countries that have made the most progress in closing their budget gaps — Greece, in particular — have also had their overall debt loads actually get bigger as a percentage of the economy, the data show. A recent report from the International Monetary Fund has also reached a similar conclusion. The economies of the debt-stricken countries of Greece, Portugal, Ireland and Spain have contracted sharply under the austerity measures, while the size of the debts relative to economic output has soared. Still, the Greek government is trying hard to work out a €13.5 billion austerity package; negotiations with their international lenders continued yesterday, and the European Commission said they hoped an agreement would be made within days.

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Daily Digest:
Calls for integration at EU summit

The leaders of the 27 EU member states are meeting for a two-day summit in Brussels today to discuss ways to stem the debt crisis. The talks in Brussels are expected to focus on banking supervision, stricter fiscal oversight and direct recapitalisation of banks from rescue funds. Before the summit, Germany has been urging EU states to consider pooling more economic sovereignty. German Finance Minister Wolfgang Schaeuble has proposed a full fiscal union – control at European level of tax and spending. Yesterday, French President Francois Hollande said an end to the eurozone crisis was “very close” and he wanted a deal agreed on the first stage of a banking union.

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Daily Digest:
IMF chief urges two-year extension on Greek budget targets

Managing Director of the International Monetary Fund Christine Lagarde says Greece should be given an extra two years to meet its budget targets. At a press conference yesterday, Lagarde said that “This is what we advocated for Portugal, it’s what we advocated for Spain, and it’s what we’re advocating for Greece”. German Finance Minister Wolfgang Schäuble criticised the IMF chief’s comments, saying that Lagarde contradicts the IMF’s own stance when appealing for an ease on austerity measures, since they have “time and again” warned that high debt levels threatened economic growth. “When there is a certain medium-term goal, it doesn’t build confidence when one starts going in a different direction”, Schäuble said. “When you want to climb a big mountain and you start climbing down the mountain, then the mountain will get even higher”, he explained.
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Daily Digest:
Commission report halts EU accession talks with Serbia and Turkey

The European Commission’s annual report on countries who want to join the EU criticises both Serbia and Turkey. In the case of Serbia, the new report says that the country cannot begin accession talks with the EU until it deals with its problematic relationship with Kosovo. Serbian Prime Minister Ivica Dacic criticises the report for referring to ‘territorial integrity’, saying it would have been more honest to ask Serbia to recognise an independent Kosovo, which Belgrade does not. The report criticises Turkey for a recent poor relationship with the EU, as well as the situation with Turkey and Cyprus, which is divided into Greek and Turkish parts, and is the current holder of the EU Presidency. Turkey only recognises the breakaway state in the north. Also, the report expressing worries over civil liberties and human rights issues in Turkey. Turkey is also disappointed in the report, and their EU Minister Egemen Bagis blames the lack of movement on EU member Cyprus. “Unfortunately, despite all our efforts, we greet this year’s EU progress report with utmost disappointment, particularly the part about political criteria,” Bagis says.
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Daily Digest:
French Parliament approves EU fiscal treaty

The European budget discipline treaty was approved by a large majority in the lower house of the French Parliament in a vote yesterday. This was of great relief to French President Francois Hollande, whose party and its leftist allies in the Assembly passed the measure without needing the votes of the center-right. It was feared that center-right votes would be necessary to pass the treaty, and that would have been an embarrassment for the President. France is expected to ratify the treaty by the end of the week.

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