Eurowatch: Growth meet, Greek woes, Spain pain

While SYRIZA leasder Alexis Tsipras wasn’t able to form a Greek government, the results of Sunday’s elections in Greece, France, and Italy coupled with more troubling economic news from Spain has left the European Union’s boss reeling.

Leaders to meet on growth, austerity

If there were any doubts about the role of social media in today’s rapidly evolving European political scene, consider that the head of the European Union apparently tweeted news of an upcoming summit.

From Ekathemerini:

The president of the European Union, Herman Van Rompuy called an extraordinary meeting of heads of state on Tuesday, setting the date for Wednesday, May 23.

The focus of the meeting is expected to be a discussion on measures to boost growth in stagnant economies.

Rompuy said on Twitter that the meeting would be an “informal dinner,” where it is expected that the heads of the EU’s member states will present their ideas for moving away from austerity-based policies to growth-enhancing measures as criticism grows of the EU’s approach to the crisis in the bloc.

More from EurActiv:

Following  the election of French socialist President François Hollande, the European Commission has tacked firmly towards the growth agenda and called for a new industrial revolution for Europe.

After an anti-austerity backlash by voters in Greece and France on Sunday (6 May), European Council President Herman Van Rompuy called yesterday (8 May) an informal summit of EU leaders for May 23 to discuss the growth agenda.

The informal dinner on May 23 will lay the ground for another meeting on June 28-29 when leaders are to take formal decisions on their growth and budget consolidation strategy.

“The debate of consolidation versus growth is a false debate,” EU Economic and Monetary Affairs Commissioner Olli Rehn told a news briefing. “In the current economic situation of low growth and high debt there is no choice – we need to pursue both simultaneously.”


Commission President José Manuel Barroso said that each of the member states would bring their own plans for growth to the informal meeting, but also pledged that the Commission would prepare an over-arching paper on the issue for discussion at the meeting.

Read the rest.

Here’s more from Barroso from Greek Reporter’s Stella Tsolakidou:

With regard to the mainly anti-austerity orientated votes of the Greek people, European Commission President Jose Manuel Barroso stated today that there are “no alternatives” left for those EU countries who have received international credits but to follow through with the set austerity measures and simultaneously boost growth.

According to dpa cited by Europe Online, Barroso told reporters in Brussels that “the program countries, they have no alternative – except disorderly default, which I think is not an alternative – than to pursue courageous fiscal consolidation measures,” adding that growth and consolidation are both equally essential to exit the crisis.

In the meantime, president of CDU’s Federal Committee on Foreign and Security Policy in Germany, Rupercht Polenz, warned that the Troika will demand an interlocutor on behalf of Greece before the next bailout tranche will be disbursed.

In his interview to the German Television, Polenz noted that Greece is in the immediate need of an effective government. He also pointed out that political experience has shown so far that repeated elections in a short period of time inevitably lead to destabilized relations and could further enhance extreme positions. According to the German official, the austerity package must be seen as a help package, without which Greece would stand even less chances of escaping the economic meltdown.

Read the rest.

Here’s what’s got them scared

While SYRIZA wasn’t able to form a government, the demands raised by Tsipras had to send chills down eurocratic spines.

Here’s the list from Keep Talking Greece:

Saying that “3 million voters rejected the austerity-bailout”, Tsipras revealed the his party’s conditions for future government coalitions:

  1. Immediate annulment of the austerity measures, especially those concerning wages and pensions cuts
  2. Annulment of austerity programme provisions that exterminate workers’ rights.
  3. Moratorium for the debt repayment.
  4. Immediate changes to election law [50-seats bonus] and annulment of the law protecting ministers from being accountable.
  5. Public control of the banks and immediate release of the Blackrock report.
  6. Establishment of an international committee to audit the public debt.
  7. Cooperation [on the] European level.

Read the rest.

Meanwhile, European Commission sets up shop in Athens

Given the mood of the Athens electorate, one has to wonder what sort of welcome the city’s newest residents will get.

From ANSAmed:

The European Commission’s task force leader in Athens, Horst Reichenbach, and his team are to set up office in Regulatory Authority for Energy (RAE) building in the central Athens district of Gazi in the coming days – the first step toward establishing a permanent presence in Greece that the country’s international creditors have demanded, Kathimerini reported.

Reichenbach’s team, which currently comprises about 10 officials responsible for monitoring the implementation of reforms that Greece has pledged its foreign lenders, is to be boosted considerably, to an initial total of 40, sources said. The entire team is to be put up at RAE’s headquarters as a midway solution until permanent offices are found, according to sources who told Kathimerini that the prospect has met with vehement opposition from employees at the regulatory authority.

Read the rest.

While others think about departing

Like Metka, a Greek industrial giant, builders of big, complex metal things, ranging from power plants to high tech buildings and other unnamed things for the defense sector.

From ANSAmed:

Evangelos Mytilineos, the president of one of Greece’s biggest business groups, Mytilineos, expressed his worry about political instability in Greece and warned he might move his flagship company METKA out of the country as daily Kathimerini reports. Mytilineos suggested that the seat of the electrical energy plant construction company could move as ‘’its Greek origin’‘ is causing problems to efforts to bolster its competitiveness in the international market.

‘’We are retaining our Greek origin until further notice,’‘ said Yiannis Mytilineos, METKA’s chairman and chief executive, as he addressed shareholders. He also confirmed that there is pressure from institutional investors, analysts and company officials for a change of domicile.

Read the rest.

Serbia to get socialist leader?

We used the question mark in a dual sense, since the deal is still in negotiations, and we’re not sure what “socialist” means in this case, given the use of the word by French, Greek, and other European parties.

From EurActiv:

Either in coalition with the pro-European Democratic Party of outgoing President Boris Tadic’ or with the Progressive Party of former ultranationalist Tomislav Nikolic’, Socialist leader Ivica Dac(ic’ sees himself as the country’s next prime minister. EurActiv Serbia reports.

General elections held in Serbia on 6 May have confirmed that the Serbian Progressive Party and the Democratic Party enjoy the biggest popular support, but that both would likely need to in coalition with the Socialist Party of Serbia to form a government.

The coalition bringing together the Socialists, United Serbia and the Party of United Pensioners of Serbia has positioned itself won about 15% of the vote, making it the third strongest in the country. Thanks to this, the group now has a very good negotiating position and will probably decide who will form the next Serbian government.

Read the rest.

And a comic proves the joke’s on Monti

Beppo Grillo’s both a comedian and a political force in Italy, when he launched the Five Star political movement, some thought it was just another of his jokes.

But Mario “Three-card” Monti, the bankster-installed prime minister, probably isn’t laughing these days.

From Corriere della Sera:

Parma produced a significant result as the Centre-left’s candidate Vincenzo Bernazzoli emerged from the poll well ahead on 39.3% but behind him was Beppe Grillo’s Five Star Movement with Federico Pizzarotti on 19.47%. It was a similar story at Genoa, where Marco Doria, who won 48.39%, can watch a neck-and-neck race between the Third Pole candidate Enrico Musso (14.9%) and the Grillo movement’s Paolo Putti (13.9%) with returns from fewer than twenty polling stations still to come in. Early forecasts put Mr Putti in front but whatever the outcome, the coalition vote puts the Grillo movement in second place, confirming its excellent showing. Centre-right candidate Pierluigi Vinai straggled in fourth. The good result obtained by the Grillo movement in Verona also deserves mention while at Sarego in the neighbouring Veneto province of Vicenza, Roberto Castiglion became the Five Star Movement’s very first mayor. He was rewarded with a congratulatory tweet from Beppe Grillo.

Read the rest.

More from euronews:

Grillo’s party picked up 20 percent of ballots cast in Parma, beating Silvio Berlusconi’s centre-right People Of Freedom.

The movement also won as much as 15 per cent in Genoa, embarrassing mainstream parties that support the country’s technocratic government.

Pier Luigi Bersani, the leader of the centre-left Democratic Party, said he would continue to support Prime Minister Mario Monti, despite the message from voters and his party’s heavy losses.

“I just hope Monti listens a bit more,” he said.

Read the rest.

And here’s Grillo with a victory statement in his own words, with English subtitles:

And Monti plays a two-card hand

What with a socialist [sic] elected president of France, a guy German Chancellor Angela Merkel made a fuss of disfavoring, the banksters’ gift to the Italian people thinks he can make himself a real player, even after getting Gillo-ed.

From EurActiv:

Even after the victory of socialist François Hollande, German Chancellor Merkel and politicians of her conservative CDU fiercely refuse renegotiating the fiscal pact. But there could be a way to compromise, as Hollande receives support from Italian premier Mario Monti.

German Chancellor Angela Merkel’s congratulations to the new French president could have been warmer: She will co-operate well and intensively with Hollande, she assured during a press conference in the Berlin headquarters of the Christian Democrats. After all, the Franco-German co-operation is “essential  for Europe”, goes the traditional argument.

Merkel’s foreign minister Guido Westerwelle sounded more enthusiastic. He is not well-known for his foreign language skills but he prepared two sentences in broken French to congratulate Hollande: “Félicitations pour le nouveau Président,” he said. “L’Europe, c’est notre destin commun,” he added.

Read the rest.

I’m outta here, Sarko tells inner circle

Given that he was the least popular president in modern times, seems like a good career move.

Besides, we suspect he won’t lack for lucrative sources of income.

From France 24:

Nicolas Sarkozy looks set to leave the world of politics behind him after being ousted from power in Sunday’s presidential election runoff.

After failing to convince a majority of French voters to back his re-election bid Sarkozy became the first president since 1981 to be voted out of office after serving just one term.

After accepting defeat on Sunday night in front of his impassioned followers Sarkozy said he would never again run for the presidency.

And according to right-wing French daily Le Figaro, Sarkozy, who had the lowest popularity ratings of all previous presidents, will be leaving the rough and tumble of French politics for good.

Le Figaro, which is close to the Sarkozy camp, reported on Monday that the defeated president had gathered together the bigwigs of his UMP party to confirm the news of his departure.

Read the rest.

Pope okays Portugese holiday cuts

Yep, in Portugal, the pope has a say in government policy.

So call it austerity with an imprimatur.

From the BBC:

Portugal has taken austerity measures to a new level with the decision to scrap four of its 14 public holidays.

Two religious festivals and two other public holidays will be suspended for five years from 2013.

The decision over which Catholic festivals to cut was negotiated with the Vatican.

Portugal has already cut public sector wages and raised taxes to reduce its budget deficit and deal with its economic crisis.

The country agreed a 78bn euro bailout deal with the European Union, European Central Bank and International Monetary Fund last year and recently passed the latest review of its spending cuts.

It is hoped the suspension of the public holidays will improve competitiveness and boost economic activity.

The four days affected are All Saints Day on 1 November; Corpus Christi, which falls 60 days after Easter; 5 October, which commemorates the formation of the Portuguese Republic in 1910; and 1 December, which marks Portuguese independence from Spanish rule in 1640.

Read the rest.

The pain in Spain, til debt does them part

Investors have become so wary of the economic implosion underway in France that only the government’s debt funding agency can win any cash out of the market.

From Emma Ross-Thomas of Bloomberg:

Prime Minister Mariano Rajoy said the debt agency is the only borrower left in Spain that can finance itself on markets as banks, companies and regional administrations have been shut out.

“Today, the Treasury is practically the only one that finances itself on the markets,” he said in the Senate in Madrid today. Being locked out of debt markets isn’t “theoretical” as it’s “happening to the immense majority of regions, our whole financial sector and most big companies.”

Rajoy once again raised the threat of an international bailout as he seeks to convince Spaniards to accept spending cuts even as unemployment approaches 25 percent. His comments also underline the challenge the government faces as it tries to overhaul the banking industry without overburdening public finances.

Rajoy, in power since December, declined to answer a question from reporters as he left the Senate on how much public money may be needed to shore up Bankia, the lender with the biggest Spanish asset base and 38 billion euros ($49 billion) of real-estate assets.

Read the rest.

Think maybe some folks with deep pockets are salivating at the thought of buying up the Spanish commons when the inevitable happens?

Spain sort of nationalizes a bank

And it’s a bank created from merging other busted-out banks.

From the BBC:

Troubled Spanish lender Bankia is to be partly nationalised, the central bank has confirmed.

Bankia, which holds 32bn euros (£25.7bn) in distressed property assets and whose boss has resigned, will have a 4.47bn-euro loan by the Spanish bailout fund converted into shares.

The state fund will emerge with a stake in the bank of 45%.

Earlier, Spanish stocks fell by 3% and government bond yields rose above 6%, a level seen as unsustainable.

“The new management of Bankia will have to submit, as soon as possible, a fortified clean-up plan that will place it in a position to address its future with every guarantee of success,” the Spanish central bank said.

Bankia has the industry’s largest exposure to the property market, which burst spectacularly and has saddled its banks with bad debt.

Spain’s fourth-biggest bank was only created in 2010 from a merger of seven struggling savings banks.

Read the rest.


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