Euro roundup: European financial stabilisation mechanism and more…

Background: European financial stabilisation mechanism

by Grahnlaw

The Council of the European Union has issued COUNCIL REGULATION (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism; published OJEU 12.5.2010 L 118/1.

Once upon a time, I explored the stages leading towards the Lisbon Treaty, writing a number of blog posts about what became Article 122 of the Treaty on the Functioning of the European Union (TFEU).
Now that the EU member states have felt the need to shore up the common currency, it is interesting to see in which terms the provision on financial assistance was discussed at the time. In this blog post we look at the legislative history of Article 122 TFEU.

European financial stabilisation mechanism: Article 122 TFEU and legal base

by Grahnlaw

We started our topical discussion about Article 122 of the Treaty on the Functioning of the European Union (TFEU) by recalling the legislative history in the blog post Background: European financial stabilisation mechanism (13 May 2010).

Illiberal Democracy in France (And Beyond)

from The White Path

[Originally published in Hurriyet Daily News] I had coffee the other day with a colleague who told me why he had recently declined a job offer from a French media company. In fact, he was initially quite interested. The salary looked pretty decent, and the city where he would have to live, Lyon, seemed appealing. He even found a few nice possible schools there for his 10-year-old son. But then came the bad news from Lyon. “We would love to welcome your wife and child as well,” the employers said. “But, sorry, you can’t bring them for the initial 24 months.” This, they explained, was the result of a new “immigration law” the French Assembly had passed under the auspices of President Nicholas Sarkozy. After two years, they added, the benevolent French Republic would perhaps be kind enough allow the broken family to reunite. (Yes, not certainly, just perhaps.) “This is insane,” my friend wrote back to his would-be employers. And then he, quite wisely, declined to move to a country that seems to have little respect for the most quintessential human institution: the nuclear family.

French MPs condemn Islamic veil

from BBC News | Europe | World Edition
France’s parliament condemns the full Islamic face veil as an “affront to the nation’s values”.

Competitiveness in the EU: Who finished where and why?

by Grahnlaw

Somewhat uncharitably, as in earlier blog posts, in EU Reflection Group delivered report: Project Europe 2030 (10 May 2010) we spoke about the ?lost decade? of the EU?s Lisbon strategy for growth and jobs, and the next day, in Mario Monti: A new strategy for the single market, we said that the European Union and especially the member states had ?squandered? the decade of the Lisbon strategy.

The Eurozone is the new Europe, Tony Curzon Price

from open Democracy News Analysis – by Tony Curzon Price

Martin Wolf argues with usual clarity that the EU bail-out is a temporary measure: the Eurozone imbalance remains. The imbalance is between high-savings in Germany and high-borrowing in the south. Prices – wages, houses, consumer durables, everything, really –  in the Meditterranean rushed towards German-level prices; so borrowing looked cheap there. German domestic demand remained very depressed – no one really knows why Germans are not spending or investing their incomes domestically, but they’re not. If the south had not borrowed, there would have been recession in the south and lower export demand in Germany. Of course, the south should not have borrowed for the projects it did, and the banks should not have oiled the wheels of the whole thing with lashings of deception and wishful thinking. But the truth remains: the convergence of prices led to imbalance, and that has not changed. The magic of flexible exchange rates – abusable also, by the way – is that prices can be made to diverge so easily in the face of these sorts of pressures.

Time for Greece to play by the E.U.’s rules

from – Op-Ed Columns by Anne Applebaum
For the time being, the markets have been pacified. For the moment, the riots in Athens have subsided. Only “hundreds” of demonstrators came out over the weekend, fewer than the rioters who killed three people during a violent petrol bomb attack on a bank last week. But this temporary truce in Greece has been bought at a high price — by which I don’t just mean that it was expensive.

The burqa, Tariq Ramadan and French values

from Reset Dialogues on Civilazations
On April 2nd in Nantes, a 31-year-old woman wearing the niqab while driving her car was fined by the police for violating traffic laws. According to the policeman who stopped her, her attire did not permit her to ?drive comfortably.’ The result was a very lively debate with an angry exchange between Tariq Ramadan and Interior Minister Brice Hortefeux. The government?s anti-burqa draft law, however, has been welcomed positively by the Association for the Defence of Women?s Rights ?Ni putes, Ni soumises? (neither prostitutes nor submissive). Only a few days ago Belgium passed a law forbidding the full veil in all public places.

The 17th Member of the Eurozone: Estonia

from Stephen Spillane

Goodbye to Europe as a high-ranking power

from – World, Europe
Nato will no longer be the default partner for US foreign policy. Instead, America will forge coalitions of the willing to deal with specific challenges, writes Richard Haass

Greece?s Debt Crisis: Overview, Policy Responses, and Implications (PDF)

Source: Congressional Research Service (via Secrecy News/Federation of American Scientists)

Over the past decade, Greece borrowed heavily in international capital markets to fund government budget and current account deficits. The reliance on financing from international capital markets left Greece highly vulnerable to shifts in investor confidence. Investors became jittery in October 2009, when the newly elected Greek government revised the estimate of the government budget deficit for 2009 from 6.7% of gross domestic product (GDP) to 12.7% of GDP. In April 2010, Eurostat, the European Union (EU)?s statistical agency, estimated Greece?s deficit to be even higher, at 13.6% of GDP. Investors have become increasingly nervous about Greece?s ability to repay its maturing debt obligations, estimated at ?54 billion ($72.1 billion) for 2010. On April 23, 2010, the Greek government requested financial assistance from other European countries and the International Monetary Fund (IMF) to help cover its maturing debt obligations. This report analyses the Greek debt crisis and implications for the United States. The debt crisis has both domestic and international causes. Domestically, analysts point to high government spending, weak revenue collection, and structural rigidities in Greece?s economy. Internationally, observers argue that Greece?s access to capital at low interest rates after adopting the euro and weak enforcement of EU rules concerning debt and deficit ceilings facilitated Greece?s ability to accumulate high levels of external debt.

The End of Thatcherism, Anthony Barnett

from open Democracy News Analysis – by Anthony Barnett

This week’s creation of a Conservative led coalition with the Liberal Democrats has brought the period associated with Margaret Thatcher after her election in 1979 to an end. The UK will continue to play its part in global capitalism but a new kind of domestic politics is on offer. One way of describing it, uncomfortable as it may be for me to report, is that the transition from New Labour to a Tory led coalition promises a distinctly more progressive government in the UK. If indeed the Coalition agreement is carried out then the government will be to the left of its predecessor by being:

Europe view: Greece viewed from the region

by Edward Lucas


Default, and other dogmas
May 13th 2010

The experience of ex-communist countries in the 1990s undermines many of the claims now made about Greece

FOR anyone from the ex-communist world with a medium-term memory, the frantic efforts under way to save Greece (and the other wobbly southern members of the euro zone) are rather puzzling.

The Con/Lib Agreement on Europe

from Stephen Spillane
Cleveland (European Parliament constituency)Image via Wikipedia

My last post had a quick look at what the Con/Lib Agreement said on Political Reform. Now look at what should be a what the Agreement says on the EU. As a Euroblogger I probably should have done this first!

The UK will not join the Euro. No surprise there.

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