Cyprus awaits eurozone approval of drastic moves to restructure banking sector; Cypriot Finance Minister returns empty-handed from Russia Last night, the Cypriot government presented the parliament with plans to split its second largest bank, Laiki bank, into a good and bad bank. The WSJ reports that the good assets, along with insured deposits below 100,000, would be transferred to the good bank which would be merged with the Bank of Cyprus. Bad assets along with uninsured deposits over 100,000 would be transferred to the bad bank, with these deposits potentially taking losses of between 20% and 40%. The government suggested the move could cut 2.3bn from the cost of recapitalising Cypriot banks although it would still leave 3.5bn to be raised. The main option had been the nationalisation of pension fund assets or gas linked government bonds in a solidarity fund. However, German Chancellor Angela Merkel told the Bundestag this morning that these were not acceptable options, according to Reuters. Bild reports that German Finance Minister Wolfgang Schäuble is also sceptical of the proposals.
The Eurogroup released a statement saying it stood ready to discuss the new draft proposals with Cyprus, suggesting it was not involved in their creation, adding they were subject to EU/IMF/ECB Troika approval. The WSJ reports that the relationship between the Cypriot government and the Troika has soured significantly. The Cypriot government also submitted six other bills, including one which would allow it to impose stricter capital controls on banks once they open in an attempt to stop an outflow of deposits. The parliament was due to debate and vote on the bills this morning, but the sitting has been delayed until this evening. Reports of capital controls and bank restructuring sparked large demonstrations outside the Cypriot parliament and long queues at cash machines across the country.
Cypriot Finance Minister Michalis Sarris is returning from Russia today empty-handed, with Russia not keen to invest in Cypriot banks or its gas reserves, although there is an agreement to extend the current loan and reduce the rate. A wider agreement may still be reached but Russia is likely to wait until after Cyprus strikes a deal with the eurozone. Open Europes Raoul Ruparel is quoted by Spanish News Agency EFE discussing Russias role in the Cypriot bailout negotiations. Open Europes blog analysis of the latest Cypriot proposal was cited by the Telegraphs and Guardians live blogs, CNN Money and several Greek and Cypriot outlets. Open Europes Pieter Cleppe was interviewed by Belgian daily De Standaard.
Kathimerini reports that the Greek government is preparing legislation to protect depositors in Cypriot banks in Greece in the event that Cyprus leaves the euro or its banks collapse. This includes allocating up to 600m to aid depositors. Maltese Finance Minister Edward Scicluna writes in the Times of Malta that last weekends bailout deal then rejected by the Cypriot parliament was achieved with a pistol to head.
Open Europe blog Open Europe blog 2 FT FT 2 CityAM WSJ WSJ 2 WSJ 3 Kathimerini Kathimerini 2 Kathimerini 3 Euractiv Euractiv 2 BBC Telegraph IHT IHT 2 Guardian EUobserver El País El Mundo La Tribune Expansión Reuters Sun Bild Süddeutsche FAZ Welt Süddeutsche FAZ Welt FAZ Mail Kathimerini 4 Kathimerini 5 Kathimerini 6 FT 3 FT 4 Times Times: Analysis Irish Times Guardian 2 EFE CNN Money Christian Science Monitor Times of Malta De Standaard: Cleppe
Open Europe Berlin Director Michael Wohlgemuth is quoted by the Economist in an article looking at the new German anti-euro party Alternative für Deutschland.
Open Europe blog Economist
MEPs vote to impose stricter bonus caps on fund managers than for bankers
MEPs on the European Parliaments Economic and Monetary Affairs Committee yesterday voted to cap investment fund managers bonuses at a 1:1 ratio to their salary. The move comes a day after the EU agreed to limit bankers bonuses, but the proposed cap on fund managers pay would be even stricter. The proposals now need to be voted on by all MEPs before negotiations with national ministers.
Open Europe Research Director Stephen Booth is quoted in the Times and the Telegraph as saying, To lump investment fund managers, which havent received a penny in taxpayer bailouts, in with the bankers makes little economic sense. He added, Given how crucial the fund manager industry is to the UKs financial services, if this does go through it could turn the City of London into a hotbed of euroscepticism and make it far more difficult for the UK Government to defend EU membership. Jon Terry, partner in PwCs reward team, said fund managers are now facing the toughest pay rules across the whole of the financial services sector.
Open Europe research: financial services Times Telegraph FT EP press release
Raoul Ruparel: The ECB is playing a risky game over Cyprus ultimatum
In City AM, Open Europes Raoul Ruparel looks at the ECBs threat to stop providing liquidity to Cypriot banks absent an EU/IMF bailout programme and argues, The issue comes down to the ECBs credibility, and extending without a bailout deal would undermine this. This would be a particularly toxic debate in Germany ahead of Septembers federal elections Its clear the good folks in Frankfurt are becoming ever more embroiled in a highly-political debate exactly where they did not want to be.
City AM: Ruparel FAZ: Bernau FT: Joffe Economist: Charlemagne WSJ: Fidler Economist: Leader Economist FT Editorial Times: Analysis Times: Leader
A new Bundesbank study shows that average household assets in Spain and France are significantly higher than in Germany 285,000 and 229,000 respectively compared with 195,000.
FAZ Welt
Following the first round of talks between party leaders and Italian President Giorgio Napolitano, several Italian papers suggest centre-left leader Pier Luigi Bersani will today be asked to form the new government but will be given 3-4 days to prove he can get enough support from other parties in the upper house of the Italian parliament, where he does not command a majority.
Repubblica La Stampa La Stampa 2 Corriere della Sera FT WSJ
The WSJ notes that Markits composite Purchasing Managers Index (PMI) for the eurozone which measures activity in the manufacturing and services sectors fell to 46.5 in March from 47.9 in February, further below the threshold of 50 that separates growth from contraction.
FT City AM WSJ
In an interview with Süddeutsche Zeitung ahead of todays informal meeting with his EU counterparts, German Foreign Minister Guido Westerwelle hinted that Germany might consider relaxing the EUs arms embargo on the Syrian opposition. Wed be prepared to adapt our policy to a changed situation, he said.
Süddeutsche
MEPs have alleged that the EUs anti-fraud office OLAF told key witnesses in the investigation of former EU health commissioner John Dalli to lie, EUobserver reports.
EUobserver European Voice
Dutch MPs have obtained the right to consult EU documents to which their access was previously restricted. The Dutch government has also revealed how many documents from the European Council and the Council of Ministers were given the classifications EU restricted, EU confidential, EU secret and EU top secret.
Dutch government document De Dagelijkse Standaard
The Telegraph reports that the UKs Wine and Spirit association has questioned the legality of the UKs cut in beer duty under EU law.
Open Europe blog
Bron: politics.be
The Eurogroup released a statement saying it stood ready to discuss the new draft proposals with Cyprus, suggesting it was not involved in their creation, adding they were subject to EU/IMF/ECB Troika approval. The WSJ reports that the relationship between the Cypriot government and the Troika has soured significantly. The Cypriot government also submitted six other bills, including one which would allow it to impose stricter capital controls on banks once they open in an attempt to stop an outflow of deposits. The parliament was due to debate and vote on the bills this morning, but the sitting has been delayed until this evening. Reports of capital controls and bank restructuring sparked large demonstrations outside the Cypriot parliament and long queues at cash machines across the country.
Cypriot Finance Minister Michalis Sarris is returning from Russia today empty-handed, with Russia not keen to invest in Cypriot banks or its gas reserves, although there is an agreement to extend the current loan and reduce the rate. A wider agreement may still be reached but Russia is likely to wait until after Cyprus strikes a deal with the eurozone. Open Europes Raoul Ruparel is quoted by Spanish News Agency EFE discussing Russias role in the Cypriot bailout negotiations. Open Europes blog analysis of the latest Cypriot proposal was cited by the Telegraphs and Guardians live blogs, CNN Money and several Greek and Cypriot outlets. Open Europes Pieter Cleppe was interviewed by Belgian daily De Standaard.
Kathimerini reports that the Greek government is preparing legislation to protect depositors in Cypriot banks in Greece in the event that Cyprus leaves the euro or its banks collapse. This includes allocating up to 600m to aid depositors. Maltese Finance Minister Edward Scicluna writes in the Times of Malta that last weekends bailout deal then rejected by the Cypriot parliament was achieved with a pistol to head.
Open Europe blog Open Europe blog 2 FT FT 2 CityAM WSJ WSJ 2 WSJ 3 Kathimerini Kathimerini 2 Kathimerini 3 Euractiv Euractiv 2 BBC Telegraph IHT IHT 2 Guardian EUobserver El País El Mundo La Tribune Expansión Reuters Sun Bild Süddeutsche FAZ Welt Süddeutsche FAZ Welt FAZ Mail Kathimerini 4 Kathimerini 5 Kathimerini 6 FT 3 FT 4 Times Times: Analysis Irish Times Guardian 2 EFE CNN Money Christian Science Monitor Times of Malta De Standaard: Cleppe
Open Europe Berlin Director Michael Wohlgemuth is quoted by the Economist in an article looking at the new German anti-euro party Alternative für Deutschland.
Open Europe blog Economist
MEPs vote to impose stricter bonus caps on fund managers than for bankers
MEPs on the European Parliaments Economic and Monetary Affairs Committee yesterday voted to cap investment fund managers bonuses at a 1:1 ratio to their salary. The move comes a day after the EU agreed to limit bankers bonuses, but the proposed cap on fund managers pay would be even stricter. The proposals now need to be voted on by all MEPs before negotiations with national ministers.
Open Europe Research Director Stephen Booth is quoted in the Times and the Telegraph as saying, To lump investment fund managers, which havent received a penny in taxpayer bailouts, in with the bankers makes little economic sense. He added, Given how crucial the fund manager industry is to the UKs financial services, if this does go through it could turn the City of London into a hotbed of euroscepticism and make it far more difficult for the UK Government to defend EU membership. Jon Terry, partner in PwCs reward team, said fund managers are now facing the toughest pay rules across the whole of the financial services sector.
Open Europe research: financial services Times Telegraph FT EP press release
Raoul Ruparel: The ECB is playing a risky game over Cyprus ultimatum
In City AM, Open Europes Raoul Ruparel looks at the ECBs threat to stop providing liquidity to Cypriot banks absent an EU/IMF bailout programme and argues, The issue comes down to the ECBs credibility, and extending without a bailout deal would undermine this. This would be a particularly toxic debate in Germany ahead of Septembers federal elections Its clear the good folks in Frankfurt are becoming ever more embroiled in a highly-political debate exactly where they did not want to be.
City AM: Ruparel FAZ: Bernau FT: Joffe Economist: Charlemagne WSJ: Fidler Economist: Leader Economist FT Editorial Times: Analysis Times: Leader
A new Bundesbank study shows that average household assets in Spain and France are significantly higher than in Germany 285,000 and 229,000 respectively compared with 195,000.
FAZ Welt
Following the first round of talks between party leaders and Italian President Giorgio Napolitano, several Italian papers suggest centre-left leader Pier Luigi Bersani will today be asked to form the new government but will be given 3-4 days to prove he can get enough support from other parties in the upper house of the Italian parliament, where he does not command a majority.
Repubblica La Stampa La Stampa 2 Corriere della Sera FT WSJ
The WSJ notes that Markits composite Purchasing Managers Index (PMI) for the eurozone which measures activity in the manufacturing and services sectors fell to 46.5 in March from 47.9 in February, further below the threshold of 50 that separates growth from contraction.
FT City AM WSJ
In an interview with Süddeutsche Zeitung ahead of todays informal meeting with his EU counterparts, German Foreign Minister Guido Westerwelle hinted that Germany might consider relaxing the EUs arms embargo on the Syrian opposition. Wed be prepared to adapt our policy to a changed situation, he said.
Süddeutsche
MEPs have alleged that the EUs anti-fraud office OLAF told key witnesses in the investigation of former EU health commissioner John Dalli to lie, EUobserver reports.
EUobserver European Voice
Dutch MPs have obtained the right to consult EU documents to which their access was previously restricted. The Dutch government has also revealed how many documents from the European Council and the Council of Ministers were given the classifications EU restricted, EU confidential, EU secret and EU top secret.
Dutch government document De Dagelijkse Standaard
The Telegraph reports that the UKs Wine and Spirit association has questioned the legality of the UKs cut in beer duty under EU law.
Open Europe blog
Bron: politics.be