What to expect from the EU in 2013 As many had expected, 2012 turned out to be a busy and volatile year for European politics and economics, with the eurozone crisis hitting new depths and political tensions rising accordingly. Can we expect the same in 2013? Open Europe lays out its view on three key topics to watch in 2013 discussions of a Brixit, the formulation of the new eurozone banking union and, of course, the continuation or otherwise of the eurozone crisis.
Open Europe's Head of Economic Research Raoul Ruparel said,
Next year is not only likely to see domestic politics across the EU clash with the economic realities of the eurozone crisis and EU integration, but also countries increasingly being pitted against one another.
Despite talk of a recovery, growth is set to stall and unemployment rise across the continent. But with the easing of the immediate crisis and growing domestic unrest, we could easily see eurozone leaders put off the big decisions on the future of the eurozone.
To read the full document, What to expect from the EU in 2013, click on the link below:
http://www.openeurope.org.uk/Content...s/EUin2013.pdf
Executive Summary
Section 1: The eurozone crisis survival but stagnation
If 2012 saw a full on crisis in the eurozone, 2013 is likely to be a year of economic stagnation and political uncertainty, with low growth and high unemployment continuing to plague many countries. There will be fewer threats to the eurozones existence than in 2012, but the fundamental flaws in the structure of the eurozone remain, and progress towards solving them is likely to continue to be slow. Italy, Spain and France face funding costs of 332bn, 195bn and 243bn respectively, which will keep markets on edge. On this front, liquidity from the ECB and the potential activation of its bond buying programme, the OMT, will help soothe fears in the first half of the year at least.
However, politics will be the name of the game. In order to get to the OMT, Spain and others will have to go through the ESM, meaning approval by parliaments in several creditor countries including Germany. This could trigger unexpected delays and tensions. Italy, Germany and Austria are also facing important elections, with it being far from clear that the Italian elections, in particular, will produce a stable, pro-reform government. In addition, Portugal, Slovenia and Cyprus could also be forced to seek more financial aid, while the Greek political scene remains very fragile amid growing austerity-fatigue. In combination, political tensions, particularly between the creditors and recipients, could suddenly flare up.
Verdict: A calmer, but still painful year for the eurozone, with several political flashpoints that could quickly trigger a fresh flare-up in the crisis. The eurozone is unlikely to fully turn the corner.
Section 2: Banking union slow or even slower?
As the eurozones flagship solution to the crisis, the banking union will continue to be at the forefront of discussions and disagreements in 2013. The set timetable which includes a decision on the resolution fund in 2013 will likely fall foul of political wrangling, with direct recapitalisation of eurozone banks by the ESM already pushed back until after the German elections.
Verdict: A decision on the second step of the banking union a joint fiscal backstop is unlikely to be taken amid continued disagreements and domestic pressures.
Section 3: Britain in the EU a mid-life crisis or full divorce?
On 1 January, the UK will have been an EU member for 40 years, but the relationship is becoming increasingly complicated. A British exit from the EU became a topic of mainstream discussion in 2012 and will continue to be a front-page issue in 2013, with UKIP on the rise and European elections approaching. Though Cameron may not have to seek parliamentary approval for any major EU issue in 2013, there will be tense discussions both within the Coalition and the Conservative party about how to tackle demands for a new relationship with Europe. In his forthcoming Europe speech scheduled for mid-January Cameron could well frame the choice for Britain in Europe as one between renegotiation and Brixit, though may still shy away from promising a concrete referendum. The two issues to watch are how many EU crime and policing laws the UK will remain signed up to, which could be decided next year, and whether Cameron can present a deal on the long-term EU budget as a success.
Verdict: No fundamental changes to the relationship, but positioning and political manoeuvring will set the stage for the 2014 and 2015 elections that in turn could decide the exact nature of the EU-UK relationship in the future.
Berlusconi: Italys technocrats have bowed to EU demands;
Todays final vote on 2013-15 budget law clears the way for Montis resignation
In a radio interview this morning, Silvio Berlusconi said, technocrats have bowed to the demands of the EU especially the German and Northern EU which only lead to recession. Its not only my opinion, but also that of several Nobel Prize winners. Meanwhile, the lower chamber of the Italian parliament is set to give its final approval to the budget law for 2013-15 this evening, clearing the way for Italian Prime Minister Mario Montis resignation. Open Europes Raoul Ruparel is quoted by the Telegraph arguing that Italy still has a long way to go on labour market reform.
Il Sole 24 Ore Corriere della Sera Il Sole 24 Ore 2 Repubblica 2 Telegraph Repubblica La Stampa Corriere della Sera 2 La Stampa 2
Open Europes briefing on what to expect from the EU in 2013 is cited by City AM, the Guardians live blog and Greek business daily Capital.
Open Europe: EU in 2013 City AM Capital Guardian live blog
New estimates published by Frances national statistics office INSEE show that the French economy is to grow by only 0.1% in the first half of 2013. The French government expects the economy to grow by 0.8% next year, notes La Tribune.
La Tribune
Officials deny talk of IMF calls for debt write-down in Cyprus
Standard and Poors has downgraded Cyprus by two notches. Süddeutsche Zeitung reported that the IMF has said that it will not participate in the Cypriot bailout package unless there is a write-down of Cypriot debt. The report was denied by European officials, with Eurogroup Chairman Jean-Claude Juncker telling German radio Deutschlandfunk, I assume a haircut wont be among the measures used I would like to rule that out from my side. Handelsblatt reports that the ECB has voiced its opposition to a debt write-down for Cyprus.
WSJ EUobserver Süddeutsche FAZ Welt EUobserver 2 Il Sole 24 Ore Welt Handelsblatt
Former Taoiseach John Bruton writes in the Irish Times, Obviously if the UK leaves the EU, it would negotiate some sort of new relationship with it But what sort of relationship?...If the UK wanted to prevent EU immigrants entering the UK through the Republic , it would have to introduce passport controls on the Irish border.
Irish Times: Bruton
Writing in the Times, Philip Collins argues that the unsolvable conundrum of David Camerons upcoming Europe speech is that when it comes to renegotiation, It is not obvious that there is any shared point between what his backbench MPs want and what his European counterparts are prepared to allow.
Times: Collins
The FT reports that, ahead of Latvias euro entry, public opinion in the EUs other Central and Eastern European member states is turning against the single currency. The paper cites Czech Prime Minister Petr Necas as saying that the country would only join after 2020 subject to a referendum, and an opinion poll in Poland showing that 56% of Poles are opposed to joining.
FT WSJ
The Spanish central governments deficit reached 4.37% of GDP at the end of November. The target agreed with the EU for 2012 is 4.5% of GDP including the social security system. Spanish Deputy Budget Minister Marta Fernández Currás yesterday admitted it will be difficult to meet the target, reports El País.
El País EUobserver FAZ Expansión Cinco Días El Economista Reuters España
Reports from Greek banks Eurobank and Piraeus Bank show they will need 13bn in capital as they continue to struggle with losses from the Greek debt restructuring earlier this year although this is in line with estimates by the Greek central bank.
WSJ Kathimerini Kathimerini 2
Catalan President-elect Artur Mas is set to win his investiture vote in the Catalan parliament today, with the support of the left-wing ERC party.
La Vanguardia El País
Bron: politics.be
Open Europe's Head of Economic Research Raoul Ruparel said,
Next year is not only likely to see domestic politics across the EU clash with the economic realities of the eurozone crisis and EU integration, but also countries increasingly being pitted against one another.
Despite talk of a recovery, growth is set to stall and unemployment rise across the continent. But with the easing of the immediate crisis and growing domestic unrest, we could easily see eurozone leaders put off the big decisions on the future of the eurozone.
To read the full document, What to expect from the EU in 2013, click on the link below:
http://www.openeurope.org.uk/Content...s/EUin2013.pdf
Executive Summary
Section 1: The eurozone crisis survival but stagnation
If 2012 saw a full on crisis in the eurozone, 2013 is likely to be a year of economic stagnation and political uncertainty, with low growth and high unemployment continuing to plague many countries. There will be fewer threats to the eurozones existence than in 2012, but the fundamental flaws in the structure of the eurozone remain, and progress towards solving them is likely to continue to be slow. Italy, Spain and France face funding costs of 332bn, 195bn and 243bn respectively, which will keep markets on edge. On this front, liquidity from the ECB and the potential activation of its bond buying programme, the OMT, will help soothe fears in the first half of the year at least.
However, politics will be the name of the game. In order to get to the OMT, Spain and others will have to go through the ESM, meaning approval by parliaments in several creditor countries including Germany. This could trigger unexpected delays and tensions. Italy, Germany and Austria are also facing important elections, with it being far from clear that the Italian elections, in particular, will produce a stable, pro-reform government. In addition, Portugal, Slovenia and Cyprus could also be forced to seek more financial aid, while the Greek political scene remains very fragile amid growing austerity-fatigue. In combination, political tensions, particularly between the creditors and recipients, could suddenly flare up.
Verdict: A calmer, but still painful year for the eurozone, with several political flashpoints that could quickly trigger a fresh flare-up in the crisis. The eurozone is unlikely to fully turn the corner.
Section 2: Banking union slow or even slower?
As the eurozones flagship solution to the crisis, the banking union will continue to be at the forefront of discussions and disagreements in 2013. The set timetable which includes a decision on the resolution fund in 2013 will likely fall foul of political wrangling, with direct recapitalisation of eurozone banks by the ESM already pushed back until after the German elections.
Verdict: A decision on the second step of the banking union a joint fiscal backstop is unlikely to be taken amid continued disagreements and domestic pressures.
Section 3: Britain in the EU a mid-life crisis or full divorce?
On 1 January, the UK will have been an EU member for 40 years, but the relationship is becoming increasingly complicated. A British exit from the EU became a topic of mainstream discussion in 2012 and will continue to be a front-page issue in 2013, with UKIP on the rise and European elections approaching. Though Cameron may not have to seek parliamentary approval for any major EU issue in 2013, there will be tense discussions both within the Coalition and the Conservative party about how to tackle demands for a new relationship with Europe. In his forthcoming Europe speech scheduled for mid-January Cameron could well frame the choice for Britain in Europe as one between renegotiation and Brixit, though may still shy away from promising a concrete referendum. The two issues to watch are how many EU crime and policing laws the UK will remain signed up to, which could be decided next year, and whether Cameron can present a deal on the long-term EU budget as a success.
Verdict: No fundamental changes to the relationship, but positioning and political manoeuvring will set the stage for the 2014 and 2015 elections that in turn could decide the exact nature of the EU-UK relationship in the future.
Berlusconi: Italys technocrats have bowed to EU demands;
Todays final vote on 2013-15 budget law clears the way for Montis resignation
In a radio interview this morning, Silvio Berlusconi said, technocrats have bowed to the demands of the EU especially the German and Northern EU which only lead to recession. Its not only my opinion, but also that of several Nobel Prize winners. Meanwhile, the lower chamber of the Italian parliament is set to give its final approval to the budget law for 2013-15 this evening, clearing the way for Italian Prime Minister Mario Montis resignation. Open Europes Raoul Ruparel is quoted by the Telegraph arguing that Italy still has a long way to go on labour market reform.
Il Sole 24 Ore Corriere della Sera Il Sole 24 Ore 2 Repubblica 2 Telegraph Repubblica La Stampa Corriere della Sera 2 La Stampa 2
Open Europes briefing on what to expect from the EU in 2013 is cited by City AM, the Guardians live blog and Greek business daily Capital.
Open Europe: EU in 2013 City AM Capital Guardian live blog
New estimates published by Frances national statistics office INSEE show that the French economy is to grow by only 0.1% in the first half of 2013. The French government expects the economy to grow by 0.8% next year, notes La Tribune.
La Tribune
Officials deny talk of IMF calls for debt write-down in Cyprus
Standard and Poors has downgraded Cyprus by two notches. Süddeutsche Zeitung reported that the IMF has said that it will not participate in the Cypriot bailout package unless there is a write-down of Cypriot debt. The report was denied by European officials, with Eurogroup Chairman Jean-Claude Juncker telling German radio Deutschlandfunk, I assume a haircut wont be among the measures used I would like to rule that out from my side. Handelsblatt reports that the ECB has voiced its opposition to a debt write-down for Cyprus.
WSJ EUobserver Süddeutsche FAZ Welt EUobserver 2 Il Sole 24 Ore Welt Handelsblatt
Former Taoiseach John Bruton writes in the Irish Times, Obviously if the UK leaves the EU, it would negotiate some sort of new relationship with it But what sort of relationship?...If the UK wanted to prevent EU immigrants entering the UK through the Republic , it would have to introduce passport controls on the Irish border.
Irish Times: Bruton
Writing in the Times, Philip Collins argues that the unsolvable conundrum of David Camerons upcoming Europe speech is that when it comes to renegotiation, It is not obvious that there is any shared point between what his backbench MPs want and what his European counterparts are prepared to allow.
Times: Collins
The FT reports that, ahead of Latvias euro entry, public opinion in the EUs other Central and Eastern European member states is turning against the single currency. The paper cites Czech Prime Minister Petr Necas as saying that the country would only join after 2020 subject to a referendum, and an opinion poll in Poland showing that 56% of Poles are opposed to joining.
FT WSJ
The Spanish central governments deficit reached 4.37% of GDP at the end of November. The target agreed with the EU for 2012 is 4.5% of GDP including the social security system. Spanish Deputy Budget Minister Marta Fernández Currás yesterday admitted it will be difficult to meet the target, reports El País.
El País EUobserver FAZ Expansión Cinco Días El Economista Reuters España
Reports from Greek banks Eurobank and Piraeus Bank show they will need 13bn in capital as they continue to struggle with losses from the Greek debt restructuring earlier this year although this is in line with estimates by the Greek central bank.
WSJ Kathimerini Kathimerini 2
Catalan President-elect Artur Mas is set to win his investiture vote in the Catalan parliament today, with the support of the left-wing ERC party.
La Vanguardia El País
Bron: politics.be