EURCP NEWS for PRAYER DECEMBER 2010

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MIDDLE EAST: FEAR OF THE FAST LANE

http://www.ft.com/cms/s/0/e6caf1aa-f80f-11df-8d91-00144feab49a.html#axzz179izUMmf

By Andrew England, Roula Khalaf and Lionel Barber

Published: November 24 2010 21:36 | Last updated: November 24 2010 21:36

 

 Ferrari driver Fernando Alonso practices on the Abu Dhabi grand prix track. While this month's race allowed the city-state to showcase its expensive infrastructure, the mood is more sober than before neighbouring Dubai's debt crisis

Tyres screeched; high-powered engines roared. Off the track, tycoons and celebrities flitted between corporate boxes and champagne bars.

[CONTINUED BELOW]

 

 

 

When the world Formula One carnival pulled into Abu Dhabi this month – bringing with it names such as entrepreneur Sir Richard Branson, actor Hugh Grant and footballer Patrick Vieira – the wealthy capital of the United Arab Emirates seized the opportunity to dazzle visitors with its showcase infrastructure. Latest additions include a Ferrari theme park boasting the world's fastest rollercoaster and the futuristic Yas hotel, which loops over the grand prix track. Beyond the glitz, however, the mood in Abu Dhabi is more sober. The buzz­words these days are "discipline" and "priorities" as the city-state tries to heed the lessons of the debt crisis encountered by Dubai, the sister emirate an hour and a half's drive away. As one long-time observer says only half-jokingly, "Abu Dhabi is feeling poor."

 

On the face of it, that seems a ridiculous statement. The emirate is home to 92bn barrels of oil – 7 per cent of the world's proved oil reserves – and one of the world's largest sovereign wealth funds, the Abu Dhabi Investment Authority (Adia). Last year, per capita income among its 1.6m-plus total population stood at $90,500, the fourth highest in the world. The UAE heavyweight has been on a development spree, with more than $300bn worth of infrastructure and property projects announced in recent years. It has also spent heavily on foreign investments, including stakes in western banks such as Citigroup of the US and Italy's Unicredit, in industrial companies including Daimler of Germany, and in Virgin Galactic, the Branson space tourism venture.>>> PRAYER FOCUS: PSALM 24 NIV

 

EU CENTRAL BANK - GOVERNMENTS NOT OFF HOOK, WARNS TRICHET

http://www.ft.com/cms/s/0/ce0ee7c4-fec8-11df-ae87-00144feab49a.html#axzz179i1Hv3f

By Ben Hall in Paris

Published: December 3 2010 11:34 | Last updated: December 3 2010 20:51

 

Jean-Claude Trichet, president of the European Central Bank, placed responsibility for containing the eurozone debt crisis firmly back with national governments on Friday, urging them to show more flexibility in their responses.

A day after the ECB launched its most extensive government bond purchases for several months to calm the markets, Mr Trichet made clear that national capitals had not been relieved of their responsibilities for short-term crisis management, or for longer-term measures to improve growth prospects.

 

The ECB's bond buying provided a much-needed respite after several tumultuous days in which government efforts – a financial rescue for Ireland and details of a permanent crisis resolution regime – failed to restore confidence.

If you would like to redistribute this article please respect FT.com's  ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited FT content. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/ce0ee7c4-fec8-11df-ae87-00144feab49a.html#ixzz17C4KJ71F

 

The central bank continued to intervene heavily in the eurozone bond markets on Friday, traders said, as the cost of borrowing for the so-called peripheral countries – Portugal, Greece, Ireland and Spain – fell again. The biggest interventions were in Portuguese bonds, which have seen yields – in effect the cost of borrowing – drop more than 1 percentage point since the start of the week to 5.94 per cent. Irish bond yields have fallen a similar amount to 8.20 per cent. In Paris, Mr Trichet gave a strong hint that eurozone governments should be prepared to increase the size of their emergency bail-out fund and consider other stabilisation measures as well as stepping up budgetary consolidation and economic reform. >>>PRAYER FOCUS - EUROPEAN CENTRAL BANK, PLACED RESPONSIBILITY FOR CONTAINING THE EUROZONE DEBT CRISIS FIRMLY BACK WITH NATIONAL GOVERNMENTS ON FRIDAY, URGING THEM TO SHOW MORE FLEXIBILITY IN THEIR RESPONSES.

 

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EU COUNCIL - CABLEGATE: VAN ROMPUY EXPECTS CANCUN TALKS TO FAIL

http://euobserver.com/9/31425/?rk=1

)ANDREW WILLIS

04.12.2010 @ 15:33 CET

 

EUOBSERVER / BRUSSELS – As UN climate talks in Cancun, Mexico, approach the half-way point this weekend (4-5 December), a US diplomatic cable released by WikiLeaks has revealed that European Council President Herman Van Rompuy had already "given up" on the multilateral meeting as far back as one year ago. In a discussion with US ambassador to Belgium Howard Gutman on 23 December 2009, Mr Van Rompuy reportedly said the Mexican talks were doomed to failure, while his chief of staff Frans Van Daele predicted they would end up looking like the second installment of a horror movie.

 

The one-hour meeting over coffee took place in Brussels' Justus Lipsius building, just days after UN climate talks in Copenhagen ended in fiasco. Mr Van Daele referred to the distant Mexican meeting as "Nightmare on Elm Street 2," before adding: "Who wants to see that horror movie again?" As the three men huddled in one of the vast building's many hundreds of rooms, Mr Van Rompuy made his position clear by stating: "multilateral meetings will not work."

 

 

EU PARLIAMENT - EU BODY EMPOWERED TO FINE RATING AGENCIES

http://www.ft.com/cms/s/0/7dc36f58-fe5d-11df-abac-00144feab49a.html#axzz179h69Tss

By Nikki Tait in Brussels

Published: December 3 2010 01:15 | Last updated: December 3 2010 01:15

 

A new pan-European supervisory authority will be able to impose fines directly on credit rating agencies that breach European Union rules under legislation agreed this week. The authority will be bound by certain thresholds and procedures, however, and will not have discretion over the amount of fines, according to EU officials. The maximum amount of any fine will be set at 20 per cent of an agency's turn­over.

 

A second tranche of legislation covering credit rating agencies was finally hammered out between representatives of the European parliament and member states on Wednesday night, although it is unlikely to be announced formally before Friday. The package is largely aimed at making the new European securities and markets authority responsible for supervising agencies operating in the EU.The follows a previous round of legislation, passed last year, which set standards for credit rating agencies and required them to register to do business in Europe for the first time. The new rules were drawn up in the wake of the 2007-2008 financial crisis, during which rating agencies were heavily criticised for failing to identify risks that were building up.>>>PRAYER FOCUS - A NEW PAN-EUROPEAN SUPERVISORY AUTHORITY WILL BE ABLE TO IMPOSE FINES DIRECTLY ON CREDIT RATING AGENCIES THAT BREACH EUROPEAN UNION RULES

 

EU COUNCIL - FRANCO-GERMAN BAIL-OUT PACT DIVIDES EU

http://www.ft.com/cms/s/0/56984290-df96-11df-bed9-00144feabdc0.html?ftcamp=rss#axzz179gi8vzx

By Joshua Chaffin and Peter Spiegel in Brussels

Published: October 24 2010 20:45 | Last updated: October 24 2010 20:45

 

As European heads of government prepare for a summit this week to approve budget rules to prevent another Greek-style crisis, resentment is simmering among some member states about how the proposals were drawn up.

After five months of sometimes heated debate, France and Germany last week agreed to water down a proposal to fine countries that fail consistently to reduce their debt levels.

 

The deal between Angela Merkel, German chancellor, and Nicolas Sarkozy, French president, gives national politicians more authority to delay or block such sanctions. But the anger in several eurozone countries, particularly the smaller, northern members that had pushed for even tougher rules, is not only over substance. The Franco-German deal was announced last Monday during a summit in France at the same time that national finance ministers were in Luxembourg holding their final negotiating session with Herman Van Rompuy, the European Union's permanent president, who chairs a task force formulating the new rules.

 

The political symbolism of the bilateral announcement has reopened resentments between small and large countries, and between fiscally restrained northern members and indebted southerners. "It's very strange that [France and Germany] felt, on exactly the same day Van Rompuy was finalising the report, that they had to symbolically tell everyone: 'We are running the show'," said Jean Pisani-Ferry, director of Bruegel, a Brussels-based think-tank.>>>PRAYER FOCUS - AS EUROPEAN HEADS OF GOVERNMENT PREPARE FOR A SUMMIT THIS WEEK TO APPROVE BUDGET RULES TO PREVENT ANOTHER GREEK-STYLE CRISIS

 

GREECE - S&P MULLS GREECE DOWNGRADE ON POSSIBLE EU TREATY CHANGE

http://online.wsj.com/article/BT-CO-20101202-715865.html

DECEMBER 2, 2010, 5:20 P.M. ET

By John Kell, Dow Jones Newswires

 

Standard & Poor's Ratings Services warned it was considering a further downgrade of Greece's junk-level ratings as it assesses a European Union treaty that would change the seniority of private-sector creditors. The ratings agency said the proposed change would result in a permanent crisis mechanism in which the European Stability Mechanism would rank ahead of private creditors in any future debt restructurings beginning in 2013. S&P said it believes assigning "preferred creditor" status to future official lending through the mechanism could be "detrimental to the ability of non-official holders of sovereign debt to be repaid." Since the details of the plan are still emerging, S&P put its BB+ long-term sovereign credit rating on Greece, which is at the highest level within junk, on watch for downgrade.

 

The move came just two days after the ratings agency expressed similar concerns about the impact of the EU's treaty on Portugal's ratings. Portugal's investment-grade ratings were placed on watch for downgrade Tuesday as economic pressures and increased risks to the government's creditworthiness were seen as concerns.  Greece has been working on its final 2011 budget as it stumbles through a second year of a grinding recession and amid a grim outlook for next year. Greece expects its gross domestic product to fall by 3% in 2011.

 

EU CENTRAL BANK -FIVE POTENTIAL WEAPONS FOR THE EUROZONE

http://www.ft.com/cms/s/0/d6e13bae-fd83-11df-a049-00144feab49a.html?ftcamp=rss&ftcamp=crm/email/2010122/nbe/BrusselsBrief/product#axzz16w2NKuMB

By FT reporters

Published: December 1 2010 20:16 | Last updated: December 1 2010 20:16

 

Jean-Claude Trichet (centre) arrives at the European Parliament to talk on policy. He says Europe's determination should not be underestimated. the eurozone crisis risks escalating out of control. Ireland's €85bn bail-out has failed to stop financial markets from sending borrowing costs sharply higher in Portugal, Spain and Italy. Investors remain wary of German demands that they should pay a high price in future rescue packages. The euro has fallen sharply.

 

The battle to shore up confidence is far from lost, however. The initiative was successfully regained back in May, when the dramas over Greece's public finances erupted into a full-blown crisis of confidence in Europe's monetary union. Then, governments agreed a €750bn ($983bn) rescue plan for future implosions, while the European Central Bank broke a taboo and started buying government bonds.

 

Now the region's top policymakers, such as Jean-Claude Trichet, president of the ECB, which holds a crucial meeting on Thursday, insist that Europe's determination should not be underestimated. The good news for eurozone leaders is they have a number of weapons to deploy if financial market sentiment does not turn soon; the bad news is that none would be easy to use. Political and legal objections complicate matters – not least in Germany, where any hint of subsidy or bail-out faces the threat of a challenge in the constitutional court.Here are some once-unthinkable options that could work – or have, at least, become less unthinkable than before.

 

1 Stepping up sharply ECB bond purchases

The euro's monetary guardian started buying bonds in May to correct dysfunctional markets, but after a few weeks the weekly amounts spent fell sharply. So far it has spent only €67bn. Fresh, larger purchases could quickly ease market tensions. A hint by Mr Trichet in the European Parliament earlier this week that the ECB was leaving its options open was enough to bring an improvement on Wednesday.

 

2 Increasing the size of the EU's rescue fund

If Portugal and Spain were to follow Ireland into a bail-out, that could eat up most – if not all – of the €750bn in the EU's bail-out mechanism, according to some analysts. The fund looks even smaller when the fine print is examined: any country that needs a bail-out is no longer able to back the largest pot of money in the system, the €440bn promised by the 16 eurozone members. So the €19.4bn committed by Greece and Ireland is already gone. Add to that the €63.4bn that Portugal and Spain have put up and suddenly close to €85bn is no longer available.

 

3 Issuing 'eurobonds'

The idea of eurozone countries issuing common bonds is being promoted by Jean-Claude Juncker, Luxembourg's prime minister, who chairs eurozone finance ministers' meetings. The advantage would be lower borrowing costs for "peripheral" economies and a greater sense of solidarity between countries sharing the euro. . . . 

 

4 Greater fiscal union

The eurozone has a single monetary policy but fiscal policy is split between 16 national finance ministries. There is scant chance a "fiscal union", which would require national legislatures to surrender rights to set budgets and raise taxes – cornerstones of parliamentary democracies. Berlin insists that national governments should bear responsibility for their own decisions.

 

5 Doomsday scenario

If none of the above works, talk could grow about the eurozone breaking up. But no eurozone policymaker seriously believes an exit by a country such as Greece would make its predicament any easier. Rather, leaving the monetary union would plunge Greece into a still greater crisis. Even if Germans became fed up with their neighbours, a return to the D-Mark would also be economically catastrophic; the currency would soar, pricing its exporters out of business. >>>PRAYER FOCUS -

 

 

CHRISTIAN DOCTOR FORCED OFF ADOPTION PANEL GOES TO EU COURT OF JUSTICE

http://www.lifesitenews.com/ldn/2010/nov/10111603.html

By Hilary White

LONDON, November 16, 2010

 

(LifeSiteNews.com) – A British Christian pediatrician has applied to be heard at the European Court of Justice after she was forced out of her position on the Northamptonshire County Council Adoption Panel because of her belief that adoptive children are best off placed with a mother and a father. Sheila Matthews, a physician with 18 years experience, is being represented in her legal challenge by human rights barrister Paul Diamond and the Christian Legal Centre.

Matthews has mounted the legal challenge to determine whether professional medical advice regarding the child's "best interests" is "negated" by "homosexual rights." Her case was heard before an Employment Tribunal in Leicester yesterday. The 50-year-old doctor was removed from the panel after she asked to be allowed to abstain from voting when children were being placed with homosexual partners. She was allowed to continue providing medical advice to the Council but not to participate fully in the Panel process. She told the Tribunal that after her dismissal, her contribution to adoption work by the Council was "increasingly reduced and her experience disregarded."

 

This March, Dr. Matthews resigned from her job as a community pediatrician, saying that she felt she could no longer work somewhere where she was "denied the opportunity to fully use her professional skills," according to a statement released by the religious rights campaign group, Christian Concern for Our Nation.

 

 

MEDIA FREEDOM DECLINING IN ENLARGEMENT COUNTRIES [FR]

http:// www.euractiv.com/en/enlargement/media-freedom-declining-enlargement-countries-news-499627?utm_source=EurActiv+Newsletter&utm_campaign=ebc74cf24d-my_google_analytics_key&utm_medium=email

Published: 11 November 2010 | Updated: 16 November 2010 

 

Political pressure, threats and lawsuits against media and journalists are commonplace in EU candidate countries and other membership hopefuls, the European Commission's enlargement reports revealed on Tuesday (9 November).

"Freedom of expression and of the media, which is an integral part of any democratic system, remains a concern in most enlargement countries," Enlargement Commissioner Štefan Füle warned, unveiling the Commission's 'Enlargement Strategy' at a press conference.

 

 

POLISH, CZECH LEADERS VOW TO DEFEND EU REGIONAL AID [FR] [DE]

http://www.euractiv.com/en/regional-policy/polish-czech-leaders-vow-defend-eu-regional-aid-news-499457?utm_source=EurActiv+Newsletter&utm_campaign=2b8ae53b57-my_google_analytics_key&utm_medium=email

Published: 05 November 2010

 

 The prime ministers of Poland and the Czech Republic have declared that they will not accept any cuts in the amount of financial support that is provided to Central and Eastern European countries in the framework of the European Union's regional policy. t'Member states are starting to set out their positions on the size and shape of the European Union's budget in the coming years.This is in anticipation of difficult negotiations, due to start next year, on the so-called Multi-Annual Financial Framework (MAFF) for the next seven-year period, which will begin in January 2014.

 

NEXT STEPS

10 Nov. 2010: European Commission to publish 5th Report on Economic and Social Cohesion.

Mid-2011: Commission to propose Multiannual Financial Framework outlining details of EU budget allocations.

2012-2013: EU to finalise budget for 2014-2020.

Links

 

 

COMMISSION TO UNVEIL €1 TRILLION ENERGY STRATEGY FOR 2020 [FR] [DE]

http://www.euractiv.com/en/energy/commission-unveil-1trln-energy-strategy-2020-news-499502?utm_source=EurActiv+Newsletter&utm_campaign=89b4a2839d-my_google_analytics_key&utm_medium=email

Published: 08 November 2010 

 

The European Commission will present on Wednesday (10 November) its energy strategy for the coming decade, calling for investment of around €1 trillion to secure the bloc's energy needs in a sustainable way.This will require the EU to spend €1 trillion over the next decade on infrastructure, new technologies and electricity storage, according to a draft, seen by EurActiv. "In the next decade, investment in energy, both to replace existing resources and in order to meet increasing energy requirements, will oblige European economies to arbitrate among energy products which, given the inertia of energy systems, will condition the next 30 years," it says.

BACKGROUND

 

 

MERKEL POURS COLD WATER ON 'EU TAX' PROPOSAL [FR] [DE]

http://www.euractiv.com/en/priorities/merkel-pours-cold-water-eu-tax-proposal-news-499399

Published: 03 November 2010 | Updated: 04 November 2010

 

German Chancellor Angela Merkel has rejected a proposal by the European Commission to introduce an EU-level tax to help fund the Union's budget after 2013. The German chancellor was speaking in Brussels after a meeting with Belgium's caretaker premier Yves Leterme, whose country currently holds the rotating EU presidency.The Commission recently presented a number of options to fuel the EU's future budget, which is currently overwhelmingly funded by direct contributions from the member states.An EU value-added tax (VAT), a tax on air transport or a share of new financial, corporate or energy taxes are among the proposals put forward by Brussels as a way to decrease its dependence on national contributions. With national governments having to make big public spending cuts, the Commission hopes these options will be considered when negotiations open next year on the EU's long-term budget for 2014-2020. Currently, three quarters of the EU's budget comes directly from national governments. 12% comes from import duties from non-EU countries and the remaining 11% is a fixed percentage of each member state's VAT income.

Next Steps

Mid-2011: Commission to propose Multiannual Financial Framework outlining details of EU budget allocations.

2012-2013: EU to finalise budget for 2014-2020.

 

DOES THE 21ST CENTURY REALLY BELONG TO CHINA?

Subject: In tonight's programme

From: newsnight@ebs.bbc.co.uk

Monday 8 November 2010 at 10.30 pm on BBC Two

Presented by Jeremy Paxman

 

If the size of the trade delegation he is leading to Beijing this week - comprising of four senior ministers, 50 business leaders, and the Chancellor of the Exchequer George Osborne, who is already there - is anything to go by, David Cameron seems to think so. Tonight, Paul Mason reports on the Chinese threat to US global hegemony and we will be joined in the studio by a supporter of China as an economic powerhouse, and another who is much less of a fan.