In a crucial test for both Angela Merkel and the future of the European bailout, the bundestag has approved plans to extend the powers of the European Financial Stability Facility (EFSF). Five-hundred and twenty-three deputies in the Bundestag approved the bill, 85 voted against and three abstained in the 620-seat chamber. The enhanced powers of the EFSF is likely speed up plans for a permanent European Monetary Fund. Estonia, Malta, Netherlands, Cyprus, Slovakia and Portugal still have to approve the plans, but Germany’s vote is likely to have set the precedent. Separately, the European parliament yesterday voted overwhelmingly in favour of the so-called “six-pack” series of laws to impose tougher budgetary discipline on the eurozone’s 17 members and help to prevent the flare-up of future sovereign debt crises. The six-pack gives the European Commission new powers to slap fines on countries that flout rules on racking up high public debts and deficits.
Both developments may go some way towards reassuring the US, which has been piling on pressure to solve the eurozone crisis as soon as possible. Alongside the debate about the EFSF, a plan involving a leveraging of the EFSF via the European Central Bank is under consideration. At a meeting of the International Monetary Fund in Washington, officials suggested the EFSF could be leveraged via the European Central Bank to achieve the estimated €2 trillion needed were Italy and Spain to require financing. The exact details, including the figure required, are unclear as French and German spokesman released varying statements on the negotiations.
The President of the European Commission, Jose Manuel Barroso gave his State of the Union address yesterday. He told MEPs that the EU is facing “the biggest challenges that the EU has ever had to face in its history”. Barroso announced that he was proposing to introduce a financial transaction tax (FTT). “Taxpayers have paid €4.6bn to the financial sector,” he told the Parliament. “Now it’s time for the financial sector to pay something back to society.” He assured MEPs “Greece is, and Greece will remain, a member of the euro area”. He made a call for more integration among EU member states, including greater political union and more pooling of efforts in the defence sector.
Belgium, France, the UK, Ireland and the Netherlands are opposing a European Commission proposal to extend the right to a lawyer for the entire period a suspect is held in police custody, citing rising costs and concerns that criminal procedures may be compromised. In a joint letter the five countries claimed the proposal would create “substantial difficulties” for investigations, which could be slowed down by having to wait for a lawyer before fingerprints can be taken.
Finally, Asterix creator Albert Uderzo is handing over the reins to a younger artist after 52 years drawing the famous comic book hero. The Italian-born illustrator invented the warrior Gaul with his scriptwriter friend, Rene Goscinny, in 1959.