Tensions are building between Germany and Britain over how to handle the crisis in the Eurozone. In an hour- long speech to her party conference in Leipzig this week Merkel said “The task of our generation now is to complete the economic and currency union in Europe and, step by step, create a political union. It’s time for a breakthrough to a new Europe. Through the crisis, Europe is growing closer together and Europeans are discovering that decisions taken in one country can have enormous impact on the rest of Europe”. Meanwhile, at the lord mayor’s banquet in London, David Cameron said that the Eurozone crisis gives Britain the chance to refashion the EU as a looser union. Cameron said “Change brings opportunities. An opportunity to begin to refashion the EU so it better serves this nation’s interests and the interests of its other 26 nations too. An opportunity, in Britain’s case, for powers to ebb back instead of flow away and for the European Union to focus on what really matters.”
The twin leaders of the EU, Herman van Rompuy and Jose Manuel Barroso, have announced plans for further integration. “We are now facing a truly systemic crisis. It has made it clear that we must progress with greater integration of economic governance, especially within the euro area” Barroso, President of the European Commission, told the European Parliament on Wednesday. He said he would present plans next week “for the joint issuance of bonds in the euro area”. “I believe that Euro stability bonds will be seen as natural when we achieve our goal of reinforced governance and of course discipline and convergence”.
Italy’s new PM Mario Monti has outlined plans to tackle the country’s economic problems and cut its debt, amid student protests in several cities. The former EU commissioner said austerity measures would be balanced by economic growth and social fairness. Mr Monti formed his cabinet, made up of business leaders and other experts, after the centre-right government of Silvio Berlusconi fell last week under market pressure. Mr Monti told senators he intended to overhaul the pension system which he said “has large disparities in treatment and unjustified privileges for certain sectors”. He also said there would be a crackdown on tax evasion and changes to the taxation system. Monti has put together a ‘technocrat’ cabinet, saying that “The absence of political personalities in the government will help rather than hinder a solid base of support for the government in parliament and in the political parties because it will remove one ground for disagreement,”.
The European head of the International Monetary Fund (IMF) has resigned. Antonio Borges said that personal reasons were behind his decision to stand down immediately. IMF chief Christine Lagarde will seek to appoint Reza Moghadam, director of the fund’s strategy policy and review department, as Borges’ successor.
Spain’s borrowing costs have risen at its latest bond auction, as Spaniards prepare to vote for a new government to tackle its financial crisis. On money borrowed today, payable in 10 years, Spain has to pay an interest rate of 6.975%, the highest since 1997. A high rate or yield indicates investors may not have confidence in a government to fully repay its debts. The figure is perilously close to 7% – the level at which other eurozone countries have had to seek bailouts.
Thousands of protesters are taking part in an annual march in the Greek capital, Athens, with numbers swelled by anti-austerity demonstrators. The rally marks the anniversary of a student uprising in 1973 that helped bring down the country’s military dictatorship. Analysts say it is the first test of public defiance against Prime Minister Lucas Papdemos’s new government. It comes a day after Greece’s interim government won a confidence vote. Mr Papademos’s governing coalition had a huge majority – 255 MPs voted in favour, and 38 against.
The Swedish Green MEP Isabella Lovin has called for “Global databases of fish DNA” to combat illegal fishing. Ms Lövin called on the EU to promote coordinated international action against illegal fishing. She advocated greater use of inspections at sea, closing markets to illegal seafood, and imposing sanctions on states that fail to enforce laws on fishing.
The EU needs fewer presidents and a new budget ‘tsar’ if it is to emerge from its current economic and political crisis, Finnish Europe minister Alexander Stubb has said. Addressing students at the European College of Bruges Stubb offered up a change in the EU’s power structure as a way of breaking the haze of incoherence and multi-layered decision-making that has clogged up the bloc’s response to the eurozone sovereign debt crisis. “My solution would be to combine the functions of the Presidents of the Commission, the European Council and the Euro Area Summits into one high post. You can just select the same person to all three posts.” He admits the exercise, which would ultimately require a change in the EU treaty to get the details right, would only be worthwhile “if it brings more order and more harmony”.
The continued deadlock in Kosovo-Serb relations after this summer’s violence is likely to prevent member states from granting Belgrade official EU candidate status at an upcoming summit on 9 December. “France is in favour of recognising Serbia’s candidate status, but it has to resume dialogue with Kosovo. At the moment, there is no unanimity among the 27 member states,” French foreign minister Alain Juppe told reporters on Monday after discussing Serbia’s bid with fellow EU foreign ministers.