Monday

20th May 2019

Agenda

This WEEK in the European Union

  • Angela Merkel will be in Brussels on Wednesday (Photo: Queenofhearts820)

German Chancellor Angela Merkel will travel to Brussels Wednesday (5 October) to meet Jose Manuel Barroso, just days after the commission president said member states are unable to effectively govern the eurozone.

The chancellor, buoyed by the Bundestag's recent approval of the enhanced EU bail-out fund, is in the international spotlight as she tries to navigate her way between popular hostility to the idea of propping up troubled eurozone countries and market pressure to show commitment to save the euro.

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Her answer so far has been to insist that rules underpinning the currency must be strengthened - by treaty change if necessary - while also teaming up with her French counterpart Nicolas Sarkozy to call for a loose economic governance of the eurozone by its leaders.

Barroso, in his first direct attempt to put the commission in charge of responding to the crisis, in a recent speech said that governments "cannot do this themselves."

Greece, never far from the agenda, will once more be the main topic of a meeting of eurozone finance ministers in Luxembourg on Monday.

Athens urgently needs the next installment of its €110 billion bail-out in order to pay its bills, but EU-IMF lenders are sceptical about its ability to see through austerity pledges. Greek Prime Minister George Papandreou has been holding a series of meetings with his EU counterparts to reassure them. But German finance minister Wolfgang Schaeuble has said no decision on the next tranche would be made until a 13 October meeting of eurozone ministers.

The commission next week will set out how it thinks the €376 billion it has proposed for Europe's poorer regions best be spent between 2014 and 2020, the next multi-annual budget period.

The commission wants to introduce stricter conditions for allocating project money while giving higher priority to those that dovetail with its EU 2020 programme, a 10-year initiative to boost the economy and employment in Europe. Poland and other eastern European member states whose regions benefit greatly from cohesion policy funds are keen to ensure that any future rules do not make it more difficult to access aid.

ECB chief Jean-Claude Trichet will appear before the economic and monetary affairs committee of the European Parliament for the last time as head of the European Central Bank on Tuesday, with Italian Mario Draghi due to take over the reins at the eurozone's top bank in November.

Trichet has been an increasingly strong critic of member states' handling of the eurozone crisis and has expressed impatience that the enhanced rules of the European financial stability facility (EFSF), the bailout fund, be soon passed in all euro countries so the ECB can stop its controversial policy of buying up government bonds - seen by the bank as essential for the health of the eurozone but by critics as overstepping its remit. The new rules would allow the EFSF to continue the bond buying policy.

Next week, the Netherlands and Malta are both due to vote on the beefed-up bailout fund, with the new rules allowing the fund to buy the debt of eurozone countries, capitalise troubled banks and give pre-emptive credit lines to governments. Slovakia will be the last eurozone country to vote around mid-October.

This WEEK in the European Union

European Commission President Jose Manuel Barroso will give a State of the Union speech on Wednesday, at one of the most testing times ever in the EU's history.

This WEEK in the European Union

The coming week will see all eyes once again focussed sharply on the rapidly metastasising eurozone crisis, although little official is programmed. According to EU officials everything is “still fluid”.

This WEEK in the European Union

Market fluctuations and debt spreads will continue to dominate the EU agenda in the last few days before summer break, with a special summit on the eurozone set to take place on Thursday.

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