Tuesday

13th Nov 2018

France attacks UK over attitude to bail-out fund

  • The pound is on its own after the UK refused to participate in the euro bail-out, Mr Jouyet said (Photo: consilium.europa.eu)

Furious at the UK's refusal to participate in the eurozone bail-out, France has brusquely warned that Europe will not come to Britain's aid when - not if - the markets round on sterling.

The French market regulator, Jean-Pierre Jouyet, on Tuesday (11 May) told Europe 1 radio that it is inevitable that the pound will be targetted and that when that happens, Britain will be on its own.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"The English are very certainly going to be targeted given the political difficulties they have. Help yourself and heaven will help you," he continued.

"If you don't want to show solidarity with the eurozone, wait and see what happens outside it."

On the weekend, as EU leaders scrambled to cobble together a half-a-trillion-euro bail-out for the single European currency, the UK's main priority was to avoid being part of the scheme.

British finance minister Alistair Darling at the time said: "When it comes to supporting the euro, obviously that is for the eurozone countries."

Sweden and Poland however, both also outside the euro area, are to participate in the EU €440 billion "special-purpose vehicle," the EU's vast new emergency fund.

The warning from Mr Jouyet, a former Europe minister and a confidante of President Nicolas Sarkozy, comes as rating agencies are considering a downgrade from the UK's tripe-A credit rating.

On Tuesday, French bank BNP Paribas issued a shot across the bows of a possible Labour and Liberal Democrat coalition, warning that should such an alliance materialise, a downgrade was all but "guaranteed."

"A Lab/Lib government is the least liked option by markets and would almost guarantee a downgrade of the UK sovereign," reads the French bank's analysis of the UK situation.

The bank notes that Moody's, the rating agency, had said that Britain is unlikely to receive a downgrade while coalition talks were still ongoing.

"However, the implicit meaning of this statement suggests that the rating agency will look carefully into budget plans when deciding on the potential downgrade."

"We believe that a downgrade under a Lab/Lib government is more than likely since both parties agree that early expenditure cuts could harm the economy," the BNP Paribas analysis concludes.

Traders worry that such a coalition, or even a Tory-Liberal agreement, may produce obstacles to swift and deep cuts to reduce the UK's huge budget deficit.

The European Commission's spring economic projections say Britain, already home to the third largest budget deficit in the EU, is to overtake both Greece and Ireland in terms of indebtedness later this year.

Such a downgrade would raise the cost of government borrowing as interest payments would increase.

"There is not a two speed Europe but a three speed Europe. You have Europe of the euro, Europe of the countries that understand the euro, such as Poland and Sweden, and you have the English," said Mr Jouyet.

Italy defiant on budget on eve of EU deadline

Italy would be committing economic "suicide" if it fell in line with EU rules, its deputy leader has said, in a sign that Rome has little intention of bowing to pressure ahead of Tuesday's budget deadline.

Greek austerity violated right to health, says watchdog

Cuts in the Greek health care system, following the austerity cuts demanded in return for international bailouts, have violated the European Social Charter on the right to health, says Council of Europe's human rights commissioner, Dunja Mijatovic.

Analysis

Salvini is gambling with core voters' future in budget battle

Businesses in northern Italy are anxiously watching the standoff between the European Commission and the Italian government. They used to be the 'Northern League's' most important electorate - but the party's profile and priorities have changed.

EU commission eyes majority tax rules

The commission plans to address tax avoidance schemes in some EU states by shifting tax decisions away from unanimity to a majority system in what amounts to a long shot.

EU commission rejects Italy's budget plans

The EU executive has asked Italy to resubmit its budget in an unprecedented rebuke, while warning Rome that public debt was the "enemy of the people".

News in Brief

  1. Draft Brexit deal on London cabinet agenda on Wednesday
  2. EU proposes no visa for UK citizens after Brexit
  3. EU parliament 'deeply concerned' on Romania judiciary
  4. Macedonia's ex-PM flees to Hungary, seeks asylum
  5. Cyprus opens first new border crossings in eight years
  6. Putin's Austrian dance partner cancels Moscow visit
  7. Political deadlock over Sweden Democrat influence
  8. Court: Catalan referendum organisers must repay costs

Stakeholder

An open China brings opportunities to Europe

Some 60 years ago, the first major World Fair after World War II was held in Brussels. Sixty years on, China International Import Expo (CIIE), the first world expo dedicated to expanding imports, will open in Shanghai, China.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  5. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  7. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Latest News

  1. Merkel calls for 'real, true' EU army
  2. Italy defiant on budget on eve of EU deadline
  3. EU action on Hungary and Poland drowns in procedure
  4. EU unable to fully trace €1bn spent on refugees in Turkey
  5. Romanian leaders trade jibes over upcoming EU presidency
  6. EU warns Romania not to abuse GDPR against press
  7. EU 'Magnitsky Act' must bear its proper name
  8. Fear of nationalist surge marks European memorials

Join EUobserver

Support quality EU news

Join us