November 15, 2024

Merkel Gives Turkey Hope for E.U. Membership

“In recent times, negotiations stalled somewhat and I am in favor of opening a new chapter in order to move forward,” Ms. Merkel said in her weekly podcast, broadcast on Saturday.

She began her tour on Sunday with a visit to German troops who are deployed along the Turkish border with Syria.

There is significant skepticism within Ms. Merkel’s conservative Christian Democratic Union about Turkish membership in the European Union, but as Turkey has continued to grow and the economies of the bloc have stagnated, the dynamic has begun to change.

Germany and Turkey are bound tightly by the large population of Turkish guest workers who came to work in West German factories in the 1960s and remained. In addition, Turkey is one of Germany’s most important trade partners outside of the European Union, with an annual exchange of goods worth roughly $40 billion.

The country pushed through structural reforms to its economy and social services nearly a decade ago as part of its efforts to join the bloc, which have helped contribute to solid growth of about 5.2 percent annually between 2002 and 2011, according to Turkish government figures.

Günther Oettinger, a member of the Christian Democrats who now serves as the energy commissioner for the European Union, stirred debate in Berlin last week when he said in an interview with the newspaper Bild that he believed that if the European Union waited too long to revive negotiations with Turkey, it risked an eventual turning of the tables.

“I’d bet that within the next decade, a German chancellor along with their colleagues from France will go begging on their knees to Ankara saying, ‘Friends, come to us,’ ” Mr. Oettinger told the newspaper.

Turkey has complained bitterly about the lack of support from the German government for its accession campaign, which started in 2005. Recently, negotiations have all but ground to a halt over opposing views on crucial issues, including human rights and a divided Cyprus.

Ms. Merkel’s government and the Christian Democrats have for years called on the bloc to allow Turkey to achieve what they call a “privileged partnership,” instead of full membership. But important party members have begun to indicate their apprehensions toward Ankara may be changing.

France has also resisted the idea of Turkey’s full accession and, with Cyprus and the European Commission, has blocked movement on all but 13 of the 35 policy areas, called chapters, that countries striving for membership must complete. Turkey has so far completed only one.

But President François Hollande of France signaled last week that he was ready to open talks on one chapter blocked under the government of his predecessor, Nicolas Sarkozy.

Prime Minister Erdogan said in Istanbul that he was hopeful that Ms. Merkel’s comments and similar remarks by Mr. Hollande meant there could be renewed movement while the Irish presidency holds the European Union’s rotating presidency, which ends in July.

“Since Ms. Merkel came to office, she has repeatedly used the expression ‘privileged partnership’ about our European Union process,” Mr. Erdogan said, according to Reuters.

He said: “Now there is change in France and a difference in the views of Germany and France. Along with Chancellor Merkel’s positive statement on opening chapters, these will pay off during Ireland’s presidency.”

On Monday, she will hold talks in Ankara with Mr. Erdogan and President Abdullah Gul.

“I think a long negotiating path lies ahead of us,” Ms. Merkel said “Although I am skeptical, I agreed with the continuation of membership discussions. We are engaging in these with an open result.”

Article source: http://www.nytimes.com/2013/02/25/world/europe/merkel-gives-turkey-hope-for-eu-membership.html?partner=rss&emc=rss

E.U. Looks to Ease Terms for Greece and Ireland

The European Union is looking to lower interest rates on bailout loans to Greece and Ireland and is working on a second rescue for Athens in a chaotic effort to prevent a disorderly debt restructuring. The efforts were in motion as Standard Poor’s lowered its rating on Greece’s debt even further.

The executive European Commission said Monday that it hoped to see a decision within weeks on reducing the rate charged to Ireland to make Dublin’s debt more sustainable.

“The commission is clearly in favor of a rate cut,” said a spokesman for Olli Rehn, the European Union’s economic and monetary affairs commissioner. “The commission is against debt restructuring.”

The new Irish government’s bid for lower interest payments has so far been blocked by Germany and France, which want Dublin to drop its veto on harmonizing the corporate tax base in Europe in exchange or raise its own low corporate tax rate.

In Germany, a senior lawmaker in Chancellor Angela Merkel’s conservative party said a further cut in the rate on emergency loans to Greece, already reduced by one percentage point in March, would be justified if it carried out further reforms to reduce its debt risk.

Michael Meister, finance policy spokesman of Ms. Merkel’s Christian Democrats, told German radio he opposed any idea that Athens should restructure its debt or that it should consider leaving the euro zone.

But a German Finance Ministry spokesman, Martin Kotthaus, said at a news conference: “There is no discussion at the moment about extending the payment schedule or lowering the interest rates for Greece.”

On Monday, Standard Poor’s lowered its rating on Greece’s debt to B from BB-, dragging it further into junk territory over concerns that a debt restructuring is increasingly likely.

“In our view, there is increased risk that Greece will take steps to restructure the terms of its commercial debt, including its previously issued government bonds,” the agency said in a statement, warning that more downgrades could come.

It said its projections suggest that principal reductions of 50 percent or more could be needed to restore Greece’s debt burden to a sustainable level.

Greece, whose fiscal slippages set off Europe’s debt crisis, is rated junk by all three major rating agencies.

The calls within the European Union for lower interest rates for Greece and Ireland came after a select group of top euro zone policy makers held not-so-secret talks in Luxembourg on Friday evening on how to stem the currency bloc’s deepening sovereign debt crisis.

The cost of insuring Greek, Irish and Portuguese debt against default rose further on Monday as market jitters intensified over the risk that Greece may have to restructure its debt, forcing investors to take losses.

European shares fell amid signs the three euro zone states in intensive care are staging a bidding war for easier terms by pointing to concessions made to each other.

The jitters also followed a report by the German magazine Der Spiegel alleging that Greece was considering leaving the euro zone, which drew indignant denials from Athens and E.U. ministers.

A German government spokesman said Ms. Merkel would meet the European Commission president, José Manuel Barroso, head of the E.U.’s executive arm, and the European Council president, Herman van Rompuy, who chairs the bloc’s regular summit meetings, on Wednesday to review the situation.

A Greek exit from the euro has never been under discussion and is not now, he said at a news conference.

Euro zone and E.U. finance ministers are due to meet next week to approve Portugal’s aid program amid lingering uncertainty over whether Finland, which has a caretaker government and has not yet begun negotiations for a new coalition, will be in a position to give the required agreement.

Pressure is mounting for those meetings to deliver decisions on Ireland and Greece as well.

Responding to anger in some countries that were not invited to Friday’s talks, a German Finance Ministry spokesman insisted there was no attempt to create a two-class euro zone.

The Greek finance minister, George Papaconstantinou, who attended the Luxembourg meeting, said investors did not believe that his country could return to capital markets next year as envisaged in its E.U./I.M.F. plan, so it might need alternative financing.

Jean-Claude Juncker, chairman of the Eurogroup of finance ministers of the 17-nation euro area, said after Friday’s talks that there was a consensus that Athens would require a second rescue.

“We think that Greece does need a further adjustment program,” he said after meeting with ministers from Germany, France, Italy, Spain, Mr. Rehn of the European Union and the European Central Bank president, Jean-Claude Trichet.

He gave no details, but a euro zone source said one idea under consideration was for the European Financial Stability Facility rescue fund to buy Greek bonds in the primary market upon issuance next year, in return for a new form of collateral.

Greece, which has a debt mountain of nearly 150 percent of gross domestic product, is supposed to raise 27 billion euros in the market in 2012, according to the existing rescue plan.

Market analysts are convinced Athens will have to reduce its debt substantially by a mixture of rescheduling maturities, lower interest rates and possibly convincing private investors to take voluntary losses to avoid a disorderly default.

Some also believe Ireland will be unable to repay its debt, set to reach 120 percent of gross domestic product, and will face mounting political pressure to make bank bondholders share the cost.

A senior Irish minister said on Sunday that Dublin was watching to see what concessions it can win on its E.U./I.M.F. bailout if Greece is given a new deal to resolve its crisis.

Energy Minister Pat Rabbitte said he hoped Ireland would win a 1 percentage point cut in the rate it is paying on some 40 billion euros of loans from the E.U. at the meeting of the organization’s finance ministers.

Article source: http://feeds.nytimes.com/click.phdo?i=51a4730fc67cf621aa87b40471dfc650