March 28, 2024

European Parliament Approves Plan to Bolster Carbon Trading

LONDON — In a move to bolster the floundering European market for carbon offsets, the environmental committee of the European Parliament voted Tuesday to allow the European Commission to reduce the numbers of carbon permits that it auctions in the next three years.

Prices of carbon allowances, which permit companies to emit greenhouse gases, plunged below €3, or about $4, per ton last month, compared to around €30 per ton in 2008 and about €9 per ton a year ago.

Many analysts think that setting a hefty price on carbon will prove the most efficient way to reduce emissions. The European system is the world’s flagship program and its struggles could have negative implications for other countries that are considering similar efforts, including the United States.

The vote Tuesday, by an unexpectedly decisive 38 to 25 with two abstentions, is “a lifeline for the carbon market and for emissions trading as a policy tool for curbing emissions,” said Stig Schjoelset, head of carbon analysis at Reuters Point Carbon, a market research firm in Oslo. Mr. Schoelset added that if the vote had gone the other way, the system would have been “more or less dead.”

Although this vote is only a first step, politicians and analysts said it might allow the European Union program to begin recovering credibility with markets as a means to curb emissions.

“It is important that we get this right, and the sooner we get it right the better,” the E.U. climate action commissioner, Connie Hedegaard, said during an interview Monday.

Prices for carbon allowances on the Emissions Trading System, the world’s premier cap and trade program, fell to as low as €2.8 per metric ton last month. After the vote Tuesday prices were about €4.5 per ton, after closing at €5.13 per ton on Monday.

The proposal approved Tuesday would take 900 million carbon credits that were scheduled to be auctioned over 2013 to 2015 and “backload” them to 2019 and 2020 in order to put a floor under prices. It is estimated that there is now a surplus of 2 billion credits, so this move will not soak up all of the carbon allowance glut.

The changes will need to be approved later by the full Parliament and member states.

“It is really the first step in a long, long process,” said Kash Burchett, an analyst at IHS, an energy research firm.

The European Trading System was set up by the European Union to provide a signal to polluters like utilities and heavy manufacturers that they needed to reduce carbon emissions. Companies are either allocated or required to buy at auction enough credits to offset their annual emissions. The trouble is that with Europe’s dismal economy dampening industrial activity and energy use, there is now a huge surplus of allowances, or credits, depressing their price.

Industrialists and analysts say that single-digit prices do not provide the intended incentive for companies to switch to cleaner fuels and energy-efficient technology. Mr. Schoelset said that to encourage switching from coal to natural gas, a price of €30 to €40 per ton is needed, while an even higher level of perhaps €60 to €150 per ton is required for utilities to invest in expensive carbon–reducing technologies like carbon capture and storage.

“The vote signals the intention of the European Parliament to begin the process of restoring the most cost-effective approach to meeting Europe’s energy needs and reducing emissions over time,” David Hone, chief climate change adviser to the oil giant Royal Dutch Shell, said in a statement. “It will not immediately restore the system to good health, but it is a start.”

This article has been revised to reflect the following correction:

Correction: February 19, 2013

An earlier version of this article misidentified an analyst at IHT, an energy research firm. He is Kash Burchett, not Kass Burchett.

Article source: http://www.nytimes.com/2013/02/20/business/global/european-parliament-approves-plan-to-bolster-carbon-trading.html?partner=rss&emc=rss

European Finance Ministers Deadlock on Plan to Oversee Banks

The ministers agreed to reconvene next week, a day ahead of a summit meeting of European Union leaders who had been hoping to focus discussion on the design of a banking union — something the leaders agreed last summer to establish as a way to safeguard the industry after member countries racked up enormous debts bailing out their banks.

That agreement in June had called for setting up the single regulator under the European Central Bank. And the bloc’s administrative arm, the European Commission, has proposed phasing in the system beginning Jan. 1.

But the deadlock on Tuesday indicated that there was sharp disagreement among member states over how many banks in the euro currency union should be covered by the new system; how to ensure that countries outside the currency union have a way to rebuff regulations they dislike; and how to ensure that the European Central Bank would keep monetary policy separate from its decisions on bank supervision.

After ministers failed to reach agreement Tuesday during their regular monthly meeting, Vassos Shiarly, the finance minister of Cyprus, the country holding the Union’s rotating presidency, set another session for Dec. 12.

If ministers fail to reach agreement at that meeting, the E.U. leaders will arrive at their summit meeting the following day without a cornerstone in place for the banking union. One of the goals for the union could eventually be to issue debt jointly backed by euro zone countries, as a way to buffer the sort of interest rate spikes that have often bedeviled weaker countries, including Spain.

Some ministers warned on Tuesday that further delays in designing the banking union could lead to a return of acute financial pressures in the euro zone. “If we are not able to deliver in the dates we have committed, this will not be neutral in terms of the stability of the markets,” said Luis de Guindos, the Spanish economy minister.

For Spain, stricter supervision was supposed to be the condition for using European funds to bail out its troubled banks directly and a way to avoid accumulating more sovereign debt. Once the supervisor is in place, Spain wants the money it is drawing upon for its bailout to be moved off its government ledgers.

But France and Germany remained divided over the new banking rules on Tuesday. That is a significant obstacle because agreement between the two countries usually is needed to accomplish major reforms in Europe.

Pierre Moscovici, the French finance minister, told the meeting that the new rules should apply to all lenders rather than lead to a two-tier system.

Chancellor Angela Merkel of Germany has suggested that the system could eventually apply to all 6,000 banks in the euro zone. But some German officials and industry groups would rather have the new centralized oversight apply only to the biggest European banks, and leave regulation of the country’s smaller savings banks in the hands of national officials.

French officials have stressed the need for a system that covers all euro zone banks. Otherwise, the French have warned, any sudden intervention by the E.C.B. into the affairs of a bank under national regulation could raise alarm among investors and depositors and even lead to bank runs.

But Wolfgang Schäuble, the German finance minister, said Tuesday that trying to give too much central authority to a new banking regulator would meet stiff political opposition in his country.

“I think it would be very difficult to get an approval by the German Parliament if you would leave the supervision for all the German banks to European banking supervision,” Mr. Schäuble told the meeting. “Nobody believes that any European institution will be capable to supervise 6,000 banks in Europe.”

The government in Berlin has complained that overly rapid implementation of the rules could lead to regulatory loopholes. German state governments also have balked at giving the central bank oversight of their sparkassen, the hundreds of small and midsize savings banks that do much of the lending to consumers and small businesses.

Germany also refused to support one of the main British demands: new voting rules to ensure that lenders based in London continue to be regulated by Britain.

Yet another concern for Mr. Schäuble was whether placing so much supervisory power within the European Central Bank could lead the central bank to compromise its decisions on monetary policy — if, for example, the E.C.B. were setting interest rates while also trying to oversee politically sensitive issues like bank bailouts.

“In the long run, you will damage the independence of the central bank,” Mr. Schäuble told the meeting.

Germany is the biggest financial contributor to the European Union, and establishing the single supervisory system could oblige Ms. Merkel to dip into the treasury to help prop up weaker European banks, like many of those in Spain. Such aid could be an issue for German taxpayers, ahead of national elections in their country next September. German citizens have already grown weary of paying most of the bill for bailouts, and they are wary of using more money to help banks in vulnerable southern European countries.

Another issue to be resolved in coming weeks will be the leadership of the group of ministers who oversee the euro area.

Jean-Claude Juncker, who has been the group’s president since 2005, reiterated at a news conference Monday night that he would step down at the end of this year or at the beginning of next year.

But he declined to signal his preference for any particular successor to the post, which gives the holder significant power over the agendas of their meetings.

Article source: http://www.nytimes.com/2012/12/05/business/global/daily-euro-zone-watch.html?partner=rss&emc=rss

DealBook: NYSE and Deutsche Borse Chiefs to Discuss Plans to Save Merger

Duncan Niederauer, left, chief of NYSE Euronext, with Reto Francioni of Deutsche Börse, on video, at a news conference in February.Mark Lennihan/Associated PressDuncan Niederauer, left, chief of NYSE Euronext, with Reto Francioni of Deutsche Börse, on video, at a news conference in February.

4:12 p.m. | Updated

The chief executives of NYSE Euronext and Deutsche Börse plan to meet on Wednesday to discuss the next steps in the planned merger of their two companies, as European antitrust regulators take steps to block the proposed deal, according to people briefed on the matter.

The two chiefs, Duncan L. Niederauer of NYSE Euronext and Reto Francioni of Deutsche Börse, will meet in New York as part of a regularly scheduled gathering of executives from both companies, these people added.

For months, the European Commission‘s antitrust office has raised concern about the creation of the world’s biggest stock exchange operator, arguing that the would create a monopoly on exchange-traded derivatives on the Continent. Any formal proposal to block the deal would require the approval of the full European Commission, as well as input from an array of antitrust experts from member nations.

Such a move is likely to prompt public lobbying by NYSE Euronext and Deutsche Börse, which have already extended the deadline for completing the merger in anticipation of antitrust opposition. The two exchange operators still have until about Feb. 9 to change commissioners’ minds.

A spokeswoman for the European Commission declined to comment. A spokesman for NYSE Euronext said in a statement: “NYSE Euronext has not yet received any official decision by the European Commission regarding the requested merger of both companies.”

European antitrust officials, led by Joaquín Almunia, have hinted for weeks that they intended to block the deal unless NYSE Euronext and Deutsche Börse agree to divest one of their European futures exchanges. Together, the two markets, Liffe and Eurex, would control the majority of exchange-traded derivatives trading on the continent.

But NYSE Euronext and Deutsche Börse have argued that the European Commission’s approach ignores the bigger market for derivatives that are traded over the counter. They have also said that within the world of exchange-traded derivatives, the market share of a combined Liffe-Eurex would be 19 percent, smaller than that of a primary competitor, the CME Group.

Neither company is willing to divest either Liffe or Eurex. Instead, they have proposed smaller remedies, including allowing competitors access to the Eurex trading system.

Article source: http://feeds.nytimes.com/click.phdo?i=449ad0947a1ff01eb73413360c9fedee

Euro Zone Members Agree to Reinforce Original Treaty Rules

The central aim of the deal is to make it harder for the 17 members of the bloc that use the euro to ignore stringent rules that they had pledged to follow long ago. And to make that outcome more likely this time, the accord creates a center of coordination and decision-making in Europe.

All 17 members of the European Union that use the euro, plus 6 other members — Denmark, Latvia, Lithuania, Poland, Romania and Bulgaria — agreed to subscribe to a new treaty, which binds them more closely, enforces more fiscal discipline and makes it harder to break the rules. Britain rejected the plan, while Hungary, Sweden and the Czech Republic left the door open to sign up.

At the heart of the accord are the fiscal requirements that were laid down in the treaty that led to the creation of the euro as a common currency 20 years ago; it called for the euro zone countries to limit budget deficits to no more than 3 percent of gross domestic product and to restrain overall debt so that it remains below 60 percent of annual economic output. Originally, there were sanctions for exceeding these limits, but when Germany and France found themselves doing so the idea of punishments was scrapped.

Once the European Commission, the bloc’s executive body, suggests sanctions for violating the rules, a country will need a weighted majority of nations to prevent them from being enforced. The new mechanism will make it more difficult for countries to avoid punishment.

The provision limiting a nation’s total debt, which had not been taken seriously, will be applied more forcefully, requiring nations to gradually reduce their level of cumulative debt.

Euro zone nations will also have to submit drafts of their national budgets to the European Commission, which will be able to request revisions if it thinks a budget could lead a country to break the euro zone’s rules.

The accord also contains other changes: Governments will have to inform one another about how much debt they want to issue in bonds, and limitations on debt are to be written into national laws or constitutions.

Should countries deviate from the debt limits, an “automatic correction mechanism” will kick in; this is to be designed by each nation in line with principles identified by the European Commission. The European Court of Justice will make sure all nations effectively include debt restrictions in their laws.

“We are committed to working towards a common economic policy,” the nations said in a statement. For all of the accord’s intricacies, skeptics immediately saw potential flaws. Additional aid for euro zone countries that are struggling with unsustainable levels of debt would, at best, buy time for the bloc to create a system that satisfies German demands for budgetary discipline, said Clemens Fuest, a professor at Oxford who has advised the German Finance Ministry.

He estimated that the additional support would provide relief “for perhaps half a year or a year. That is probably the most optimistic scenario.”

Eventually, Mr. Fuest said, the European Central Bank will be forced to relent and become the lender of last resort for nations like Greece, Italy and others members with high debt. The bank’s president, Mario Draghi, has been resisting that role.

Simon Tilford, chief economist at the Center for European Reform in London, says the agreement in Brussels is superficial and fails to address the underlying problems. “It’s little more than a stability pact with lipstick,” Mr. Tilford said.

“It’s hard-wired austerity into the framework of the European Union,” he added. “That’s not going to do anything to solve the crisis.”

But Stefan Schneider, the chief international economist at Deutsche Bank in Frankfurt, said that expectations for a grand solution at the meeting here had been too high. “You can’t make a quantum leap to a fiscal union in one weekend,” he said.

Article source: http://www.nytimes.com/2011/12/10/world/europe/euro-zone-agrees-to-reinforce-maastricht-rules.html?partner=rss&emc=rss

E.U. Proposal for Fishing Industry Support Raises Eyebrows

PARIS — The European Commission on Friday backed a funding policy that leaves largely intact its substantial support for the fishing industry, despite the commission’s own finding that subsidies were leading to destructive overfishing.

The commission, the executive arm of the European Union, approved the creation of a €6.5 billion, or $8.8 billion, European Maritime and Fisheries Fund
to finance its Common Fisheries Policy
from 2014 to 2020. Both the revised fisheries policy and its funding are due to be finalized in 2013 by a vote of the 27 E.U. member states.

Maria Damanaki, the commissioner for maritime affairs and fisheries, said in a statement that the fund would “increase economic growth and create jobs in the sector. No more money will be spent to build big vessels. Small-scale fisheries and aquaculture will benefit of this budgetary greening.”

Conservationists said the commission had made progress in some areas, but expressed disappointment with the details, saying overcapacity, the biggest problem facing fish stocks, was not adequately being addressed and noting that little financing appeared to be set aside for enforcement activities and scientific assessment.

In a working paper
in 2008, the commission noted that subsidies to European fleets contributed to pressure on fish stocks that in some cases “is two to three times the sustainable level.” According to commission figures this year, 63 percent of stocks in Europe’s Atlantic waters are overfished, as are 82 percent of its Mediterranean stocks and two-thirds of its Baltic stocks.

Some groups assert that without subsidies, a huge swath of the industry would be unprofitable. Oceana, a nongovernmental organization in Brussels, estimated in September that E.U. fishing fleets received total subsidies — mostly for fuel — of €3.3 billion in 2009, equivalent to 50 percent of the value of the total catch. And 13 E.U. countries got more in fishing subsidies than the value of their catch.

Fuel subsidies are important since the cost of diesel is a critical part of the calculus of how long a boat can remain at sea and remain profitable, and boats that remain at sea longer are more likely to overfish.

In one case, the Union spent €33.5 million from 2000 and 2008 helping to modernize the bluefin tuna fleet, money that went largely to the giant purse seiners that are capable of vacuuming up entire schools of the endangered fish.

Conservation groups assert that European fishing subsidies have long been subject to abuse, saying that much of the money ends up in the hands of the largest industrial fisheries. A Greenpeace investigation
even found that Spain was subsidizing a fleet owner who had been convicted of illegal fishing.

The new funding policy would require that subsidies be cut off to anyone found guilty of illegal fishing, a nod to the so-called Johannesburg commitment, an E.U. pledge made in 2002 to phase out destructive fishing practices by 2012.

Markus Knigge, an adviser to the Pew Environment Group and the Ocean2012 coalition of conservation organizations, said Europe did not even know how it was spending its subsidies, because some of the most important fishing states, including Spain and France, had failed to carry out fleet assessments.

According to E.U. rules, “member states are obliged to assess overcapacity and put their efforts into eliminating it,” he said. “But if you don’t know where the overcapacity is, and you modernize the fleets, you may end up actually increasing overcapacity.”

Oliver Drewes, a spokesman for Ms. Damanaki, said he did not want to dismiss the concerns of conservationists, but “there are some innovative instruments being introduced here, and this is just the start of it.”

“The way things are going to be designed in practice is what’s going to make the music,” Mr. Drewes said.

In one of the biggest changes, the fund proposal approved Friday would extend financial support for the first time to the growing aquaculture sector.

Funding, which is co-financed by member states, also aims to help fishers and their families diversify their sources of income, and includes a budget for retraining the spouses of fishers whose families depend on the industry for their livelihoods.

The new proposal drops so-called scrapping subsidies, used to decommission boats to reduce overcapacity. The policy has been widely regarded as a failure: the European Union has spent €1.7 billion on scrapping fishing boats since the 1990s, according to the commission, with no effect on the problem of too many boats chasing too few fish. The problem has been partly that as smaller boats are decommissioned, larger, more technologically sophisticated boats have taken their places.

The new proposal instead calls for spending on “economically and socially productive activities,” including in fish processing, catering and tourism, as well as aid to small-scale coastal fleets.

It will also be used to help fishers adopt improved gear to reduce discards. But even that, conservationists warned, could be used to make existing boats more efficient, further increasing overcapacity in the fleet.

Article source: http://www.nytimes.com/2011/12/03/business/global/eu-proposal-for-fishing-industry-support-raises-eyebrows.html?partner=rss&emc=rss

Europe Proposes New Conditions on Research and Development

BRUSSELS — The European Commission proposed new rules Wednesday that could make billions of euros of research and development financing conditional on any resulting inventions being marketed in Europe first.

The proposal is part of a broad package of measures aimed at generating jobs and stimulating growth in Europe, and would need to be approved by all 27 E.U. member states and the European Parliament. The conditions could apply to parts of that package of proposed research expenditures, called Horizon 2020, worth €80 billion, or $108 billion, from 2014 to the end of the decade.

The commission, the European Union’s executive branch, could “set additional exploitation conditions in the work program or the grant agreement” in specific cases where there was “very high investment” or where a “strategic interest” of the bloc was involved, Máire Geoghegan-Quinn, the European commissioner for research, said Wednesday.

“This should not be taken as the European Union or the commission putting forward a protectionist policy,” Ms. Geoghegan-Quinn said.

She added that there was “no more open research program in the world” than in Europe.

The commission said its goals were to increase competitiveness, create jobs, attract more top researchers and simplify funding rules to facilitate scientific breakthroughs in areas like health, food security, clean energy and transport, and raw materials for manufacturing.

The additional conditions on commercialization also could help major European manufacturing companies keep production at home.

E.U. officials said the rules were in line with those in many other countries, including the United States, and would apply in only a few cases, like the first commercial applications of a potentially highly lucrative invention or where large numbers of jobs were at stake.

Industry groups including the American Chamber of Commerce to the European Union, TechAmerica and DigitalEurope have expressed concerns about the consequences of any “E.U. first” rules aimed at limiting commercialization of breakthroughs to Europe, saying that such a policy could discourage inventors and hurt the economy.

Representatives of the American Chamber and DigitalEurope said Wednesday that they were studying the proposals and had no immediate comment.

Article source: http://www.nytimes.com/2011/12/01/business/global/europe-proposes-new-conditions-on-research-and-development.html?partner=rss&emc=rss

For Italy, Berlusconi Is a Problem but Also a Solution

Mr. Berlusconi, at 75 the dominant Italian politician for almost two decades, has watched his support slide precipitously in recent months over everything from the economy to his own trial on charges of tax fraud, corruption and paying for sex with a minor. As Italy has struggled to present viable responses to the euro zone crisis, calls have multiplied for Mr. Berlusconi to step aside, even from his own coalition.

Italy, the third-largest economy in the euro zone, is not currently running large budget deficits and should be capable of shouldering its overall debt, which stands at 120 percent of gross domestic product, one of the highest levels in the world. But that assumes that markets maintain faith in its ability to handle its problems and do not send interest rates on its debts skyrocketing, as they did with Greece, Portugal and Ireland.

When it comes to calming jittery markets, Mr. Berlusconi and his increasingly paralytic government are seen as a growing liability. While the prime minister gave a letter to the European leaders in Brussels laying out his intentions for economic change, his immediate record on making good on his pledges is spotty at best.

“It’s difficult to believe that the tough ‘intentions’ adopted yesterday can really be transformed into the biggest plan of market reforms Italy has ever put on paper,” Antonio Polito wrote in a front-page editorial in Corriere della Sera, a daily newspaper.

The letter to the European Commission contained a substantial checklist of measures to make Italy more efficient and competitive, stimulate growth and cut the public debt. But the broad scope of the plan, with measures range from scaling back the state to accelerating privatizations to loosening labor laws, as well as its rigidly drawn timetable, makes its passage in Parliament an uphill battle.

The plan contains “commitments and dates that would be very difficult to respect,” Dario Franceschini, leader of the opposition Democratic Party in the lower house of Parliament, said Thursday morning.

Trade unions also said they would fight the proposed changes, and threatened to call a strike over a change to labor law that would make it easier for financially troubled companies to fire people.

The measures, said Susanna Camusso, leader of the CGIL, Italy’s largest trade union, “go in the opposite direction of what’s needed to help the country grow,” she said. “Giving young people a future means guaranteeing their rights, not taking them away.”

Others criticized the plan for its omissions, like a wealth tax, which has been object of much national debate. Pension reform was also notably absent, after Umberto Bossi of the Northern League threatened to pull his support from Mr. Berlusconi’s government over the issue.

“Italy is not living in normal conditions, its debt is high, too high to sustain according to markets, and bankers are also looking on with preoccupation. In these conditions, they should have done more” regarding pensions, said Elsa Fornero, the scientific coordinator of the Centre for Research on Pensions and Welfare Policies at the University of Turin. But pension restructuring is never a vote-getter, which is why in Italy, “reforms are passed and then politicians want to defend everyone from them,” she said.

Mr. Berlusconi warned Thursday that Italy’s credibility was on the line if the government failed to maintain its commitments. In his favor, some commentators suggested, if there is one thing many Italians fear more than the current government it is the available alternatives.

“We are in a situation where we are without a government, but also without an opposition, and that is the trouble of the Italian political system today,” said Sergio Fabbrini, Director of the Luiss School of Government and Professor of Political Science and International Relations at LUISS Guido Carli in Rome.

Mr. Fabbrini said that even with open opposition to Mr. Berlusconi from Confindustria, the Italian business lobby, the Roman Catholic Church and several major newspapers that have been calling for his resignation on almost a daily basis, “voters don’t trust the opposition.” Many Italians believe that they, too, would not be able to make the tough choices needed to pull Italy out of the cross hairs of the financial markets.

Mr. Berlusconi’s “strength is the weakness of his rivals,” he said. “This is a stalemate.”

Gaia Pianigiani contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=a9d994b08f3cd1fbac199b7c2de91fe0

DealBook: Britain and European Union Agree on Regulating Derivatives Trades

Yves Logghe/Associated PressThe British chancellor of the Exchequer, George Osborne, departs after meeting with European Union finance ministers in Luxembourg on Tuesday.

7:29 p.m. | Updated

Britain struck a deal Tuesday with its European Union allies on how to regulate trading in over-the-counter derivatives, a compromise that the government said would improve regulation and protect financial markets across Europe.

At a meeting of finance ministers in Luxembourg, the British chancellor of the Exchequer, George Osborne, won a concession that would in most cases prevent the national regulator from being overruled on the authorization of trading by companies in over-the-counter derivatives in Britain.

An over-the-counter derivative is a financial instrument derived from another asset, like a stock or a bond, that is traded privately between parties rather than on an exchange. British officials say that London’s financial district handles around 75 percent of the European market for such derivatives.

In the United States, regulators, armed with the Dodd-Frank Act, have already moved to overhaul the over-the-counter market. American banks oppose many of the changes, saying the restrictions will force business overseas while foreign regulators lag behind with their own set of derivatives rules.

Mr. Osborne also secured a pledge that the European Commission would extend regulation to exchange-traded derivatives, which Germany dominates. Britain argued that the extended regulation was needed to establish a level playing field in Europe.

“We came here in a minority, somewhat outnumbered,” Mr. Osborne said. “Through some hard negotiation we very much improved the directive. We are going to have what we all wanted, which is more effective regulation of the derivative market.”

The European Commission argues that the new rules will provide vital transparency because trades will have to be registered and regulators will have access to that data.

The negotiations occurred amid growing tension between Britain and some European partners over financial services regulation. Britain fears that France and Germany want to ratchet up regulation to put London at a disadvantage as a financial center. Under European single-market rules, Britain could have been outvoted had it not struck an agreement.

The proposed changes, which will now be negotiated with the European Parliament, call for trades in over-the-counter derivatives in the 27 nations of the union to be reported to data centers. Regulators would have access to those data centers, while the newly created European Securities and Markets Authority, based in Paris, would have responsibility for the surveillance.

The European commissioner for financial services, Michel Barnier, welcomed the compromise on Tuesday, saying it would allow negotiations to proceed. In the past, Mr. Barnier has said that the lack of a regulatory framework for over-the-counter derivatives contributed to the financial crisis.

“No financial market can afford to remain a Wild West territory,” he has said.

The British government is also resisting plans, supported by Germany and France, for a financial transaction tax unless it can be agreed upon at a global level.

Article source: http://feeds.nytimes.com/click.phdo?i=c4bd93cdf3f4563eea1401ed562b1130

Requests for Collateral Pose a Hurdle for Greek Bailout

Though the three countries — Austria, the Netherlands and Slovakia — are small or midsize economies, accounting for little more than 10 percent of the new bailout of 109 billion euros ($156 billion), their intervention presents a headache for policy makers.

“If this spreads as we fear it could, it is not a minor complication,” said one European official who spoke on condition of anonymity.

The effort threatens to complicate negotiations on the second package of aid agreed to by euro zone leaders in July, creating an additional problem for officials seeking to bring the Continent’s debt crisis under control.

During negotiations on July’s bailout deal, Finland insisted on collateral being offered by the Greeks, and the country has negotiated a bilateral arrangement with Athens. That plan is now being discussed by officials from the other euro zone nations, whose approval is needed.

In a statement, Amadeu Altafaj Tardio, a European Commission spokesman, highlighted “the importance of rapid and full implementation” of the July deal “to safeguard financial stability in Europe.”

“The euro area member states also agreed that a collateral arrangement will be put in place where appropriate,” the statement said. “The euro area member states will now have to assess the outcome of these bilateral discussions between the Finnish and Greek finance ministers in light of these conclusions.”

Mr. Tardio added that the commission had not been formally informed about any other requests by countries for a deal similar to that offered to Finland.

In the deal between Athens and Helsinki, Greece is offering Finland a deposit to back loans, and Finland has said that this cash plus interest would be comparable to its contribution to the rescue.

It is likely that Athens would struggle to find the capital for similar deals with other countries.

But political pressure is growing in creditor countries. In the Netherlands this week, Parliament debated the Dutch contribution to the second Greek rescue. Such debate has made it difficult for governments to explain why Finland is receiving preferential treatment.

The Austrian Finance Ministry said that it had made its position clear before and that its latest comments were in line with what euro zone leaders agreed to at the July 21 meeting. “If there is to be a model for collateral, Austria would also make a claim,” a spokesman, Harald Waiglein, said, according to Reuters.

Article source: http://www.nytimes.com/2011/08/19/business/global/greece-bailout-faces-new-obstacle.html?partner=rss&emc=rss

Request by Some for Collateral Is New Hurdle for Greek Bailout

Though the three countries — Austria, the Netherlands and Slovakia — are small or midsize economies, accounting for little more than 10 percent of the new bailout of 109 billion euros ($156 billion), their intervention presents a headache for policy makers.

“If this spreads as we fear it could, it is not a minor complication,” said one European official who spoke on condition of anonymity.

The effort threatens to complicate negotiations on the second package of aid agreed to by euro zone leaders in July, creating an additional problem for officials seeking to bring the Continent’s debt crisis under control.

During negotiations on July’s bailout deal, Finland insisted on collateral being offered by the Greeks, and the country has negotiated a bilateral arrangement with Athens. That plan is now being discussed by officials from the other euro zone nations, whose approval is needed.

In a statement, Amadeu Altafaj Tardio, a European Commission spokesman, highlighted “the importance of rapid and full implementation” of the July deal “to safeguard financial stability in Europe.”

“The euro area member states also agreed that a collateral arrangement will be put in place where appropriate,” the statement said. “The euro area member states will now have to assess the outcome of these bilateral discussions between the Finnish and Greek finance ministers in light of these conclusions.”

He added that the commission had not been formally informed about any other requests by countries for a deal similar to that offered to Finland.

In the deal between Athens and Helsinki, Greece is offering Finland a deposit to back loans, and Finland has said that this cash plus interest would be comparable to its contribution to the rescue.

It is likely that Athens would struggle to find the capital for similar deals with other countries.

But political pressure is growing in creditor countries. In the Netherlands this week, Parliament debated the Dutch contribution to the second Greek rescue. Such debate has made it difficult for governments to explain why Finland is receiving preferential treatment.

The Austrian Finance Ministry said that it had made its position clear before and that its latest comments were in line with what euro zone leaders agreed to at the July 21 meeting. “If there is to be a model for collateral, Austria would also make a claim,” a spokesman, Harald Waiglein, said, according to Reuters.

Article source: http://feeds.nytimes.com/click.phdo?i=43dc4794a7d3cc06dd52cc5d0939b944