The Great Debate UK

from The Great Debate:

Don’t bank on EU’s tough state aid talk

paul-taylor-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --

PARIS, April 20 (Reuters) - The European Union's antitrust czar is struggling to stop governments bending EU rules on state aid to business when they rescue banks with taxpayers' money.

But Neelie Kroes' threat to force some banks to the wall unless they offer viable restructuring plans within six months of receiving state cash was economically unwise and politically inept. It could fuel political pressure to suspend the rules and weaken the European Commission's crucial watchdog powers.

EU regulators in charge of policing state aid have given fast-track approval to more than 50 rescue schemes since last October, when the full force of the financial crisis hit Europe after the collapse of Lehman Brothers in the United States.

Kroes told Reuters in an April 7 interview that time was running out for some banks to propose restructuring plans that in most cases would mean slimming down and selling off assets to avoid distortions in competition.
"Brussels will not rubber-stamp such schemes and may even let banks go bankrupt if those plans do not satisfy the Commission," the EU Competition Commissioner said.
She is very unlikely to make good on her threat because of the depth of the crisis and fierce political pressure from big member states to go easy on the banks.
Brussels would do better to give banks and governments more time to get over the worst of the crisis before restructuring or repaying aid, rather than making banks divest now at fire-sale prices that would cause bigger losses for taxpayers.

from The Great Debate:

U.S. fights fire, Germans fear flood

Paul Taylor Great Debate-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --

The United States is fighting a fire in the world economy, but Germany and some other European countries fear a flood of inflation as a result.

That clash of cultures is at the heart of transatlantic debate over whether Europe should spend more and ease monetary policy to revive growth, with a deep economic contraction certain this year and an end to the recession not yet in sight.

from The Great Debate:

Ukraine gas crisis spurs EU energy policy

Paul Taylor Great Debate-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --

The gas dispute between Russia and Ukraine that has left hundreds of thousands of Europeans shivering in the winter cold is bound to accelerate plodding European Union efforts to build a common energy policy.

The cut-off of Russian gas supplies to Europe via Ukraine highlighted how little progress the 27-nation EU has made in connecting national energy networks and diversifying supplies since the first such crisis three years ago.

from The Great Debate:

EU enters lame duck year amid challenges

Paul Taylor Great Debate-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --

The European Union is entering a lame duck year just as new challenges are mounting from Israel's assault on Gaza, Russia's gas cut-off to Ukraine and the impending inauguration of U.S. President Barack Obama.

The EU's active crisis management in the Georgia war and the global financial meltdown last year under the energetic leadership of French President Nicolas Sarkozy was an exception, not the dawn of a new, more effective Union.

from The Great Debate:

Obama spurs EU on climate, economy

Paul Taylor Great Debate-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --

He wasn't present and he isn't even in office yet, but Barack Obama was the elephant in the room at last week's European Union summit on economic recovery and climate change.

The 27 EU leaders knew they needed strong agreements to reduce greenhouse gas emissions and give their recession-hit economies a big fiscal stimulus to make themselves credible partners for the U.S. president-elect.

from The Great Debate:

Will EU live up to its green ambition?

Paul Taylor Great Debate-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --

European Union leaders this week face a crucial credibility test of their ambition to lead the world in fighting climate change, just as President-elect Barack Obama is making it a top priority for the United States.

Will the EU give real teeth to its pledge to cut greenhouse gas emissions by at least 20 percent by 2020, draw 20 percent of their energy from renewable sources and cut energy consumption by 20 percent over the same period, or will it fall short?

from The Great Debate:

EU prosperity at stake in crisis disunity

Paul Taylor Great Debate-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --

The global financial crisis has been a stark reality check for the European Union, exposing divergences over economic policy and highlighting the European Commission's growing difficulty in enforcing common rules.

The European response to the turmoil shows that most real power still resides with member states, not in Brussels. Even after 50 years of integration, governments instinctively reach for national solutions at the risk of harming EU partners.

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