EU forced to confront Med migrant crisis

April 20, 2015

A rescue vessel is seen during the search and rescue operation underway after a boat carrying migrants capsized overnight, with up to 700 feared dead, in this still image taken from video

EU foreign ministers will discuss action on migration across the Mediterranean at a meeting in Luxembourg today. As many as 700 people are feared dead after a fishing boat packed with migrants capsized off the Libyan coast over the weekend.

If confirmed, the death toll would bring to 1,500 the total number of dead since the beginning of the year resulting from the flow of migrants seeking to flee insecurity in sub-Saharan Africa and the Middle East.

Italian Prime Minister Matteo Renzi has asked fellow EU leaders to hold an emergency meeting on immigration this week.

Many EU governments are reluctant to fund rescue operations in the Mediterranean for fear of encouraging more people to make the crossing in search of a better life in Europe. The previous search and rescue operation “Mare Nostrum” was cancelled last year.

It’s another “week to save Greece” though in truth there are still a few weeks before Athens completely runs out of money.

Euro zone finance ministers meet in Riga on Friday with both sides saying time is running short to keep Greece afloat but little confidence that they will pull it off with Athens yet to produce a programme of reforms that is deemed acceptable.

The Greek government must produce its new list today or tomorrow to leave any time to prepare for meaningful discussions on Friday. Euro zone deputy finance ministers will meet on Wednesday and must have something concrete to discuss.

Germany said last week it was unrealistic to expect euro zone countries to be able to pay out a new tranche of aid this month.

Greek Prime Minister Alexis Tsipras, elected on a promise to end austerity, is balking at politically sensitive reforms of the pension system and labour markets and a privatization programme to which his conservative predecessor had agreed. That’s a pretty profound list of disagreements.

Without a deal in Riga, Athens could be forced to choose between making wages and pension payments or meet upcoming debt payments. Greece must pay about 1 billion euros in May, most of it owed to the IMF. IMF chief Christine Lagarde said there was no question of any delay to payments Athens owes the Fund.

Russia denied a weekend German media report suggesting it could sign a gas pipeline deal with Greece which could bring up to five billion euros into Athens’ depleted coffers.

Greece cast a pall over the weekend International Monetary Fund Spring meeting in Washington. All major countries urged a rapid deal be struck.

Quote of the weekend went to Dutch Finance Minister and Eurogroup head Jeroen Dijsselbloem, who said: “Let’s not go into a game of chicken to see who can stick it out longer. We have a joint interest to reach an agreement quickly.”

Opposition Centre Party leader Juha Sipila, who advocates a wage freeze and spending cuts to regain Finland’s competitiveness, beat pro-EU and pro-NATO Prime Minister Alexander Stubb in elections on Sunday.

State broadcaster YLE forecast Sipila’s party won 49 seats in the 200-member parliament, while the Finns won 38 seats. Stubb’s centre-right National Coalition scored 37 seats and the centre left Social Democrats 34.

As a result, Sipila may have to depend on the eurosceptic Finns Party, formerly known as the True Finns, to form a government. If so, the  coalition could increase Finland’s hardline stance just as the battle for Greece’s future in the bloc nears a climax.

The Finns party leader Timo Soini told Reuters last month that he is looking to join the next coalition with calls to end EU bailouts and kick Greece out of the euro.

European Central Bank Vice President Vitor Constancio will discuss the ECB’s annual report at the European Parliament. ECB chief Mario Draghi said in Washington that the euro zone was better equipped to withstand a Greek crisis but admitted the bloc would “enter into uncharted waters” it if really blew up.

The Bundesbank will put out its monthly report. Last week, Germany’s leading economic institutes collectively raised their 2015 growth forecast to 2.1 percent from a previous 1.2. The ECB has made it clear it intends to see through it money-printing scheme for a full 18 months despite fledgling signs of an economic upturn.

Over the weekend, the IMF’s member nations warned of risks to the global economy from exchange rate shifts and geopolitical tensions, seeing “moderate” growth and “uneven prospects”.

The Group of 20 leading economies struck a hopeful tone on global growth though members fretted Athens’ inability to strike a deal with its lenders could upset Europe’s tentative recovery.

China’s central bank cut the reserve requirement ratio for all banks by 100 basis points on Sunday, stepping up measures to combat slowing growth.

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