Whilst the Eurogroup continues working “on a proposal”, there are some other snippets to note.
The IMF has announced it is releasing almost €1.5billion to Ireland as part of the EU-IMF financial aid package for the country. Apparently the Irish government has maintained “resolute implementation” of the economic restructuring programme, and is “ahead of schedule in some areas”.
Not so Greece. The Irish Times’ Arthur Beesley informs us that the EU-IMF inspectors have “unexpectedly left Greece yesterday after the emergence of divisions with the government over the execution of reforms agreed in its first international bailout.”
The troika – comprising the EU Commission, the ECB and the IMF – sent an inspection team to Athens a fortnight ago for the fifth quarterly review of the first Greek rescue. Top officials from the three institutions joined talks with Greek ministers on Monday but the deadlock persists.
“At a certain point you reach the conclusion that there is no point in having new meetings every day – and you leave the Greeks a chance to do their homework,” said a source close the troika.
At issue is the Greek government’s failure to deliver promised reforms to public sector pay and its tax collection system. The troika is also unhappy with the government’s failure to liberalise a number of professions.
The troika and Athens are at odds over the extent to which these questions are hampering the effort to tackle the Greek deficit, now set to be larger than forecast.
Greece blames a quickening of recession but the troika says promised reforms would ease pressure on the economy.
“They’re not happy,” said a Greek government source in reference to the troika.
“On the other hand I think they can see that we are at the very limit here and you can’t just turn something on or off, but there is nothing that could put in question the continuation of the meetings.”
And as for Italy… There has been a declaration of independence by the new Principality of Filettino. And the Italian government are being warned by the head of the European Central Bank, Jean-Claude Trichet, to ‘stick to the plan’. From the BBC report
Mr Trichet declined to discuss the ECB’s bond-buying plans at Saturday’s conference, in Cernobbio on northern Italy’s Lake Como, but was quoted by Reuters as saying the ECB would discuss it at a meeting next week.
He urged Italy to push through the package of cuts announced in early August, saying: “It is essential that the target which was announced to diminish the deficit will be fully confirmed and implemented.”
He described as “extremely important” all measures to improve the “flexibility” of Italy’s economy.
Both industrialists and union leaders have accused the austerity plan of relying too much on spending cuts and new taxes, and offering little to stimulate growth or to encourage job creation.
Disagreements over taxes and pensions within Mr Berlusconi’s coalition government led to a series of U-turns over the past week.
A tax on high earners and a rise in the pension age were proposed, then dropped, within days.
And that’s before we get to Germany, where the Finance Minister, Wolfgang Schäuble, is reportedly telling his party colleagues “that solving the euro zone crisis was not possible without a successor to the Lisbon Treaty, “even though we know how difficult a treaty change will be”.”
Well, that is an option. And he’s probably right. Although I’m not sure how viable an option it is at the minute…
And there’s still “the political trilemma.”
[Europe is still sexy! – Ed] Of course it is.
Adds BBC Europe editor Gavin Hewitt covers similar ground.