Thursday 29 September 2016

In? Out? Cameron to shake us all about on EU

Published 11/05/2015 | 02:30

David Cameron
David Cameron

The fall-out from the UK election and the shock majority secured by the Conservative Party is likely to make the news agenda once again this week, especially as David Cameron forms his new government and attention shifts to the prospect of an in-out EU referendum.

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Amid all of that, the Bank of England will reveal the outcome of its interest-rate and asset-purchase meeting which was held last week, although the conclusions were delayed because of the election.

The election result means that Bank of England governor Mark Carney's plan to give borrowers "limited and gradual" interest-rate increases just got easier.

As Mr Cameron's Conservatives were achieving a surprise majority on Friday, investors pushed back bets on the timing of the first increase, predicting that Bank of England officials will continue to temper budget cuts with record-low borrowing costs.

The central bank held the key rate at 0.5pc throughout Mr Cameron's first five-year tenure and is forecast to keep it there in a decision to be announced today.

Elsewhere today, Greece and the Eurozone will be the focus of the news agenda as Eurozone finance ministers meet in Brussels with progress on Greek talks set to dominate.

Progress has been made, but there seems to be little prospect of a deal today. But, it's still important meeting.

On Friday, Greek prime minister Alexis Tsipras forecast a "happy ending" to the protracted discussions soon, and the chairman of the so-called Eurogroup, Dutch finance minister Jeroen Dijsselbloem, confirmed that progress had been made.

But with Greece's cash reserves dwindling, European Union officials said over the weekend that there was no breakthrough in talks with the International Monetary Fund, the European Commission and the European Central Bank on sticking points such as pension and labour market reforms and budget targets.

Greece's leftist-led government, which was elected earlier this year on promises to end austerity policies, has dragged its feet on accepting unpopular reforms promised by a previous government under the country's EU/IMF bailout programme.

The country faces the risk of defaulting on debt repayments and being forced out of the Eurozone, but negotiations have moved so slowly that the lenders have ruled out an agreement at today's meeting of finance ministers.

Mr Dijsselbloem said the meeting would not be decisive, but negotiations were moving forward.

EU officials said they are keen for the Eurogroup to send a positive message today that a deal is in the works and avoid another clash with Greek finance minister Yanis Varoufakis like one at a meeting in Riga last month.

The Eurogroup will also be debriefed on the third post-programme surveillance mission for Ireland.

Finance ministers from all European states will come together tomorrow in Brussels and will be briefed on the state of play in the Council and European Parliament negotiations on the proposal for a regulation that will establish the European fund for strategic investments.

The creation of the fund is part of the Investment plan for Europe, popularly known as the 'Juncker plan'.

The Council is expected to adopt conclusions on in-depth reviews of macroeconomic imbalances carried out by the European Commission in 16 member states, including Belgium, Bulgaria, Croatia, Finland, France, Germany, Hungary, Ireland, Italy, The Netherlands, Portugal, Romania, Slovenia, Spain, Sweden and the UK.

At home, the Central Statistics Office will release trade statistics tomorrow, as well as data on goods imports and exports on Thursday.

Irish Independent

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