Juncker assured of third term

Luxembourg’s Prime Minister Jean-Claude Juncker looked likely to secure another term as president of the Eurogroup ahead of a meeting of finance minsters, on 18 January. Emerging as the only candidate after Italian Finance Minister Giulio Tremonti last week denied having an interest in the post, Juncker saw fit to send a letter to ministers setting out his intention to modernise the group, which coordinates the interests of the 16 countries using the euro. Calling for a closer coordination of economic policies and surveillance, Juncker said in the letter – seen by AFP– that warnings may be necessary for countries that stray from agreed norms.

“The Eurogroup should lead a more broad economic surveillance [...] to identify priority problems for each of our member states and to establish a coherent frawework for action,” the letter says. It goes on to argue that in cases where some countries deviate from the “general lines” agreed by the majority, the European Commission should issue warnings to ensure the smooth functioning of the economy.

In a protocol attached to the Lisbon Treaty, the Eurogroup is given a special status in order “to develop ever-closer coordination of economic policies within the euro area”. While ministers from the 16 countries continue to meet informally – meaning they adopt no conclusions – under Article 136 of the treaty, they will now have greater scope to set their own rules on budgets and economic policy. Ministers can vote on the measures by qualified majority in the Council. They can also vote on a unified eurozone position in international financial institutions, such as the International Monetary Fund and G20 (Article 138).

Spain has signalled that it is keen to see a greater coordination of eurozone policies in these two organisations, and aspiring Economic and Monetary Affairs Commissioner Olli Rehn is to come out with a communication on the issue should he be confirmed in the post at the end of this month.

The new powers could be particularly important given that several EU member states – and most notably Greece – are having problems keeping their budget deficits and government debt under control. Greece has been an item on the Eurogroup agenda for months, but will come up for particular scrutiny after a Commission report found, on 8 January, that its Statistics Office had failed to provide Eurostat with accurate government accounts for 2008 and 2009. Greece was to submit an updated stability and growth programme under the EU’s excessive deficit procedure, on 15 January, and ministers will be eagerly awaiting a detailed run-through of the programme from their Greek counterpart, George Papaconstantinou.

The issue of warnings and sanctions will also feed into talks on the new EU2020 strategy, which have faltered at the first hurdle over whether or not member states should be punished for failing to meet growth and jobs targets.
Source:europolitics.info/

UAE's Dubai, Luxembourg aim to cooperate in financial services

DUBAI, Jan. 12 (Xinhua) -- Luxembourg's Crown Prince Guillaume Tuesday attended the signing of a Memorandum of Understanding (MoU)between his country and the Dubai International Financial Center (DIFC).

Home of 249 regional and international banks, insurers and asset managers, the DIFC has decided to cooperate in the future with Luxembourg in various fields including market access, financial regulations and infrastructure, training, and industry development for firms located in the two jurisdictions, according to the MoU.

Joined at the signing ceremony by a senior finance delegation which is currently visiting the United Arab Emirates (UAE), Crown Prince Guillaume encouraged firms from Dubai to do business in Luxembourg.

"The world's largest satellite operator company, SES Global, is based in Luxembourg and various Internet sales providers like Amazon, Skype and Ebay equally have chosen Luxembourg as their European headquarters," he said in a speech addressing the DIFC Authority, led by DIFC governor Ahemd Humaid Al Tayer.

Al Tayer welcomed the MoU with Luxembourg. "Luxembourg's uniqueness and strategic location in the center of Europe makes it a natural partner for the UAE which itself enjoys a key location in the Middle East," he said.

He also stressed that the UAE, of which Dubai is considered the city of finance, has taken effective measures to tackle the financial crisis.

"Some of the major policy measures taken by the UAE included a guarantee of all deposits by the Central Bank, the setting up of a50-billion-dirham (about 13.6 billion U.S. dollars) emergency liquidity facility, and the deposit of 70 billion dirhams in local banks by the government," he said.

Luxembourg has a tradition as a financial center in Europe and is specialized on the investment funds industry in particular. With lower tax rates than in neighboring France and Germany, it attracts capital as well as residents from both countries, which are member states of the European Union (EU) as Luxembourg is.

The country, which has a total population of only half a million people, is the second largest investment fund center in the world and the Eurozone's premier hub for private banking.

Its 148 banks contribute 38 percent to the country's GDP. Some 3,450 investment funds are registered in the tiny state, overseeing around 2 trillion euros (about 2.9 trillion dollars) under management. However, banks' cumulated balance sheet shrank by 19 percent in 2009 as a result of the global financial crisis.

With the MoU with Dubai, they hope to get better access to the Middle East, where private wealth is estimated at around 3 trillion dollars.

Source:xinhuanet.com/