http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_01/11/2012_468293

Magazine editor cleared of privacy violation

A court on Thursday cleared Costas Vaxevanis, the publisher of the Hot Doc magazine which last week published what it said was the so-called Lagarde list, of violating privacy laws.
A prosecutor had called for Vaxevanis to be found guilty for publishing a list of names of Greeks with Swiss bank accounts who were not necessarily tax offenders, claiming he had “offered blood and turned the country into a coliseum.” Vaxevanis countered that someone’s name in connection with their bank account is not personal data, declaring that the Lagarde list was “not a legal issue, but a very important social and political one.”
After a 10-hour trial, the investigative journalist was cleared.

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_01/11/2012_468299

Front-loaded plan banking on extension from creditors

Midterm policy program until 2016 foresees measures of 18.8 bln

By Sotiris Nikas

The midterm fiscal plan for 2013-16 tabled in Parliament by Finance Minister Yannis Stournaras on Wednesday provides for austerity measures worth 18.8 billion euros and will be put to the vote next week.

The first two years (2013 and 2014) will witness the implementation of measures amounting to 14.2 billion, which will be followed by unidentified measures totaling 1.9 billion in 2015 and 2.7 billion in 2016. The program was drafted under the assumption that Greece will secure a two-year extension to streamline its finances.

Two-thirds of the plan’s measures concern expenditure cuts, mostly in salaries, pensions and social benefits. Notably, the program provides for the state’s salary spending in 2016 to drop to levels unseen since 2000, i.e. 14.6 billion euros, down from 31 billion euros in 2009, according to European Commission data. The number of civil servants is seen being reduced by 80,905 by 2016 with the application of the rule for one hiring for every five departures. Additional tax measures to bring in revenues of 3.89 billion euros are planned for the four years of the program’s duration.

According to the plan, the general government deficit will end up at 5.5 percent of gross domestic product next year, dropping to 3.8 percent in 2014, rising again to 4.4 percent in 2015 and settling at 3.2 percent in 2016.

Unlike the budget, which foresees a primary surplus of 0.4 percent of GDP for next year, the midterm plan anticipates a primary balance at zero, with a surplus coming from 2014, at 1.5 percent of GDP. It will then climb to 3 percent in 2015 and 4.5 percent in 2016.

The plan is so front-loaded that almost half of the 18.8 billion euros in savings for the whole of the four years is expected in 2013 (9.3 billion euros), with another 4.1 billion in 2014. The Public Investment Program will shrink to 6.8 billion euros next year and 6.7 billion per year thereafter.

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_01/11/2012_468279

Investors sell on fears for bailout vote

The Greek bourse witnessed a certain degree of panic selling on Thursday due to increasing problems within the government coalition. It appears that investors are not just worried about the successful recapitalization of the country’s banks but also about the very question of whether the austerity package will survive next week’s parliamentary vote.
The Athens Exchange (ATHEX) general index ended at 761.24 points, shedding 5 percent from Wednesday’s closing figure of 801.32. The blue chip FTSE/ATHEX 20 index declined by 6.48 percent to close at 274.33 points.
The banks sectoral index saw all its 2012 gains wiped out on Thursday, with Piraeus giving up 16.11 percent, Bank of Cyprus 13.19 percent and National 11.73 percent. Coca-Cola HBC added 0.24 percent.
In total, 23 stocks registered gains, 111 posted losses and 16 stayed put.
Turnover came to 106.4 million euros, against Wednesday’s 80 million.

and.....

http://hat4uk.wordpress.com/2012/11/01/greece-exclusive-samaras-spearheads-new-centre-party-as-tsipras-courts-the-americans/

NOVEMBER 1, 2012 · 1:47 PM

↓ Jump to Comments

GREECE EXCLUSIVE: Samaras spearheads new Centre Party as Tsipras courts the Americans

Syriza and Golden Dawn still growing, PASOK down to 4%

Tsipras…extraordinary move towards the Americans

As predicted at The Slog’s Smoke Signals column two weeks ago, I have confirmation this morning that Antonis Samaras and other Greek luminaries are being encouraged to join him in a Centre Party that would take in the social democrat left and the great bulk of New Democracy supporters. But in an even more dramatic development, Alexis Tsipras the Syriza Leftist leader is engaging with the US presence in Greece to firm up the offer of a real alternative to the EU for Greece in the future.

After what he describes as “the great adventure of the measures”, New Democracy leader Antonis Samaras has made it clear to associates that he is ready to take the initiative in developing “a great European centre-right party”, having already made several soundings among senior MPs in Greece. As of now, I’m told, “it appears as an advantage to coordinate course and the harmonious coexistence of all the Parties close to Mr. Samaras’s axis of influence”.

The PASOK Health & Social Solidarity Minister Andreas Loverdos says in private that he is ready to be a star in this new firmament, which he describes as having a “European social democratic shape”….that is, something not too far from the old UK alliance between the SDP and the Liberals.

The two men are stressing their patriotic credentials at this stage, proclaiming the move as an historic step to keep Syriza and Golden Dawn at bay….both of whom are still forging ahead in the polls. But in reality, the move has been forced on them by the collapse of PASOK – now on a risible 4% level of support – and the desertion of third Coalition partner the Democratic Left.

However, in a totally unexpected strategic masterstroke, Syriza leader Alexis Tsipras is reportedly in close touch with US diplomatic contacts based in the region. Described by one source as having already been “active in persuading major business and municipal leaders and other key players of economic life here that he can pass through the gate of governance”, it now seems clear that Mr Tsipras wants to embrace the Americans, as he believes the Americans offer his country the best security blanket. The Slog has posted several times on the subject of American eagerness to befriend Athens, but traditionally the US has been a pariah State among the Greek Left.

Despite such history, another source confirms that, “Tsipras is getting guidance from US centres here. Papandreou opened a window for the Americans to the EU, but Tsipras could open the door of the Palace.”

Interestingly, Yannis Stournaras the Greek Finance Minister also has close links to senior American geopolitical players. And in recent months, Greece has moved closer to Israel and Cyprus as a bulwark against Turkey. But as a base against Islamism and easy access to deal with interruptions in oil supply, both the Pentagon and the Fed Reserve see Greece as an ideal partner to befriend in its hour of need. The Russian presence in Cyprus has also worried geopoliticians in the Obama Administration.

I have been saying for months that undersea energy and minerals could well dictate the course Greece takes in the end. These latest internal political moves have suddenly made that a more telling consideration.

http://www.zerohedge.com/news/2012-11-01/risk-greek-court-warns-troika-demanded-austerity-may-be-unconstitutional

Risk Off: Greek Court Warns Troika-Demanded Austerity May Be Unconstitutional

Submitted by Tyler Durden on 11/01/2012 11:23 -0400

Eurozone

Greece

HFT

International Monetary Fund

None

Reuters

While Europe continues to plan and scheme, content in the knowledge that Greece can do nothing to derail plans of status quo preservation, especially ahead of next week's critical parliamentary vote that will see the country imposing even more austerity on its people (see the great profile in the AP today in "Hit by crisis, Greek society in free-fall"), Greece has just decided to pull a "Karlrushe Kardinals who say Nein" move, and as Reuters reported moments ago, the entire process may be scuttled by none other than yet another court, this time in Greece:

GREEK COURT SAYS PLANNED PENSION CUTS, RETIREMENT AGE INCREASE SOUGHT BY EU/IMF LENDERS MAY BE UNCONSTITUTIONAL

What this means is that suddenly Greece once again has all the leverage (recall that last year the mere threat of a Greek moratorium cost G-Pap his job), a development which in June sent Europe plunging on fears that Greece may vote itself out of the Eurozone, leading to a Grexit, the return of the Drachma, redenomination, collapse in risk levels, the apocalypse and other bad things.

Judging by the reaction in the EURUSD, risk is now once again off.

More Greek Drama: Coalition Member PASOK "In Turmoil As It Seeks To Quell Rebellion"

Submitted by Tyler Durden on 11/01/2012 11:51 -0400

First it was news that Europe's weakest link may be broken following a Greek court doing the unthinkable, and actually enforcing the constitution, and now we learn that in addition to at least one definite defection from the Greek coalition government - PASOK (as reported earlier), the entire party is now on edge as its leader, former PM Evangelos Venizeloz seeks to quell a "rebellion" ahead of next week's vote which will hardly make the government any more popular in the eyes of the general population. From Kathimerini: "PASOK has plunged into turmoil as one MP and a prominent official quit the party following a fractious vote on the government’s privatization bill on Wednesday. The draft law paving the way for the sell-off of a number of utilities and ports passed narrowly and the failure of 17 PASOK MPs to support the legislation led to party leader Evangelos Venizelos, who failed to take part in the vote himself, calling an urgent meeting with his 33 lawmakers on Wednesday evening." Why is this relevant? Because two days ago, as reported, the third member of the ruling coalition: the Democratic Left, which mans 16 votes, announced it would vote against the Troika demands. This leaves the coalition with 160 votes on a matter in which it needs a majority. Should Pasok's 17 votes also be in danger of pulling out (assuming nobody from New Democracy votes no), then one can see why Greece may once again hold the fate of the Eurozone in its hands just as the US is voting for its next president and hardly needs more European drama.

Journalists were barred from the talks but the angry exchanges between party members spilled out into the street.

“Today in Parliament, we were like a lost herd,” said Cretan MP Nikos Sifounakis. “If we continue like this, the measures won’t pass. The government and PASOK will collapse.”

Following the meeting, MP Michalis Kassis said he was quitting the party but remaining in Parliament as an independent MP. He said Venizelos left him with no choice as he told deputies that whoever fails to vote for the upcoming fiscal and structural measures would be ejected from the party.

Kassis accused some of his colleagues of only supporting Prime Minister Antonis Samaras and the coalition government because they want to become ministers.

He also told journalists that several more PASOK MPs intend to vote against the austerity package in Parliament. The vote is likely to take place next week. The three-party government had 177 out of 300 seats after already losing one MP from New Democracy and another from Democratic Left, which insists it will not support the latest package unless the troika backs down over labor reforms. It now has 176 seats.

Former Agriculture Minister and once a candidate for the PASOK leadership, Kostas Skandalidis reportedly clashed with Venizelos over his handling of the party and refused afterwards to dismiss suggestions that there might be a challenge mounted against the party president.

On Thursday, former minister and PASOK secretary Mariliza Xenogiannakopoulou announced she was quitting the party.

Of course, we wish we could say vocal discontent ahead of a critical vote seeking to preserve democracy is something new in Greece, especially with everyone promptly following just as Merkel demands, but we can't. And also, why worry: after all didn't Bernanke say he can get any lawmaker to vote in a way that is compliant with the demands of the status quo after just 15 minutes alone with them?

Or was that ending hyperinflation? These days everything just blurs into one.

and.......

http://globaleconomicanalysis.blogspot.com/2012/11/deposit-wars-next-major-thing-to-blow.html

Thursday, November 01, 2012 12:44 PM

"Deposit Wars" an Act of Desperation by Spanish Banks; Bankia Déjà Vu

Acts of Desperation

Looking for the next major thing in Spain to blow sky high? I have a strong candidate in mind.

Bank deposits are down 154 billion euros this year and banks have resorted to paying unsustainable interest rates as high as 8% to attract money.

Via Google translate from El Economista, please consider war rages over deposits: Spanish banks are "desperate"

A new war between Spanish banks deposits threatens to destroy their already depleted profit margins by offering higher interest to depositors to attract new customers in a desperate battle for scarce capital.

Entities found new ways to avoid legal restrictions and encourage customers to leave deposits to buy notes, products which are not protected by the Deposit Guarantee Fund.

Spain is in the spotlight of the debt crisis in the euro zone and many of its banks are unable to raise money in financial markets, forcing them to attract customers with deposits with annual rates above 4%, and that in some extreme cases reach 8% - a figure well above the average rates in the euro zone, amounting to 2.7% within two years.

"Self-destructive strategy'

"It's a self-defeating strategy," said a banking analyst in Madrid. "The margins are falling. When banks have to resort to such practices is because they are desperate," he added.

Most Spanish banks offer more than 3% for new customers who deposit at least $ 3,000 for a year or more, although some entities like People or Ibercaja offer more than 4%. While banks need capital, rates are likely to continue rising.

"There will probably be an intensification of the war in deposits this quarter to post some good numbers at the end of the year", said the chief executive of Bankinter, Maria Dolores Dancausa told analysts on a conference.

Depositors Beware!

"Superdepósitos" penalties were lifted in August and bank deposits have somewhat stabilized.

However, banks are paying far more for deposits than they can get for mortgages and other loans. Moreover the mortgage business and indeed the entire lending business in Spain is a disaster.

This setup cannot possibly end well for those chasing high rates, so it won't.

Bankia Revisited

Many Bankia investors thought they were making government guaranteed deposits, but in reality they were buying debt instruments later wiped out in bankruptcy. The same thing appears to be happening again.

Consider the May 29, 2012 Bloomberg article Bankia Depositors Buying Bonds Leave Spain on Bailout Hook

Bankia is among Spanish lenders that sold 22.4 billion euros ($28.2 billion) of preferred stock to individual investors through retail branches, according to data compiled by CNMV, the financial markets supervisor. In a so-called bail in, these investors would be wiped out before holders of more senior bonds, which tend to be banks and institutions.

Fernando Herrero, the secretary general of ADICAE, a Madrid-based association of clients of financial institutions, estimated that about 1 million Spanish households bought banks’ preferred shares, some of which have been converted to common equity or subordinated convertible bonds.

“The instruments were marketed as very liquid and as safe as a deposit,” said Herrero, who described issuing the risky securities to individual investors as an “original sin.”

Next consider my June 28, 2012 post Bankia Valued at EUR -13.635 Billion; Spain Becomes Sole Owner, Shareholders Totally Wiped Out; Entire Bankia Board Resigns.

Déjà Vu All Over Again

There is no way Spanish banks can pay 3% interest, let alone 8% interest on deposits. Anyone taking such offers is bound to get hammered down the road in debt-to-equity conversions.

Expect "Déjà Vu All Over Again" because more Bankia-type blowups are surely on the way.

Mike "Mish" Shedlock

http://www.zerohedge.com/news/2012-11-01/something-goes-bump-halloween-night-ecbs-marginal-facility-usage-soars

Something Goes Bump On European Halloween: ECB's Marginal Facility Usage Soars

Submitted by Tyler Durden on 11/01/2012 07:56 -0400

Credit Line

European Central Bank

fixed

LTRO

Sovereigns

Europe is, supposedly, fixed: between the upcoming one year anniversary of the 3 year LTRO, which has flooded the continent in excess €1 trillion of liquidity, and the OMP, which has supposedly backstopped sovereigns in perpetuity (even though the market has fully frontrun what now appears to be a massively unpopular political decision, as Spain has been demonstrating for the past 2 months), European bank liquidity needs are supposed to be fully taken care of. Yet something went bump on Halloween. As the ECB reports, borrowing on the prohibitive, and largely "last resort" ECB "Marginal Lending Facility" (whose rate is anusurious 1.50%), one or more banks saw their need for EUR explode in the last day of the month, sending overall usage on this credit line to €7.8 billion, the most since mid-March, and a surge of over €7 billion overnight. What spooked European banks so much (whose liquidity needs are not month or quarter-end window dressing driven) that the ECB had to step in on top of everything else it has already done? We will surely find out soon.

http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_01/11/2012_468131

PASOK in turmoil as Venizelos tries to quell rebellion

PASOK has plunged into turmoil as one MP and a prominent official quit the party following a fractious vote on the government’s privatization bill on Wednesday.
The draft law paving the way for the sell-off of a number of utilities and ports passed narrowly and the failure of 17 PASOK MPs to support the legislation led to party leader Evangelos Venizelos, who failed to take part in the vote himself, calling an urgent meeting with his 33 lawmakers on Wednesday evening.
Journalists were barred from the talks but the angry exchanges between party members spilled out into the street.
“Today in Parliament, we were like a lost herd,” said Cretan MP Nikos Sifounakis. “If we continue like this, the measures won’t pass. The government and PASOK will collapse.”
Following the meeting, MP Michalis Kassis said he was quitting the party but remaining in Parliament as an independent MP. He said Venizelos left him with no choice as he told deputies that whoever fails to vote for the upcoming fiscal and structural measures would be ejected from the party.
Kassis accused some of his colleagues of only supporting Prime Minister Antonis Samaras and the coalition government because they want to become ministers.
He also told journalists that several more PASOK MPs intend to vote against the austerity package in Parliament. The vote is likely to take place next week. The three-party government had 177 out of 300 seats after already losing one MP from New Democracy and another from Democratic Left, which insists it will not support the latest package unless the troika backs down over labor reforms. It now has 176 seats.

Former Agriculture Minister and once a candidate for the PASOK leadership, Kostas Skandalidis reportedly clashed with Venizelos over his handling of the party and refused afterwards to dismiss suggestions that there might be a challenge mounted against the party president.

On Thursday, former minister and PASOK secretary Mariliza Xenogiannakopoulou announced she was quitting the party.

In a letter to Venizelos, the 49-year-old former health minister said she was quitting PASOK in protest at the anticipated austerity measures and developments inside the party which was recently polled in sixth place.

Xenogiannakopoulou failed to win a parliamentary seat in the last general elections.

http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_01/11/2012_468141

German government official says still many open questions on Greece

The troika of international lenders still has many open questions regarding debt-laden Greece to resolve before reaching an agreement on the payment on the next tranche of aid to the country, a German government official said on Thursday.
The official said that Greece would not be a central topic of the meeting of Group of 20 leading economies in Mexico this weekend but it would likely be discussed on the sidelines.
"There are still open questions, a whole series of open questions regarding Greece within the Troika, but then also within the Eurogroup,» said the official.
The official said that Germany would ask the United States again how it was planning to do about its so-called «fiscal cliff» but was braced for the answer again that this could not be resolved until after the presidential elections.
The U.S. said on Wednesday that the nation would hit the legal limit on its debt near the year's end.
"You understand that from a European view, these are important questions also for the world economy that we want to factor out,» the German government official said.
"We are prepared to talk about our topics transparently but, please, we expect the same also from our European and our international partners."
The Mexico City meetings of G20 finance ministers and central bank governors follow talks in Tokyo more than two weeks ago, which endorsed a checklist of policy reforms aimed at pressuring Europe and the United States to tackle their debt troubles. [Reuters]

http://www.telegraph.co.uk/finance/debt-crisis-live/9647397/Debt-crisis-UK-PMI-data-dampens-recovery-live.html

12.12 Staying in Greece where Kostas Vaxevanis, the Greek journalist who published the names and occupations of more than 2,000 Greeks allegedly holding accounts at the Swiss branch of HSBC, has appeared incourt charged violating privacy laws for publishing the names of overseas bank account holders, and faces two years in prison if found guilty.

11.55 Over to Greece where Pasok has received another resignationthis morning (see 10.41). eKathimerini is reporting that Mariliza Xenogiannakopoulou has became the latest Socialist to leave the embattled party.

In a letter sent to Pasok leader Evangelos Venizelos, the 49-year-old former Health Minister said she was quitting PASOK in protest at the anticipated austerity measures as well as at recent developments within the once-dominant party which was recently polled in sixth place.

Xenogiannakopoulou failed to win a parliamentary seat in the last general elections.

11.34 The good news for Ireland just keeps on coming (see 09.12). The number of people claiming unemployment benefit in Ireland fell by 1,000 in October to a seasonally adjusted 434,200, keeping the standardised unemployment rate at 14.8pc, the Central Statistics Office said,

Unemployment benefit figures, which include part-time, seasonal and casual workers and are not designed to measure the number of people unemployed, have stabilised in recent months and October's headline figure was the lowest this year.

Economists polled by Reuters see jobless claims falling to 431,000 by the end of the year in the Emerald Isle, lowering the unemployment rate to 14.7 percent.

11.25 More reaction to that defeat in the Commons for Cameron. Robin Brew, chief economist at the Economist Intelligence Unit, says it boosts the chance that the UK's role in Europe will fade.

11.16 Rowena Mason reports from Chatham House, where Nick Clegg has said that the Lib Dems will play no part in taking back powers from the EU without absolute assurances that Britain can opt back in.

Nick Clegg has launched an attack on Tories who want to “unravel” Europe by clawing back powers, after the Government lost a vote to rebels demanding a cut in the EU budget.

The deputy Prime Minister’s remarks will be interpreted as a swipe at David Cameron, who has promised to repatriate powers from Brussels.

Speaking at Chatham House, Mr Clegg said the Lib Dems will play no part in taking back powers without absolute assurances that Britain can opt back in.

Mr Clegg said there is "no hope" of a cut in the EU budget, as no other country is demanding such a reduction. And he added that failure to get a deal on the budget at a Brussels summit later this month may actually be more expensive for Britain.

11.12 A day on the Debt Crisis live would not be complete without aprotest and today there is one in Greece.

This private hospital nurse Paraskevi Petropoulou holds up her unpaid electricity and income tax bills during a protest outside the Health Ministry in central Athens, AP reports.

Petropoulou said that she has not been paid for more than five months, because the government owes money to private hospitals who in turn are unable to pay their employees.

11.05 Back to Greece where a German government official said the debt-laden country would not be a central topic at the G20 in Mexico this weekend, but it would likely be discuss on the sideline, eKathimerini reports.

"There are still open questions, a whole series of open questions regarding Greece within the Troika, but then also within the Eurogroup," said the official.

The troika of international lenders still has many open questions regarding debt-laden Greece to resolve before reaching an agreement on the payment on the next tranche of aid to the country, the official added.

10.50 From today in France, 28,000 citizens who have worked since the age of 18-20 and who have paid into a pension scheme for the required period will benefit from President François Hollande's promise for a partial return to the retirement age of 60, raised to 62 by Nicolas Sarkozy in 2010.

This will cost €1.1bn - and employers and employees will pay for it, also from today, Le Figaro reports (in French).

10.47 Moving over to Italy now where Reuters is reporting that prime minister Mario Monti's government has agreed to overhaul next year's budget plans by replacing a planned income tax cut with a reduction inpayroll costs.

Eliminating the income-tax reduction will free up €4.3bn (£3.4bn) next year, and €6.6bn in 2014. The exact form of the labour cost cuts have yet to be determined.

A planned one-percentage-point increase in the highest value-added-tax rate will still go into effect in July, bringing it to 22pc, but the lower 10pc rate will not be increased as previously planned, lawmakers said.

Tax hikes and spending cuts imposed by Monti to try to bring public finances under control have exacerbated a recession in the euro zone's third-biggest economy, and increasingly been the focus of street protests and opposition political attacks.

With unemployment at almost 11 percent, the highest recorded since monthly measurement began in 2004, Monti has been under growing pressure to do more to stimulate growth.

10.41 Staying with Greece where one one of the ruling parties, Pasok, has been plunged into turmoil as one MP and a prominent official quit the party following a fractious vote on the government’s privatization bill on Tuesday. eKathimerini reports:

MP Michalis Kassis said he was quitting the party but remaining in Parliament as an independent MP. He said [party leader Evangelos ] Venizelos left him with no choice as he told deputies that whoever fails to vote for the upcoming fiscal and structural measures would be ejected from the party.

Kassis accused some of his colleagues of only supporting Prime Minister Antonis Samaras and the coalition government because they want to become ministers.

He also told journalists that several more PASOK MPs intend to vote against the austerity package in Parliament. The vote is likely to take place next week. The three-party government had 177 out of 300 seats after already losing one MP from New Democracy and another from Democratic Left, which insists it will not support the latest package unless the troika backs down over labor reforms.

10.29 Greece has also had some PMI figures out this morning and they are not good.

October data showed another steep decrease in the level ofmanufacturing output in Greece, which reflected not only lower demand in the domestic economy but also a further marked drop in export orders, which fell at the steepest rate since early 2009.

The Purchasing Managers’ Index – a composite indicator designed to provide a singlefigure snapshot of the performance of the manufacturing economy – posted at 41.0 in October, down from September’s reading of 42.2, indicating another sharp deterioration in the performance of Greece’s manufacturing sector.

09.38 Back to the UK which has also had PMI figures out this morning which showed that the downturn in UK manufacturing had accelerated at the start of the final quarter.

At 47.5 in October, from a revised figure of 48.1 in September, the seasonally adjusted Markit/CIPS Purchasing Manager’s Index fell for the second successive month and to its lowest level since July this year.

09.12 Good news for Ireland this morning as the manufacturing sectorsaw growth for the eighth month in a row as the seasonally adjusted NCB Purchasing Managers’ Index (PMI) rose to 52.1 in October, from 51.8 in the previous month.

08.29 So last night David Cameron suffered a stinging defeat over the EU budget.

The defeat came after more than 50 Conservative rebels were joined by Labour MPs in supporting a demand for real-terms reductions in spending by Brussels. James Kirkup reports:

The Government was defeated by 307 votes to 294, a majority of 13. Commons sources estimated that 51 Tories voted against the Government, with two more acting as tellers.

The vote was Mr Cameron’s second major Commons defeat over Europe and led to warnings that division in the Conservative Party over Europe could hamstring him as it did Sir John Major during the 1990s.

The vote is not binding, but will put Mr Cameron under intense pressure to take a harder line in talks on the EU budget at a summit in Brussels later this month.

Catharsis Ours

Thursday, November 1, 2012