And there are several story lines unfolding in parallel:
- Osborne went on record over the weekend, saying that a new EU treaty to fix the eurozone is now "on the cards". According to the Telegraph, a proposal will be tabled in the autumn which would see negotiations over the Treaty commence as early as December. This is clearly a moving target - and we shouldn't draw hasty conclusions. But potential talks over a new EU treaty so soon is clearly big news.
- It comes as a group of 90+ MPs will meet tonight in Westminster, as part of a new initiative to help the Government come up with constructive ideas for how to re-order the UK's relationship with Europe. In an interview with Saturday's Times, Foreign Secretary William Hague appeared to semi-endorse the group, saying: "I was talking to some of them about it last night…It’s certainly not career suicide. I’m always pleased by good, healthy, democratic debate. They’re not approaching it in a confrontational spirit. They will be welcome in this office to discuss it.”
- Osborne also said over the weekend that Hague was drawing up a list of demands for powers to be repatriated to Britain in return for treaty change. To us, it seems increasingly as though the UK government has made a policy shift over recent weeks, and is now openly acknowledging that the aim is to bring some powers back should a new EU Treaty be up for negotiation.
- ECB Chief Economist Jürgen Stark resigned from the ECB’s Executive Board on Friday “for personal reasons” – although the move is almost certainly linked to disagreements over the ECB’s on-going purchases of weaker eurozone countries’ bonds. As Handelsblatt notes, his resignation has made it clear that "Germany's stability culture has not managed to prevail within the ECB. The Central Bank is increasingly becoming an instrument of politicians."
- Ambrose notes in the Telegraph, this move marks "a German vote of no confidence in EMU management." The decision has thrown global markets into fresh turmoil.
- German media report that officials at the German Finance Ministry are looking into the consequences of not lending Greece more money. Two scenarios are being discussed, according to Der Spiegel: Greece going through a hard default but remaining in the eurozone; or going through a hard default and leaving the single currency.
- In a further sign of the tensions within Germany, the junior coalition partner to Angela Merkel, the FDP, are planning to organise an internal referendum on the future of the European Stability Mechanism (ESM), the eurozone’s post-2013 permanent bailout fund. The article notes that 3,400 signatures – about 5% of FDP members – are needed to call this referendum. If one-third of party members take part in the vote, the result becomes official party policy.
- In an interview with Greek TV channel Mega, Greek Deputy Finance Minister Filippos Sachinidis has warned that Greece will run out of liquidity next month, if the next tranche of the first EU/IMF bailout is not paid out.
There's clearly no such thing as a quiet EU news week any more.