High risks of money laundering, errors in bank records, missing identity checks and obscure customer records are all rampant in Cyprus’s banking sector, according to a leaked EU report that could trouble the conditions of the country’s €2bn taxpayer-funded bailout package.

At the request of eurozone finance ministers, EU monitoring body Moneyval and US accountancy firm Deloitte investigated the activities of six Cypriot banks and their biggest clients and drew up the report in April.

A leaked version of the report’s summary, published over the weekend by Cypriot website Stockwatch, shows 58 per cent of one bank’s clients pose a “high risk” of money laundering and almost a third of all bank depositors’ records contain errors.

Other findings suggest that file information on 27 per cent of depositors and 11 per cent of borrowers displayed “inaccurate information on the customer and beneficial owner”, that identities of customers were unclear in up to 75 per cent of international business cases, and that proper ID checks on “complex” structures were carried out in only 9 per cent of all cases.

EUObserver questions whether Cypriot banks are effectively monitoring their own clients, since the banks

launched just four internal probes on potential money laundering [...] between 2008 and 2012. They reported zero ‘suspicious transactions’ to Cypriot authorities in 2008 to 2010, one in 2011 and ‘a few’ in 2012. But Deloitte identified 29 of them in the last 12 months alone.

The site says the report “gives the lie to Cypriot diplomats and politicians who have been telling media in recent months the island adheres to international standards” and also suggests a potential problem for German Chancellor Angela Merkel, who vowed to clean up Cyprus as German MPs approved the EU bailout package.

EUObserver quotes an unnamed diplomat looking ahead to September’s elections: “If German people saw the report, they might say: ‘I would not give my money to such a country.’”

Approximately 4,500 British tax residents have benefitted from the Liechtenstein Disclosure Facility. Under the terms of the scheme, which was agreed by London and the Principality of Liechtenstein in August 2009, British tax evaders have been given an opportunity to disclose untaxed fortunes in Liechtenstein, where they will be subject to a penalty amounting to 10 percent of their value.

Some 2,940 adjustment procedures have been conducted, with an average net benefit to the British exchequer of “£174,000 [approximately €205,200 euros], which represents an overall figure of £523m [about €616.78m],” explains Liechtensteiner Volksblatt.

The success of the scheme “has exceeded expectations,” enthuses the daily, which adds that “most of the funds revealed were from external capital,” which has brought “fresh money” to Liechtenstein’s banks. The United Kingdom has prolonged the scheme until April 2016.

Beijing has threatened to contest the European Commission's decision to impose taxes on Chinese solar panels and telecommunications equipment before the World Trade Organisation.

Germany, which accounts for more than half of the EU’s exports to China, has voiced its concern over the power struggle and called for an amicable settlement.

“It is high time that Europe gave up its fascination with the size of the Chinese market and demanded, like the United States, a minimum of fair exchange”, argues Le Figaro, which adds —

The interdependence of global economies will add to pressure for an amicable settlement, as desired by Berlin. But for that, it is time for Europe to put its foot down and to set aside any naivety. Given China’s rapid rise to power, soon it will be too late.

In an interview with Bild am Sonntag, Bundesbank President Jens Weidmann has “poured cold water on the European Central Bank’s timid economic stimulus policy,” notes La Vanguardia.

Weidmann argues that the ECB and France “are slacking in the fight against the causes of the crisis.” He is particularly critical of the reduction in interest rates decided by the ECB and the decision to allow France more time to meet its deficit targets.

The daily reports that, for his part, Mariano Rajoy has decided “to go on the offensive.” The Spanish Prime Minister is preparing for a June 5 meeting in Brussels in which he is hoping to convince the European Commission of the validity of his reforms.

Labour Minister Enrico Giovannini announced a €12bn plan – half coming from EU funds – to create 100,000 jobs for people aged under 24 people, as part of a plan to cut youth unemployment by 8 per cent.

The measures, which should be ready by June, will not include the reductions in labour costs demanded by analysts and employers, but focus instead on easing short-term contract regulations and partially undoing reforms introduced by Mario Monti’s government.

With figures showing one in five young Italians is unemployed, the government is trying to follow initiatives taken elsewhere in Europe, but the issue could prove a divisive and dangerous one for the fragile coalition, warns La Repubblica.

Will EU plans to impose import duties have their intended impact? According to NRC Handelsblad, “installing Chinese solar panels is a lucrative business in Europe.” In the Netherlands, the solar energy sector has been marked “by spectacular growth,” in spite of the economic crisis. The newspaper explains that —

… vast numbers of entrepreneurs and companies in the electrical installation business, who were hard hit by the crisis in the construction industry, have eagerly moved into the solar panel installation. As it stands, they are able to get by thanks to Chinese equipment. They really do not need a European tax that will make solar panels more expensive [...] AFASE[the organisation which defends the interests of European solar installers] is worried that the taxes could result in 242,000 job losses across Europe — a figure that is vehemently contested by the supporters of import duties, like German panel manufacturer SolarWorld.

NRC Handelsblad points out that the European Commission will decide on the issue of import duties at the end of May. If it rules in favour of the measure, duties will be imposed from the beginning of June, although they will not definitively established until December. They could also be applied retrospectively to transactions dating back to March 6, 2013.

With an average growth of -0.2 per cent in the first quarter (against -0.1 per cent in the EU as a whole) and hardly better prospects for the whole rest of the year (-0.7 per cent), according to Eurostat, the dreaded "double dip" has become a reality. The press attributes the result largely to the austerity policies.

“Eurozone sets bleak record of longest term in recession,” headlines the Financial Times. The economic daily notes that “this latest dismal record came after unemployment hit 12.1 per cent in the bloc, its highest level,” and that this data “is likely to add to pressure on the European Central Bank to take further action after cutting interest rates this month, and to revise down its economic forecast predicting a recovery later in the year.”

For the Financial Times, the new data, which showed France had fallen back into recession, put further pressure on French President François Hollande to implement economic structural reforms —

In Paris, Les Echos expects that the recession, now official, will "force France to reform". On the same wavelength as the FT, Jacques Attali, an economist and former adviser to François Mitterrand, calls on François Hollande to push through "shock reforms" –

For România liberă, the recession in the Eurozone has taken Europe “into the red” in 2013. The poor performance of the European economy, the Bucharest daily notes is raising worried eyebrows even across the Atlantic. There –

"Eurozone mired in recession," headlines El Correo – "the longest in its short history,” adds the daily, continuing –

The Netherlands, “which are going through the worst economic period since the end of the War", have not dodged the downward trend either. Here, however, "consumers are escaping a severe recession," headlines NRC Handelsblad. With a fall of 0.1 per cent in the first quarter of 2013 compared to the same period in 2012, the daily explains, the recession that started in the third quarter of last year is still here. The daily’s analysis is based on the figures published by the Central Office for Statistics on May 14. While those figures may not be that dramatic, stresses NRC, thanks to a few "bright spots" –

The ups and downs of the Eurozone have also had repercussions on the countries outside the zone. In the Czech Republic, for example, the crown has suffered a backlash, losing 6 per cent against the euro since September 2012 notes Hospodářské noviny in Prague. For the economic daily –

“Europe’s suffocating,” headlines Gazeta Wyborcza, which pins the blame squarely on the policy of austerity: “Belt-tightening is driving us into recession,” warns the daily, as Poland’s statistics office announced that the country’s economy grew only by 0.4 per cent year-to-year in the first quarter of 2013 – the worst result in the last four years, and following six successive quarters of recession in the Eurozone.

GW quotes ING Chief Economist Mark Cliffe, who believes that “if the current strategy of belt-tightening is continued, we’ll see more countries going bankrupt.” The daily notes that the economic situation is particularly bad in the countries that have introduced the strictest austerity measures, such as Spain, Italy, Portugal, Cyprus, and Greece.

The European Parliament will propose that deposits over €100,000, mainly held by companies, get to enjoy greater protection under the new bank resolution mechanism to be adopted by the European Union.

Jornal de Negócios says that the idea is that depositors will "only to be forced to take part in a rescue as a last resort, because they have more protection compared to bondholders."

The proposal will be presented at the Committee on Economic and Monetary Affairs next Monday, Negócios reveals, quoting a source in the European Parliament.

Negotiations will then take place within the European Council, where there is currently only a consensus about guaranteeing deposits of up to €100,000.

“Spain is under the European Union’s magnifying glass” states the Catalan daily, as the Spanish government tries to avoid being forced to take part in a new European Commission regulation system, as it struggles to implement economic reforms.

The “macroeconomic imbalances procedure” is designed to deal with the lagging competitiveness and overstretched banking systems that fuelled the debt crisis.

The procedure for Spain would include a host of new reforms that will be monitored periodically by inspection visits by EC experts. A decision on whether Spain will have to comply with the new procedure regulations will be announced on May 29.

German officials have criticised the policy of austerity and tax increases – the two economic tools favoured by the troika of international leaders – accusing the European Commission of incompetence and stiffness, reports the daily.

"Berlin considers tax increases to be a mistake, which penalises disadvantaged populations and kills economic growth," writes Público, without identifying its sources.

"Berlin’s irritation" is particularly aimed at the European Commission and its President José Manuel Barroso, which the newspaper says paradoxical, "as many of the austerity conditions applied to countries within the rescue programme are implicitly presented in Brussels as result of German demands."

According to the Finnish Finance Minister Jutta Urpilainen, “it was the Greeks who wanted to keep it secret”. However, the Finnish Supreme Administrative Court decided otherwise, and on May 14, the Government was forced to publish the terms of the contract it signed with Greece in 2012.

Under the agreement Athens pledged to provide financial collateral in exchange for a loan which formed part of the international bailout for the country.

The documents reveal that Finland and the Greece set up three bank accounts into which the money and financial securities used as collateral have since been deposited.

The matter had been referred to the court by the True Finns party and several media outlets, including Helsingin Sanomat. The daily is pleased with this “important and expected” decision —

It will strengthen the principle of the broadest possible implementation of transparency and publicity by government. The public has a right to be informed of all relevant official documents. [...] Helping the weak countries of the eurozone is a naturally difficult and controversial issue in Finland. Confidential documents will only serve to undermine confidence in decisions politicians have taken in the eurocrisis.

In the course of the eurozone crisis, Finland has stood out from among the eurozone states by demanding collateral from countries in difficulty as a condition for financial aid. The deal with Greece served as model for another deal concluded with Spain in July 2012.

"Fight against tax fraud: Europe stalls," headlines Belgian daily Le Soir. In its May 15 edition, the newspaper reports that the Brussels meeting of the European Union Finance Ministers council (ECOFIN) failed to reinforce regulations to fight tax fraud, as requested by European authorities, and in particular the Commission.

The goal of the meeting, which was held in preparation for a summit on this issue scheduled for next week, was to extend the current tax agreement on savings to other sources of revenue such as investment portfolios, and to discuss the automatic exchange of data. But ECOFIN stumbled over opposition from Austria and Luxembourg, both of which are hoping to delay the lifting of banking secrecy laws. Le Soir further reports that —

During a joint press conference, the two countries explained that they could not accept the automatic exchange of data if other countries located outside of the European Union did not also play the game as well. Their target is, obviously, Switzerland.

Austria and Luxembourg did however agree to mandate the Commission to negotiate with Switzerland, Andorra, Monaco, Saint Marin and Liechtenstein — a move that has been awaited in Brussels for several years.

For German weekly Stern, the EU has "taken a step forward in its fight against undeclared revenues and tax evasion". The magazine recalls the extent of "the complexity of the situation in which EU ministers found themselves" until now —

… on the one hand they spent years lambasting international tax havens and threatening to drain their resources. At the same time, within their own ranks, Austria and Luxembourg acted hardly any better than these much maligned countries by categorically refusing to share data on revenues generated by capital belonging to people suspected of tax evasion. Now an exit strategy seems possible.

According to a report on inequality and poverty in OECD member countries, Sweden is the state where the gap between low and high incomes is increasing fastest.

Sweden is still one of the top 10 countries for economic equality, however, Svenska Dagbladet points out that —

… most Swedes have experienced an increase in their standard of living in recent decades, but the wealth gap is growing fast. […] Sweden is the country where the level of relative poverty has increased the most since 1995 [from 4 per cent of the population to 9 per cent], which is why it has slid from first place to 14th position in the rankings, although it still remains over the OECD average of (11 per cent of the population in relative poverty).

According to the newspaper, the negative change, which “began to hit home at the end of the 2000s,” mainly affects —

… the sick, the unemployed and pensioners, who are worse off today than they were in 2006. Their benefits have not increased, and, in some cases they have been reduced. At the same time, they have not gained any advantage from the tax cuts offered by the [Fredrik] Reinfeldt government.

“Now that the Eurozone crisis is over, time to finish the job with the banks,” announces the front-page of NRC Handelsblad, in the wake of the European Central Bank President Mario Draghi’s May 11 remarks that “the ECB will examine the possibility of buying property loans from banks.” For the daily, this assertion is confirmation that in both Brussels and Frankfurt, the view is that “the worst of the Eurozone crisis has passed.”

“Now”, notes the daily, “we are beginning to see the underlying problem, which is that many banks have yet to be completely cleaned up.” Even though the Eurozone crisis resulted from the 2007 banking crisis — when states took on debts to restore liquidity and prevent the collapse of national banks — there are still too many banks with toxic assets on their books.” NRC explains that these zombie banks, have meant that the European economy is like “a fish out of water,” because they create a climate in which banks are unwilling to lend, and consumers are unwilling to spend.

In contrast to the United States and Switzerland, where measures to resolve the banking crisis proved more effective, one of the problems in the Eurozone is that banking supervisors “encounter opposition from politicians,” who, as the newspaper points out —

… do not have a mission to clean up the European economy, if that means closing their own banks. No, their mission is to keep national champions on their feet. In an landscape crowded with pan-European banks, supervisors take shelter behind national boundaries, and exchanges of information are rare, and even dishonest.

A banking union could resolve this problem, but it would require modification of European treaties, adds NRC, which alludes to a recent article by Wolfgang Schaüble in the Financial Times, in which the German Finance Minister affirmed that the ECB could not repair balance sheets, because that would amount to “monetary financing.”

The Swedish company H&M and the Spanish group Inditex, which owns Zara, “are to sign a legally binding building and fire safety agreement” for factories producing their clothing in Bangladesh, reports De Morgen.

The initiative has come three weeks after the collapse of a building in Dhaka, which resulted in the death of 1,100 people.

The daily notes that marketing experts believe the “move by the garment makers has mainly been motivated by pressure from consumers and public opinion, and fears that their reputations may be compromised.”

"The European Union prepares its entire arsenal to fight youth unemployment," writes the financial daily, as the French and German governments prepare to unveil a €60bn plan, known as the “New Deal for Europe”, on May 28.

The new scheme will mastermind a seven-year push to find jobs for people aged under 25, while Brussels will also ask European countries with high unemployment to go even further with their labour market reforms, continues the daily.

Meanwhile European Employment Commissioner Laszlo Andor prompted Spain on May 13 to adopt “a single open-ended contract” to fight youth unemployment, but Spanish PM Mariano Rajoy, refuses to introduce further labour market reforms.

“Eurozone finance ministers agreed to authorise the payment of a double tranche of aid to Greece worth €7.5bn at a meeting held in Brussels on May 13,” reports I Kathimerini.

“The first tranche of €4.2bn will be transferred on May 17, and the second is to follow in June,” notes the daily, which points out this payment will be conditional on an overhaul of Greece’s tax system, the liberalisation of certain professions and the reform of the country’s civil service.

The daily adds that “the European Commission reckons deficit targets for 2013 and 2014 will be met. However, it also believes that further efforts to the tune of €7.6bn will be required for 2015-2016.”

“British and American speculative funds are gambling on the recovery of Greek banks,” explains Der Standard, which points out that —

Hedge funds are once again buying bank shares and corporate bonds to take advantage of the high yields they offer.

Since June 2012, speculation on government bonds has netted them hundreds of millions of euros, adds the daily.

The Eurogroup approved the release of a €3bn tranche of aid to Cyprus at a meeting on May 13, of which €2bn was transferred on the same day. The third billion is to be delivered in June in the form of Treasury bills. The transfers are part of a €10bn bailout package, which was agreed in March.

In exchange for the release of funds, Phileleftheros reports that the Eurozone finance ministers have “demanded that Nicosia and the EU-ECB-IMF troika establish an action plan on the thorny issue” of money laundering. They are also insisting on the “rapid application of the adjustment programme” agreed by the Cypriot government with its creditors.

In Belgium this year, “€63.17bn will change hands in the black economy,” reports De Morgen. The Brussels daily reports that according to a study conducted in 31 European countries by the Johannes Kepler University in Linz, Austria, the Belgian shadow economy represents 16.4 per cent of total economic activity of the country. That is the lowest level in 10 years, but still the highest of all West European countries: in Germany the rate is 13 per cent, while it is 9.9 per cent in France and 9.1 per cent in The Netherlands.

The average size of the European black economy is 18.5 per cent of GDP, a decrease from 22.3 per cent in 2003, notes De Morgen, adding that eastern Europe is the area that rates the worst in Europe.

Despite the strong growth of the economy, the black market there is still big, with peaks above 30 per cent in Bulgaria. Still, there is some improvement. In southern Europe that is no longer the case. The push back of the informal economy has stagnated. Countries like Portugal, Spain and Italy have a black economy of around 20 per cent of the official one. In Greece that number goes up to 25.4 per cent. For the entire European Union the shadow economy is estimated at €2.1trn.

One solution would be to “discourage the use of cash,” the newspaper writes:

For real estate transactions – even for advances – paying in cash will soon be forbidden. It would be logical to expand this to sectors such as the art trade and the buying and selling of second hand cars and jewellery.

Meeting in Brussels on May 13, Eurozone finance ministers are expected to approve the first tranche of €3bn in aid for Cyprus. “Two billion euros will be transferred in mid-May, and a third billion at the end of June,” reports Politis.

The newspaper points out that of the €10bn stipulated in the memorandum of agreement with the EU-ECB-IMF troika of international creditors, “€9bn will be provided by the European Stability Mechanism and €1bn by the International Monetary Fund,” and adds that the IMF contribution “will have to be discussed and approved on May 15.”

“Eurogroup will also examine a report on money laundering in Cyprus,” reports the daily, which notes that —

… Finland and Slovakia have demanded that transfer of the tranche be subject to additional conditions focusing on laundering by Cypriot banks.

The European Commission may drop the excessive deficit procedure against Hungary, "on condition that it stays on course for budgetary consolidation."

On May 3, Brussels acknowledged that Hungary’s deficit was well below 3 per cent of GDP in 2012, but that it is expected to rise slightly above this threshold in 2013 and 2014.

The government led by Viktor Orbán announced that it would adopt measures which are "compatible the country’s current social and economic policies," that is to say: it will refuse to implement "measures demanded by the Union of other countries: no tax increases on individuals or SMEs, and no reduction in welfare spending."

“Wall Street’s renewed health is spreading to other markets, and in particular to Europe, which is a poor relation in terms of economic growth,” writes Les Echos.

In Frankfurt, the DAX “has gained 124 per cent since March 2009,” while the FTSE in London “has reached its highest level since November 1, 2007”.

For the business daily, “the markets have benefited from a number of favourable elements,” notably encouraging figures for industrial production in the United Kingdom and Germany, positive corporate results, and a calming of tensions on the issue of sovereign debt.

The stabilisation of the debt crisis —

has reassured investors, who did not fail to take advantage of Portugal’s return to financial markets [an encouraging sign for Greece which is hoping to resume bond sales before 2014].

Prime Minister Alenka Bratušek has announced a vast programme of privatisations and an increase in the Value Added Tax from 20 to 22 per cent on July 1. Expected for several days, the measures, which were made public on May 8, aim to preempt the risk of a banking crisis without calling on international aid.

For now, the government has set aside plans for an “emergency tax”, although it may be introduced at a later date if the new measures fail to have the intended impact, explains Delo. The newspaper adds that the goal is to reduce the country’s spending deficit, which is expected to rise from 4 per cent of GDP in 2012 to 7.8 per cent in 2013, to 3.3 per cent in 2014. It has also entered into negotiations with unions with a view to cutting public service salaries.

Fifteen state-owned companies are to be privatised. They include the country’s second largest bank, Nova KBM Bank, its main telecoms operator, Telekom Slovenia, the Adria Airways airline, and the operator of Ljubljana airport.

"The quality of the land, good prices and the possibility of obtaining subsidies have attracted foreign investors," points out Jurnalul Naţional, which reports that several European newspapers have described Romania as a "new Eldorado".

Under the terms of the country's EU accession treaty, Romania is obliged to deregulate its property market from January 1, 2014 — a move that will remove restrictions on land acquisitions by foreigners. However, in the runup to this date, enterprising investors from abroad have already purchased 10 per cent of the agricultural land in the country via locally registered companies.

According to official figures, 10m of the 11m hectares of agricultural land in Romania are currently under cultivation. But other more realistic estimates set the current level of land use at just 40 per cent.

Jurnalul Naţional is worried by the prospect of agro-industrial multinationals, which make use of monoculture, buying up land owned by small farmers. It is a concern that is shared by Minister of Agriculture, Daniel Constantin, who recently negotiated a deal to improve credit facilities for Romanian farmers with the country’s banks. From now on, the owners of small holdings will be able to use newly purchased land as collateral for loans, which was not possible in the past.

The European Commission aims to combat “insufficiently transparent” bank charges.

To this end, explains Der Standard, it is planning to introduce a common framework for information on charges, which will apply in all EU countries. Once it has been established, customers will regularly be informed of the costs associated with running their current accounts.

The project, which also includes regulations to make it easier to open a basic account and to switch to another bank, is to be presented on May 8 by the Commissioner for Internal Market and Services, Michel Barnier, and Health and Consumer Policy Commissioner Tonio Borg.

EU authorities, which recently granted France an additional two years to rein in its spending deficit, are nonetheless pressing Paris to push through reforms, writes Le Figaro.

On May 7, a day when French and German finance ministers — Pierre Moscovici and Wolfgang Schäuble — met in Berlin, the European Commission recommended that France should implement “audacious” reforms to improve competitiveness. Adding weight to this request, European Commission President Herman Van Rompuy urged Paris to introduce “far reaching” reform.

However, the conservative daily notes —

Burdened with an outsize public sector and held captive by a ruinous social model, France has taken no steps to implement the far reaching reforms that the Europeans are clamouring to see.

Shortly after 11pm on May 7, the Jolly Nero container ship was leaving Genoa port when it crashed into the control tower, causing the structure to collapse onto another building.

The bodies of four people, including two coastguards and a port pilot, have already been recovered from the wreckage and at least 6 others are still missing. The city mayor Marco Doria has declared a day of mourning.

The cause of the accident is still unknown, but some analysts suggest the 40,000-tonne ship’s engines may have stalled, rendering it uncontrollable.

Meeting in Madrid on May 6, Spanish Prime Minister Mariano Rajoy and his Italian counterpart Enrico Letta agreed to "pressure" the EU to approve a youth unemployment plan at the European Council summit in June.

The two leaders also emphasised the need for new policies to combat populism and anti-European sentiment, which is increasingly prevalent in all EU countries.

La Vanguardia remarks that the "Italian-Spanish front is still alive", and eager to exert pressure on northern countries and German Chancellor Angela Merkel to proceed with the implementation of measures decided at the Rome summit in June 2012. These include the progressive introduction of a banking and budgetary union in the EU.

In an exclusive interview with the business daily, German Finance Minister Wolfgang Schäuble airs his views on the Brussels decision to allow Paris two more years in which to rein in its deficit to 3 per cent.

Pointing out that both “France and Germany have a special duty” with regard to Europe, he notes that the European Commission granted the extension on condition that there would be “a clear demonstration of commitment to necessary reforms.”

Schäuble also commented on the controversy triggered by an internal French Socialist Party document, which described Angela Markel as an “austerity chancellor” —

Instead of tackling the real causes of ongoing problems, some politicians prefer to hunt for scapegoats. It is a tendency that also exists in our country. But at the end of the day, what counts is what governments and peoples actually say. And both governments have clearly expressed the importance they attribute to Franco-German friendship.

“Mr Rajoy and the new Italian prime minister push for a European pact to promote growth,” writes the Catalan daily.

The new Italian PM, Enrico Letta, is today visiting Madrid as part of his European tour, after trips to Berlin, Paris and Brussels, in an effort to forge a strong front against Europe’s policy of austerity.

The visit comes ahead of Spanish PM Mariano Rajoy's Wednesday speech to the national parliament when he will outline the country’s new cost-cutting measures.

The EU is to unveil a plan to compel all member countries to exchange investment income and capital gains details as part of a new push against tax avoidance.

In an interview with the Financial Times EU tax commissioner Algirdas Semeta said a new proposal would be announced within months which will would force member states’ tax authorities to share more information about the financial affairs of citizens, private equity partners and hedge funds.

Last month the UK, France, Germany, Italy and Spain agreed an automatic data sharing deal, but this move would broaden the scope to include countries such as Luxembourg and Ireland, home to many of Europe’s largest investment funds.

Irish President Michael Higgins is under fire following an interview with the Financial Times in which said that the EU was “hegemonic” and faces a “moral crisis” as much as an economic one. He also urged the European Central Bank to reform or risk social upheaval and a loss of popular legitimacy. He has attracted the ire of critics who say he has overstepped the constitutional limits of his office. But this should not lead Irish Taoiseach Enda Kenny to reach “for his censor’s pencil”, writes the Irish Times:

In articulating the case for a social Europe and a rejection of orthodox neo-liberalism, perhaps the President, in his inimitable way, is straying beyond the ideological horizon of the government. [...] Mr Higgins, in pushing boundaries and urging that we develop a new vision of the EU and our place in it, is playing an essential role in stimulating, without deciding, a debate that is necessary and overdue.

The constitutionality of Higgins’ comments should be left to Ireland to debate, notes the Financial Times editorial. But “the issues he addressed are precisely those we should want elected politicians to grapple with publicly.” The economic daily continues –

Mr Higgins may think that the moral arguments stack up against austerity. But it also matters morally if borrowing today burdens future generations; and if public borrowing is spent on privileged insiders’ interests. He is, however, right that the debate must be had.

“The ECB cut its key interest rate from 0.75 per cent to five per cent,” on May 2, which as Die Presse points out, will bring interest rates “to a record low”. The newspaper adds that European Central Bank President Mario Draghi “has not ruled out further rate cuts” in the future.

The Viennese daily notes that the measure will be of benefit to Eurozone banks, which, “for at least a year, will be able to borrow as much as they want from the ECB under very favourable terms.”

But savers will be the losers, argues the newspaper —

The historic low in interest rates will have catastrophic consequences. Taking into account inflation and taxes […] savers are making a loss. Negative real interest rates caused Austrian savers to lose €10bn between 2010 and 2012.

European Central Bank (ECB) President Mario Draghi, announced on May 2 that the ECB’s key interest rate is to be cut from 0.75 per cent to the historic low of 0.5 per cent. However, this measure "will not be enough to generate growth in Spain," argues El Periódico.

The daily believes that the lower rate is a "necessary stimulus" but complains that it will not “facilitate access to credit for small and medium enterprises," which is vitally important for economic recovery.

The ECB also announced that it would continue to provide unlimited finance for banks until July 2014.

The retirement age will no longer be set at 65 and in future will depend on the sustainability of the social security system under new plans to be discussed on May 2 at a meeting of Portuguese government ministers.

Pedro Passos Coelho’s government has pledged to the EU-IMF-ECB troika that it will cut €4.7bn from public spending between 2014 and 2016. It is expected to adopt a set of sweeping measures to reduce the deficit to 5.5 per cent of GDP this year, 4 per cent in 2014 and 2.5 per cent the following year.

The state is preparing to cut 20,000 civil service jobs over the next three years. Part of the overall public spending cuts in 2014 will include a €1.3bn cut from social security benefits, including pensions.

At meeting in Bratislava on May 2, the governing council of the European Central Bank is expected to cut the ECB’s key interest rate, from 0.75 per cent to 0.5 per cent or less.

The decision, which has already been welcomed by the markets, "is more of a political compromise than a life-saving initiative for the European economy," argues La Tribune. "It speaks volumes about the difficult situation of the ECB, which has to contend with the conflicting imperatives of the economic situation and German demands."

On April 25, Chancellor Angela Merkel declared that “higher interest rates might be needed in Germany, but other countries needed lower ones."

Youth unemployment is still rising in Belgium, according to the latest Eurostat figures, which show that 22.4 per cent of people under 25 do not have a job.

What is “eye-catching”, notes De Morgen, is that “the biggest rise is for the group with secondary and higher education level qualifications. Higher education is no longer a guarantee of a job.”

In Flanders, the average increase in the rate of unemployment is now 8 per cent, but among people holding university degrees, it is 12.8 per cent.

On April 30, the Cypriot parliament is expected to approve by a narrow majority the memorandum signed with the EU-ECB-IMF troika of international creditors and the corresponding agreement for €10bn which will “pave the way for the transfer of [financial] aid” in the coming days.

Only the Democratic Rally led by Nicos Anastasiades, the Democratic Party and the European Party, which control 29 to 30 of the 56 seats in parliament, are expected to vote in favour of the text.

Now that the Communist Party-supported possibility of an exit from the eurozone has been set aside, the troika agreement “is the only remaining option for Cyprus,” notes the daily.

Spanish Prime Minister Mariano Rajoy "will not change anything: neither the government or its economic strategy," remarks El Mundo, in the wake of meetings Granada and in Ireland, which currently holds the rotating EU presidency.

The announcement has come only a few days after the publication of Spain's latest unemployment figures, which now shows more than 6 million people are without work (the equivalent of 27.19 per cent of the workforce), and against a backdrop of economic austerity demanded by EU authorities.

However, “'patience' should be based on expectations,” complains the daily, adding that no expectations are possible "in the absence of any effort to implement indispensable structural reforms, and in an ongoing situation that is leading to disaster."

German Chancellor Angela Merkel reopened the divisive issue of bank interest rate policy by saying that Germany would ideally need higher rates than would suit southern Europe, reports the Financial Times.

“The German chancellor’s highly unusual intervention on Thursday, a week before many economists expect the independent European Central Bank [ECB] to cut its main interest rate, highlights how the economies of the prosperous north and austerity-hit south remain far apart,” writes the economic daily.

Her comments came as new jobless figures showing Spain has more than 6 million people out of work, while France has a new high of 3.2 million, underlining the challenge facing the ECB in setting an interest rate to suit the different economic situations of countries in the EU.