Austrian authorities pushed to extend their internal border control checks to include all of Italy but were shot down by other EU states.  The Council, representing member states, on Thursday (12 May), agreed to extend existing border control checks in Austria, Germany, Denmark, Sweden and Norway for another six months. Member states approved a recommendation by the EU commission to extend existing checks because of "deficiencies" in the protection of EU external borders in Greece.  The recommendation authorised Austria to continue checks at its borders with Hungary and Slovenia.  Two EU officials confirmed Vienna had at an EU ambassadors meeting on Wednesday attempted to expand the scope of its existing controls to also include Italy. "The question came from Austria: 'What about all of our borders, what about our border with Italy? Can we not use controls there?' The commission said ‘No' and the council said ‘No'," said the EU official.  Another EU official said Austria had also attempted it "but didn't get support".  A diplomat in Brussels said the Austrians had wanted to have some flexibility, but the EU commission insisted the extension would only apply to checks already in place.

Austria's interior minister Wolfgang Sobotka in April had threatened to seal the border at the Brenner Pass with Italy over fears refugees would seek to enter from Italy.  Plans are in place to erect a 370 metre chain-link fence with four checkpoints on the Alpine highway that links the two nations.  The plan is to be ready to put into practice a border management like between Austria and Slovenia, if necessary," noted a diplomat.  Italy's prime minister Matteo Renzi has critised any barrier along the pass by the Austrians as "flagrantly against European rules, as well as against history, against logic and against the future".  But the move by Austria point to growing fears in Vienna that a sudden influx of people will cross from Libya into Italy over the summer months. Austria can invoke a different set of rules under the Schengen Borders Code to impose controls with Italy, should it so choose.   "They [Austria] can unilaterally introduce controls for eight months if they are proportionate and justified by the evidence," noted the EU official. EU law allows member states to impose a two-month control in unforeseen circumstances if there is an emergency. It can then impose another six months for foreseen circumstances. The EU commissioner for migration Dimitris Avramopoulos has no desire to see any controls at the Brenner pass.  Last week, he sent a letter to the Austrian authorities outlining EU rules on the matter. I have sent a letter that we do not agree with the introduction of border controls or border checks," Avramopoulos told euro-deputies in Strasbourg on Wednesday.  The existing internal controls in Austria, Germany, Denmark, Sweden and Norway will be maintained despite a dramatic drop in the flow of refugees into Europe when compared to April and May last year. The move to extend the checks was launched following an unannounced visit by experts from the EU border agency Frontex to verify Greek border controls last November.

They said Greece had "serious deficiencies" on how it manages its borders, posing a larger existential threat over the entire passport-free Schengen area. The threat gave the EU the legal basis to prolong the checks. Greece, for its part, denies that it cannot manage its own borders and notes it has met some 43 out of 50 recommendations from the EU commission to plug the gaps.

 FT notes that even though China's debt generates fears, more worrisome is the speed it has been accrued at. If it has now reached 237% of the GDP, at the end of 2007, China's debt was 148% of the GDP. "Every major country that has rapid increases in debt has faced either a financial crisis, or an extended slowdown of the growth of the GDP", says Ha Jiming, chief investment strategist at "Goldman Sachs".  The IMF has recently warned that the Asian country is posing an increasingly higher risk to the developed economies, due to the size of its debt and the ties it has with the global financial marketing.  According to specialists, it is difficult for any economy to productively use such a volume of capital over the short term, due to the limited number of profitable projects.   As the investments' returns decrease, even more loans are at risk of becoming non-performing, according to FT.   Economists feel that China's health is at risk, but their opinions on the country's future vary. One of the extreme scenarios is an acute crisis - a "Lehman" moment which will resemble the one in the US in 2008, when that bank collapsed, and other lenders crashed, paralyzing the market. Other economists estimate a chronic slump in China, as has been happening in Japan, where economic growth has been stagnant for years.

 According to data from the Bank for International Settlements (BIS), the total debt of emerging markets was 175% of the GDP in the third quarter of 2015. The BIS estimates China's debt at 249% of the GDP, compared to 270% in the Eurozone and 248% - the US' debt.  Foreign investors are set to remove approximately 538 billion dollars from the Chinese economy in 2016, the International Institute for Finance estimated yesterday, according to Reuters.   According to the IIF, the pace of capital outflows from China has slowed down, as this year's amount will be approximately 20% lower than the 764 billion dollars investors took out last year, according to Agerpres. However, the IIF warns that that capital outflows may pick up speed again, if concerns over a disorderly depreciation of the Chinese Yuan were to appear.  "A sudden drop of the Yuan would spark off new sell-offs of risky assets and a flight of capital portfolios to the emerging markets", a recent report of the IIF states, which mentions: "Furthermore, a sudden depreciation of the Yuan could spark off a devaluation of other emerging markets, especially among those with strong commercial ties with China".  Approximately 35 billion dollars have exited China in March, which takes the total since the beginning of the year to approximately 175 billion dollars, far below the outflows that took place in the first half of 2015.

     

Over the last few weeks, several German politicians have criticized the ultralax monetary policy adopted by the ECB, which cut the policy rate to zero in March. The officials in Berlin are saying that this measure affects those Germans who save money. (A.V.)  Mario Draghi said that the ECB is ready "to use all the available instruments" to stimulate the rise of prices in the Eurozone, but expressed his confidence in the effects of the measures passed by the bank so far.  "Our policies work, they are efficient", said Draghi, and he added: "It just takes time for those measures to produce their effects in full".  The president of the ECB also stressed that aggressive measures, the kind of "money thrown from helicopters", has not even been brought up in this week's meeting of the council of governors.  Yesterday, the ECB decided not to change the interest rate, after it cut it to a historic low in its March meeting, in an attempt to boost inflation.  The ECB kept the policy rate at zero, while the interest on the marginal lending facility was kept at 0.25%, and the interest rate on deposits was kept at - -0.40%. 

The EPP Group has called on the European Commission to strengthen an effective trade defence instrument to guarantee the protection of EU industry from dumped imports from China. The Group's Resolution stresses that as long as China does not meet the five criteria required by the EU to qualify as a market economy, the EU should use non-standard methodology in anti-dumping and anti-subsidy investigations on Chinese imports in the determination of price comparability.  At the same time, during today's plenary debate on China's market economy status, the EPP Group Spokesman in the International Trade Committee, Daniel Caspary MEP, called on the European Council to stop the blockade on the Trade Defence Instruments legislation: "The strategic partnership with China is extremely important to us, regardless of whether China is considered to have a market economy or not, because it obviously doesn't. At the same time, there are hundreds of thousands of European people working in the steel industry who are very worried about their jobs. We must act urgently for them to make sure that EU trade instruments are boosted. Jobs are important for the EPP Group; the European industry is important and we want to protect it", said Caspary.

"I am surprised that the European Commission has not yet presented a solution as to how the EU should comply with WTO rules already agreed on 15 years ago. This is not five minutes to twelve, it is five minutes past and we are still waiting. The big question is if there is any chance of passing new laws before it is too late", stressed the EPP Group's Deputy Spokesman in the International Trade Committee, Christofer Fjellner MEP, responsible for the Trade Defence Instruments legislation.

The European Parliament Standing Rapporteur on China, Iuliu Winkler MEP, stressed that the EU strategic partnership with China must be based on reciprocity and mutual benefits: "Any decision on the market economy status of China in anti-dumping investigations should be in full compliance with WTO norms. Automatic recognition of the market economy status of China is not a valid option, so we ask the European Commission to identify viable trade defence instruments that can be applied to protect the steel industry and other industries against unfair competition and dumping. We believe that dialogue with China and other partners in the WTO will lead to identifying the best solutions to be applied to strategic partners in the mutual interest of the EU and China."

Regulators from some of Europe's biggest markets will take centre stage at this year's EUROMAT Gaming Summit which will take place at the Majestic Hotel in the heart of Barcelona.  The latest programme for the Summit shows that Marta Espasa, the Director General for Gaming in Catalonia will open the programme along with the European Commission's top official Harrie Temmink. Mr. Temmink will then join several other European regulators for a panel discussion including:

     - Peter Naessens from the Belgian Gaming Commission;

     - Elisabetta Poso from the Administration of State Monopolies, Italy;

     - Carlos Hernandez Rivera, Director General of Gaming, Spain;

     - Fernando Prats, Madrid Regional Government, Spain.

Eduardo Antoja, President of EUROMAT and Chairman of the panel discussion with regulators said: "Regulation makes or breaks our industry so having so many top gaming officials from European markets together for one session is a real added value of this year's summit. Operators and manufacturers from across the industry should be there if they want to get a valuable insight into the thinking of the people making decisions that have a direct impact on the industry". Other panel sessions at this year's summit include:

     -What does convergence mean for the land-based gaming industry in Europe?

     - Player tracking: Does it help to improve responsibility?

     - Are manufacturers or operators driving the gaming machine market in Europe?

     Delegate numbers are set to soar with industry leaders and regulators sharing their thinking on how the European market is evolving.

  Reuters writes that the British financial authority has placed the London division of DB "under enhanced watch" since back at the end of 2014, amid "concerns over corporate governance and internal audit". Following these revelations, Institutional Shareholder Services (ISS), an international shareholder consulting firm, has advised DB shareholders to vote in favor of the beginning of an independent audit process, because "there are significant doubts concerning the ability of the supervisory board to investigate the potential illegal actions of its members, which reflects a conflict of interests". The next general shareholder meeting of the shareholders of Deutsche Bank will take place in Frankfurt on May 19th, 2016, according to the notice to attend located on the website of the bank.  The recommendation of the ISS also comes as a result of the recent resignation of an important member of the Supervisory Board of the bank. A press release posted on the DB website states that Georg Thoma, member of the Supervisory Board and president of the Integrity Committee, has presented his resignation two years before his term was set to expire.  In the same press release, Paul Achleitner, the president of the Supervisory Board, stressed Thoma's achievements and thanked him "for everything he did for the bank". Unfortunately for the biggest German financial institution, Georg Thoma actually did too much, and the result was an open conflict with both the executives, as well as with the Supervisory Board.  Bloomberg writes that "Thoma went too far with investigating the potential illegal activities of the bank" and has been "isolated" as a result of "examining the ties between the members of the executive management and the lawsuits that the bank has been involved in over the last two years".  One of Thoma"s "targets" was actually Paul Achleitner, and the conflict blew up in the press last week, when Alfred Herling, the vice-president of the Supervisory Board, criticized Georg Thoma for "being too zealous and spending too much time investigating potential illegalities", according to Bloomberg. The conflict between the two is marked by a bitter irony, as it was precisely Achleitner that recommended Thoma for the position on the Integrity Committee, based on their friendship, "cemented" by their cooperation on the privatization of the East-German chemical industry, according to the Bloomberg article.