Open Europe press summary: 16 October 2008

Europe

EU to press on with controversial climate package despite acrimony over costs
AP reports that EU leaders have agreed to press ahead with the controversial Climate Action and Renewable Energy Package, which sets a 20% target for overall emissions reduction by 2020, and - crucially - includes binding targets for 20% of energy to be sourced from renewables and for 10% of transport fuels to come from biofuels. However, the agreement was marred by deep divisions over the plan, with scepticism rising amongst some member states over the viability of the proposals in the context of looming recession in Europe.

A draft circulated to leaders ahead of the final session of a two-day summit, obtained by Reuters, states that "The European Council confirms its determination to honour the ambitious commitments it has made on climate and energy policy. In this connection, it reaffirms that its objective is to reach agreement in December, working closely with the European Parliament, on the (European) Commission's four legislative proposals." In order to assuage criticism led by Poland and Italy, it called for intensive work in the next few weeks on "applying that package in a rigorously established cost-effective manner to all sectors of the European economy and all member states, having regard to each member state's specific situation".

Yesterday, Italian Prime Minister Silvio Berlusconi said "Our businesses are in absolutely no position at the moment to absorb the costs of the regulations that have been proposed." President Sarkozy of France said: "[Mr Berlusconi] made some good points, saying they have a problem with off-shoring jobs already. And he's quite right. We can't blame him. He's playing his role." Sarkozy added, "we are not going to do what we normally do, which is hand off the whole thing to the next presidency. We are not going to do that." A source close to the discussions told EUobserver that reluctant member states would give in eventually. "Italy and Poland were very much in the minority and put in their place," the contact said.

On the Guardian's Comment is Free site, Open Europe Research Director Hugo Robinson notes in reference to the plans: "The scale of the package is breathtaking. In Britain, it would mean around 40% of electricity being generated from renewable sources (up from under 5% today), within a decade. Building five new wind turbines every single working day from now until 2020 would get us just over halfway to meeting this target. Throw in the £23bn Severn barrage, and just 65% of the target will have been attained."

He argues that "under the EU plan, the technology-specific targets for renewables and biofuels mean that investment is unlikely to be directed towards the most cost-effective methods of removing CO2 from the atmosphere. These distortions will mean that the per-unit cost of carbon reduction of the EU package as a whole will be unnecessarily high."

Open Europe's report, released this week, found that the package would cost £600 per family of four in Britain, and 73bn euro per year across the EU was covered in Czech daily Pravo.
EUobserver De Morgen De Morgen Le Figaro Le Figaro European Voice Al Jazeera BBC-Mardell Euractiv Coulisses de Bruxelles Le Monde Guardian Guardian Robinson AP Reuters RFI Open Europe report Pravo

Cowen under pressure over Lisbon despite financial crisis;
Spanish MEP: "You're not going to stop us. We'll go ahead with the Lisbon Treaty"
In a speech to his European counterparts at yesterday's summit, Irish PM Brian Cowen reaffirmed that he will present a plan at the next EU summit in December on how his government will press ahead with the Lisbon Treaty.

Although most focus was on the financial crisis, Cowen was still subject to pressure from other EU leaders. The Irish Times quotes French Prime Minister François Fillon saying, "There is no doubt that the crisis shows how important it is for Europe to have a strong and stable presidency. The Treaty creates a stable presidency role and brings us closer to this goal. We need strong institutions that can react to events. It is up to the Irish to make up their minds on what role Europe can play in the economic crisis and draw the consequences from that."

In a separate article, Irish Times Brussels Correspondent Lara Marlowe notes that "Europe's obsession with the financial crisis gives the misleading impression that nobody cares anymore about Lisbon... But the reprieve is temporary". She quotes Spanish centre-right MEP Íñigo Méndez de Vigo as saying, "You're not going to stop us. We'll go ahead [with Lisbon]. There are ways to do it. This is the history of the EU. If compromise is not possible, the others will go ahead. To me it is shocking that a government that held a referendum and failed is still in office. A government that puts a question to a referendum and loses has to resign: that's democracy."

Meanwhile, Euractiv quotes EU Enlargement Commissioner Olli Rehn dismissing claims that the Irish No to the Lisbon Treaty will halt further enlargement. He said, "The EU's internal institutional reform process and its enlargement policy are two parallel tracks. While the EU considers how to pursue its institutional reform, we will keep on working in parallel on a carefully-managed and gradual accession process in South East Europe. We don't take any sabbaticals from our work for peace and stability."
Irish Times Irish Times: Editorial Irish Times: Comment Irish Independent EUobserver Euractiv Euractiv

European leaders unite behind calls for a "Bretton Woods II";
Brown and Sarkozy squabble over EU leadership of financial rescue
The FT reports that EU leaders yesterday united behind calls for a "Bretton Woods II" summit to redesign the world's financial architecture. Britain has argued that the meeting could also be used to seal a long-sought global trade deal. Nicolas Sarkozy and Angela Merkel have already signalled their support for reforms to the international financial system.

However, the Telegraph reports that Brown "risks a spat" with Sarkozy over the planned meeting. Sarkozy proposed such a meeting last week and diplomats in Brussels said that Brown had technically breached EU protocol by appearing to assume a leadership role for himself. The Open Europe blog also quotes PA as saying that, "Officials have privately noted that Nicholas Sarkozy has been unhappy with the degree of praise being lavished on Mr Brown."

The Independent reports that Sarkozy told the EU Summit yesterday, "For the first time in financial history, it is plans worked out in the EU which have inspired the measures taken in other countries of the world, including the US. Europe has shown leadership in dealing with the crisis and I welcome this". Andrew Grice writes in the Independent, "Sarkozy is said to be 'furious' that the media has portrayed the EU proposals as a British blueprint".

The Independent reports that the Summit has produced proposed changes in EU accounting rules with the Commission and member states backing reform of "mark-to-market" rules, intending banks to get stability in the valuations of their assets. There are also new proposals to increase the guarantee of banking deposits from 50,000 to 100,000 euros, an agreement which the eurozone failed to reach last week.
FT FT 2 Times Independent Independent-Grice Independent 2 Independent-leader Telegraph Telegraph 2 Telegraph 3 Telegraph 4 IHT IHT 2 AFP BBC Metro Le Figaro Irish Times European Voice European Voice 2 EUobserver EUobserver 2 Guardian Telegraaf Reuters Le Monde De Tijd OE Blog

Italian Treasury Minister: abolish all hedge funds
The FT Lex column reports that Giulio Tremonti wants to abolish hedge funds. The Italian Treasury minister has declared that hedge funds are "absolutely crazy bodies which have nothing to do with capitalism" and has warned that when Italy takes over the presidency of the G8 from Japan in January, it will put the utter destruction of this "hellish $2,000bn industry" on the agenda.
FT Lex

New EU 'financial crisis cell' to 'tighten the screw'
A new "crisis management unit" will be set up as part of the plans to 'tighten the screw' on the financial sector, EUobserver reports. The plans, that were passed unanimously at the EU summit yesterday, are "designed to exchange information, give advice and co-ordinate action between member states", says EUobserver. The draft outline of the group shows that it will be initially composed of the President of the European Central Bank Jean-Claude Trichet, President of the eurozone Jean-Claude Juncker, Commission President José Manuel Barroso and French President Nicolas Sarkozy, the Irish Times reports.
Irish Times EUobserver

Brogan: Brown "had to beg" to join Euro group
After receiving praise as the saviour of Europe, Gordon Brown insisted yesterday that, "we have no plans to join [the Euro] at this stage", according to the Guardian. But Benedict Brogan's blog in the Mail quotes Luxembourg Finance Minister, Jean-Claude Juncker, as suggesting that "The British Prime Minister had to beg to be let into the room in which the Euro group was meeting", and that he thought after the financial crisis was over, "the British will think about whether they shouldn't become an equal in all decision-making bodies.''
Mail: Brogan Blog Guardian Traynor OE blog

Cronin: Mandelson bullied Caribbean nations into accepting harmful trade deals
David Cronin, Brussels Correspondent of Inter Press Service argues on the Guardian Comment is Free site that former EU Trade Commissioner Peter Mandelson bullied Caribbean nations into accepting controversial trade opening pacts, Economic Partnership Agreements (EPAs), one of which was signed yesterday. Cronin argues that EPAs "were not the product of a frank dialogue on how the Caribbean could put commerce at the service of its people. Rather, they were drawn up by Brussels officials and presented in a take-it-or-leave-it manner. Enormous pressure was put on representatives of Caribbean nations to cross what they considered red lines... because of Mandelson's bullying, his region eventually had to capitulate."
Guardian Cronin AFP Nieuwsbank

The Swedish Riksdag is expected to approve the Lisbon Treaty on November 20.
Europaportalen

Ukraine, Hungary and Serbia seek emergency loans from IMF
A team of IMF trouble-shooters rushed to Kiev on Wednesay to draw up a possible standby loan to help Ukraine stabilise its bank after a panic run on deposits this month. Foreign investment has largely dried up, leaving it unclear whether banks with large debts in dollars and euros will be able to roll over short-term loans. The government has already seized Prominvestbank, suspending payments to creditors.
Telegraph-Evans-Pritchard

Partnership treaty talks with Russia have been delayed until November after a "divided" EU summit in Brussels.
EUobserver

Bulgarian corruption made worse by EU funds
Mafia presence in Bulgaria is troubling the EU, and in an attempt to improve the situation, the EU "dangled" 11bn euros in aid, which only served to spread corruption as many of the most corrupt characters "moved from buying off politicians directly into politics."
IHT

UK

Mandelson to lose anti-corruption role
Peter Mandelson will not be taking on the anti-corruption role as Business Secretary, despite it being a 'natural' part of the BERR portfolio under his predecessor, the Telegraph reports. The anti-corruption brief, once the responsibility of previous Business Secretary John Hutton, has been transferred to Justice Secretary Jack Straw, in what is reported as a personal decision by the Prime Minster. Nick Herbert, the Conservative shadow of Jack Straw, said that the move was "inexplicable", going on to point out that "Surely the former European Commissioner is qualified for the job?"
Telegraph

Labour MPs join opposition parties in attack on information database
Labour MPs have joined with opposition parties in expressing concern about the Government's plans to monitor the telephone calls and internet habits of ordinary people, the Telegraph reports. The plans, outlined by Home Secretary Jacqui Smith, would allow the creation of a vast database that would store information of online communications that are currently difficult to monitor effectively, namely Skype calls. Civil liberties groups have also condemned the plans according to the Telegraph, and have been described as "Orwellian" by some opponents of the proposals.
Independent Mirror