Open Europe press summary: 28 November 2008

Europe

Poland on EU climate package: "We won't do it, this is not a viable political scenario";
France to propose new 'CAP-style' system of industrial subsidy
According to Deutsche Welle, Polish Minister for Europe Mikolaj Dowgielewicz said yesterday in regard to the EU energy and climate package, "We are as far from an agreement as we were in October ... It is really difficult to understand why a number of the most affluent member states ... are not really moving an inch. A lot of countries which are very strict in negotiations are not prepared to work towards the agreement. I will not accept a situation where somebody would put the blame on Poland, Bulgaria and Romania for the failure of negotiations," he said.

"Do you think we'll turn off the lights and switch to gas? We won't do it, this is not a viable political scenario," added Dowgielewicz. According to Agence Europe, Dowgielewicz indicated that other countries shared Poland's concerns, but would not express their views openly, saying that "Certain countries will hide behind us".

According to Euractiv, the French EU Presidency is now "putting everything on the table" in a "desperate" bid to agree on the climate and energy package before the end of the year, sources close to the negotiations have said. France is putting forward a compromise that includes free emission rights for coal plants, financial compensation for energy-intensive industries and extensive use of third country emissions reductions to meet CO2 'effort sharing' targets. Ireland, the UK and France would be excluded from the free emission rights part of the scheme due to their relatively low use of coal for power generation. In regard to the mechanism to compensate energy intensive industries, the article reports that "There is also some speculation that Paris has modelled the mechanism on the subsidy scheme that underpins the EU's Common Agricultural Policy (CAP), of which France is a main beneficiary."

EU heads of state and government are set to debate the climate proposals at their annual year-end summit on December 11-12, with the French government lobbying intensively for a deal.

Open Europe's Research Director Hugo Robinson was quoted in the Eastern Daily Press arguing that "against a backdrop of a shrinking economy and rising unemployment, the EU plan is an inefficient approach."
Eastern Daily Press NY Times blog DW Euractiv

Heavy industry will be "taxed out of existence" by EU climate package
Open Europe hosted an event last night entitled "EU climate change package: Are we about to be locked into the wrong policy?" Andrew Bainbridge, Director-General of the Major Energy Users' Council, argued that "It is not feasible to diversify away from fossil fuel dependence to reduce CO2 emissions so quickly in pursuit of arbitrary, politically determined targets of questionable practicality... We need a common sense approach which doesn't tax glass manufacturers or chemical companies or other energy intensive industries out of existence. If renewables are going to whack 30% on our energy bills by 2020, do not expect major energy users to sit back and accept what the government says is inevitable". He concluded "All I can foresee is continued chaos, and then the lights will go out".

Ian Fells of Newcastle University said, "There's no chance at all of getting to 15% renewable energy by 2020." He went on to say, "Where do these targets come from? I was in Brussels about 18 months ago talking to the civil servants there at the Commission, and I said 'Where does this 2020 target come from?' And they laughed. They said, 'those are political targets - those are not the real targets.' A bit depressing that the civil servants at the Commission think that".

Gordon Edge of the British Wind Energy Association argued that the binding target for renewable energy was needed because "if we're going to have it, let's have it now - let's force the pace and make it happen... an early challenging target is a good idea".

Meanwhile, the Times reports that a senior executive of EDF has warned that a lack of capacity in the nuclear construction industry means that Britain will have to increasingly rely on imported natural gas to meet an emerging shortfall in power generation over the next decade
Times For more details, see the Open Europe website: Open Europe events

German government rejects EU economic stimulus plan
Sueddeutsche Zeitung reports that German Finance Minister Peer Steinbrück has rejected the proposed EU economic stimulus plan, saying: "there will be no big bail-out plan". Stressing the need for sound German budgetary policies, he said: "because we have achieved a certain [economic] success we would be forced to be the main contributor". The article notes that Germany would have to pay a quarter of the cost of the EU proposal. Tagesspiegel quotes Martin Wansleben of the German Industry and Chambers of Commerce saying: "Commission President Barroso speaks a lot about the financial means of the member states, instead of showing what he can do himself to support industry".

Meanwhile, the Spanish government yesterday announced an 11 billion euro stimulus package, primarily targeted at infrastructure and the motor industry.
Sueddeutsche AFP Tagesspiegel WSJ FT FT FT IHT BBC

Irish parliamentary report considers second Lisbon referendum the main option
The FT reports that prospects of a second Irish referendum on the Lisbon Treaty rose yesterday after an all-party parliamentary report said there was no legal obstacle to another poll. The Irish Times notes that the report said that a second referendum on the Lisbon Treaty with EU assurances on certain issues is the main option open to Ireland. The paper reports that the Irish government is looking to secure assurances on a range of issues, ahead of a second vote, to meet popular concerns raised by the No camp during the first referendum. These include Ireland's military neutrality, and clarification on issues such as abortion and corporation tax.

The FT notes that Ireland agreed with its EU partners in October that by the time of the December European Council, in two weeks time, it would be in a position to "define the elements of a solution and a common path to be followed". Ireland had been expected to hold a second vote late in 2009 but some experts believe Irish PM Brian Cowen may go for an earlier date, recognising that as the economic crisis will deepen popular dissatisfaction with the government.

The Economist suggests that Cowen's domestic problems of increasing unemployment and public dissatisfaction with his government may "prove terminal for the Lisbon Treaty" if a second referendum is held. It argues "it is hard to see Mr Cowen, who failed to sell Lisbon to voters when he and his government were popular, succeeding next autumn. He will find it difficult to stop a vote turning into a referendum on his government." The article also notes that "some argue that the Irish will say yes only if they believe that a second No would lead to their country's ejection from the EU".

The Irish Times reports that the Irish parliamentary report warns against this "high-stakes strategy" of holding a referendum including a commitment that a No vote would mean leaving the EU.
EUobserver FT Economist Irish Independent Irish Times Irish Times 2 Standaard Irish Independent-Quinn

High Court rules that UK taxes broke EU law
British American Tobacco expects to recover up to £1.2bn in taxes back from the Treasury after the High Court ruled that the system of tax relief for dividends paid to the UK from EU-based companies violated EU law, the FT reports. The Times quotes a partner at KPMG arguing that the judgement "makes absolutely clear that the UK dividend taxation rules breach EU law, opening the door for massive tax rebates." The Mail also reports that the rebate could extend to earnings from as far back as 1973, when Britain joined the Common Market.
FT Economist Mail BBC IHT Times

French call for EU football regulator to combat English dominance;
Clubs could be forced to open their books to EU regulators
French Sports Minister, Bernard Laporte, yesterday called for the European Union to help redress the dominance of English football clubs in European competitions at a conference in Biarritz, reports Bloomberg. Laporte told the conference that foreign investment in the league goes against the spirit of the sport. The French Minister was also backed by European Sports Commissioner, Jan Figel, who said that "Sport does not and cannot exist outside EU law", according to EUobserver. However, the BBC reports that UEFA President Michel Platini has rejected calls for a "super-regulator", saying that UEFA did not want to "interfere" with national leagues in Europe.

The Times reports that the French consider that only a "super regulator" can restore fair competition to the sport and regulate the "light touch" financial rules in the English league, as compared to the rest of Europe. Following objections from UK Sports Minister, Gerry Sutcliffe, a call for "European control of club management" has been removed from the draft conclusions from the conference. However, the paper writes that reference to the principle of a level playing field that could force clubs to open their books to EU regulators and dramatically cut levels of debt remain in the document.
NY Times Bloomberg BBC EUobserver Times AFP

TV Channel France 2 had extensive coverage on Wednesday of Open Europe's briefing "100 examples of EU fraud and waste".
France2

Sorrrell: Europe is like an ageing company
In the Times, Sir Martin Sorrell, Chief Executive of the media company WPP, argues that "structural changes" must be made in Europe if it wishes to keep up with the rest of the world, following the recession. He argues, "Western Europe is like an ageing company with huge healthcare and pension liabilities that are difficult to fund. That is why admitting Turkey to the EU should be a no-brainer. It is the gateway to the Middle East, has a young population, is highly entrepreneurial and would be a huge boost to the EU's 450 million people."
Times-Sorrell

EU states reject telecoms "super-regulator" idea
EU telecoms ministers rejected on Thursday the Commission's proposals for a Union-wide "super-regulator" to replace the current European Regulators Group, EUobserver reports.
EUobserver AFP European Voice

Economist: Europe's surprising labour flexibility
The Economist notes an unexpected fluidity in some of the EU's labour markets, owing to the 2004 accession states. Ireland (along with Sweden and Britain) was able to capitalise on the influx of Eastern European workers by allowing unfettered migration as the economy boomed even as unemployment fell to record lows. With unemployment now surpassing 7% as Ireland enters the beginning of a severe recession, immigrant workers are forecast to return home, the paper reports.
Economist

The Regeneration & Renewal magazine reports that the Commission has confirmed a £12.6 million fine for the UK Government due to 'poor management' of the Structural Funds in Wales.
No link

EUobserver notes that a leaked Polish security briefing has suggested that Georgia may have staged the shooting of a convoy carrying Polish President Lech Kaczynski and Georgian President Mikhail Saakashvili to the border of the Akhalgori district last weekend.
EUobserver

EU member states will admit 10,000 Iraqi refugees that are currently in camps in Syria and Jordan, according to a Belgian news website.
HLN