Open Europe press summary: 4 November 2008

Europe

Lisbon to be integrated with Croatia's accession treaty if not ratified by 2009;
Czech PM: Unlikely Lisbon will be passed before we take over EU Presidency
On his De Standaard blog, EU correspondent Bernard Bulcke writes that a "very reliable source" has confirmed that "if the Lisbon Treaty hasn't been ratified by the end of 2009, the Treaty will be integrated into the accession treaty for Croatia". He adds that "the probability of this scenario increases as the chances of Lisbon just being ratified through a second Irish referendum diminish". This means that "the Irish would have to block the accession of Croatia in order to remain able to block Lisbon."

He goes on to say that it is a "happy coincidence" that "the countries that aren't that excited about the new Treaty are exactly the greatest proponents of further enlargement of the European Union", citing Poland and the Czech Republic, neither of which has ratified Lisbon.

He reports that by 2009 all negotiations with Croatia should be concluded, but that this doesn't automatically guarantee Croatian entry. French President Sarkozy and German Chancellor Merkel have already indicated that the approval of Lisbon will be made a condition for enlarging the EU, effectively blocking the accession of Croatia until this happens. Bulcke dismisses Sarkozy's claim that it would be impossible to enlarge without Lisbon as "legal nonsense", given that accession treaties always adapt the EU institutions to take account of new members. However, he also points out that the claim serves as a "political threat" directed at Ireland, Poland and the Czech Republic.

The WSJ also looks at Croatian accession, expected to take place in 2011, noting that "It's true that, among other things, the Lisbon Treaty addressed such obstacles to enlargement as seating arrangements in the Commission and the European Parliament. But there's no good reason why such institutional issues can't be solved separately, Lisbon or no Lisbon."

Meanwhile, according to the Irish Times, Czech PM Mirek Topolanek has said that it is unlikely that the country will have decided whether to accept the Lisbon Treaty when it takes over the EU Presidency in January. It is noted that the passage of the Treaty is likely to be complicated by the efforts of members of the ruling Civic Democrats (ODS) to link its passage to that of a controversial deal to build a US missile defence radar system near Prague. "The delay complicates our life under the EU presidency because, although no one in the ODS will admit it, the Lisbon Treaty will not pass in the lower house without the radar," Topolanek said. Also Deputy PM Alexander Vondra has said Prague could not guarantee that the Treaty would be approved by the end of the year.

Agence Europe reports that Nicolas Sarkozy and Topolanek have agreed on a number of practical arrangements to ensure that "the baton is passed between the French and Czech Presidencies of the EU properly". It was decided that if the Eurogroup meets at heads of state and government level during the first half of 2009, the Czech Presidency will be invited to take part in the meeting.
Open Europe blog WSJ Irish Times NY Times De Standaard

NATO military committee Deputy Chairman criticises EU for "overwhelming preference for soft power"
Deputy Chairman of the NATO military committee, Lt. Gen. Karl Eikenberrry, has challenged France to explain its view on the transatlantic link in the enhanced EU security and defence policy. French Interior Minister Michelle Alliot-Marie said "there are countries who don't have confidence in this [transatlantic] dialogue and believe a strong European security and defence policy is aimed at minimizing NATO, but I believe the opposite."

Eikenberry was highly critical over the EU's ability to plan, deploy and conduct successful military missions, stressing that out of the bloc's 20 missions so far, five were short-term operations in Congo. "I'm not questioning the value of those missions, they were successful in the relief of pressing humanitarian problems, but what is the overarching strategic thinking in the EU with regard to the Congo?" He also criticised the EU's "overwhelming preference for soft power" and lack of deployable troops despite massive spending on defence.

"European security in this century depends on peace and stability abroad. This is a paradigm shift often stated but still not evident in terms of policies and strategic choices. The current European strategy does not articulate clear regional priorities or comprehensive integrated responses to trans-national threats," he said. German conservative MEP Karl von Wogau, Chairman of the European Parliament's sub-committee on security and defence told a parliament hearing yesterday that the failure of the Lisbon Treaty is no impediment for building up a European security and defence policy. He argued that while the Treaty would have allowed more EU power in the field of security and defense, integration in this area could still proceed anyway.
EUobserver

No coordinated response to Congo conflict from EU nations
Following a visit to the region by the British and French governments, the Foreign Secretary David Milliband has suggested that a military intervention on behalf of the EU to resolve the escalating conflict in Congo is a possibility, and is quoted in the Independent as saying "no one's ruling out a military role". Meanwhile European Voice reports that his French counterpart, Bernard Kouchner, who last week also raised the possibility of despatching EU forces, has called for the UN troops already in the region to be able to use force. However, the Belgium daily Trouw notes that there is no universal enthusiasm for intervention, and that only France, Spain and Belgium are willing to provide troops.
European Voice Independent Nieuwsblad Trouw

Libertas ambitious about pan-EU party to halt the Lisbon Treaty
According to the Irish Times, Declan Ganley has confirmed that he has registered his anti-Lisbon campaign group Libertas as a European political party eligible to raise funds, and suggests that candidates will have to stand in at least seven or eight states to make the project worthwhile. Quoted in the Irish Times, Ganley says that by launching Libertas in other EU nations "it will give people across Europe an option that they were not given, to have a proxy European referendum on the Lisbon Treaty". He added that "I am very confident that there is a comfortable and decent majority that shares exactly the same view as was expressed in our own vote".
Irish Times

Britain to suffer longest and deepest recession of the EU's big economies;
European Commission concerned by rise in government bond spreads
The Times reports that the European Commission has predicted that Britain will suffer the longest and deepest recession of the EU's big economies. Officials said that the British economy is expected to contract by 1% next year, with unemployment reaching 7.1%. The Telegraph notes that only Estonia and Latvia are expected to suffer deeper recessions in 2009, with France and Germany avoiding recession altogether.

Joaquin Almunia, European Economic and Monetary Affairs Commissioner said: "The horizon that this forecast offers is dark." However, Mark Mardell notes on his BBC blog that "Mr Almunia sees, from his point of view, one silver lining: he said that countries like Poland and Denmark had 'seen the risks of not being members of the euro' and that he thought there would be 'renewed political will' to join."

FT Deutschland focuses on comments made by Almunia that the Commission is concerned about the rise in bond yield spreads on government debts. Almunia said that problems for EMU will grow unless the problem is brought under control. In recent weeks, the government debt of Greece, Portugal, Italy and Spain has been down-graded by the markets, making the financing of debt more expensive for these governments.

A FAZ leader accuses the Commissioner of transgressing his responsibilities by encouraging Berlin to raise budget deficits. It warns that other countries may imitate the decision and that Germany would end up as the paymaster general for the entire EU.
Times FT EUobserver AFP Telegraph European Voice Volkskrant BBC Mardell FAZ

EP President: I hope Americans will find European Parliament elections as interesting as we find the US elections
EU foreign ministers yesterday agreed on a joint message to the next US president, calling for a partnership of equals on key challenges from the Middle East to the global finance crisis. The letter will remain sealed from public view until after the results of the US elections.

Hans-Gert Pöttering, President of the European Parliament, has a comment piece in the Guardian. He writes "It would be wonderful to think that the intense interest with which Europeans are following today's US presidential election might be matched by Americans watching the European parliamentary elections in June 2009".

He adds, "I intend to invite the winner of today's election to come and address the European parliament next year. I would like the new president to visit us in April, on perhaps his first European tour, immediately before the Nato summit."

On his Telegraph blog, Bruno Waterfield describes Pottering's words as suggesting a "dizzying delusion of grandeur".
Guardian Pottering IHT Independent Dejevsky EUobserver AFP DW De Morgen Trouw Telegraph Waterfield Open Europe blog

Commission threatens Ireland over government spending
The European Commission has said that it will recommend that an excessive deficit procedure be opened against Ireland because of its "spiraling budget deficit", reports the Irish Times. The Commission has forecast a deficit of 6.75% for 2009, far exceeding the limit of 3% of GDP. According to the Irish Independent, the Irish government will be asked to reduce borrowing levels and if it fails to do so, "EU authorities will take action against Ireland."
Irish Times Irish Independent

MiFID has led to market fragmentation, say investors
The Financial Services Authority is in talks with UK investment banks and fund managers over problems arising from the introduction of a trading-focused European Union directive introduced a year ago. People close to the talks said the focus has been on reporting trades, a requirement that many U.K. traders said was complicated by the introduction of the Markets in Financial Instruments Directive. According to a person close to the talks, they have focused on "principally how the market has been fragmented and the measures that have been taken to glue it back together again."

Concerns over market fragmentation were raised by the FSA over two years ago.
WSJ Open Europe research (pg 36)

President of European Liberal Democrat and Reform Party: opponents of Lisbon are "stupid"
In an interview with European Report, Annemie Neyts-Uyttebroeck, the President of the ELDR Party, which is represented in the European Parliament by the ALDE group, is asked "If the Lisbon Treaty is not ratified before June, will it have consequences on the result of the elections?". She replies: "We don't need to delude ourselves: for some years, the EU has had fierce opponents, violently opposed to Europe in general for very poor reasons. I think that we should take this opposition head on, rather than having the masochist reaction of saying yes, but the EU isn't perfect, it's doing its best, etc'. No, these are people against the EU, there is a real confrontation that we should dare to come to terms with. Even within the European Parliament, these opponents represent 5% of the total with their silly little flags. Why do we let them do it? They have the right to have stupid opinions in a democracy, but these people should be attacked by telling them that they are stupid."
No link

Juncker rejects Sarkozy's EU 'economic government' plans
At a meeting of Finance Ministers from the eurozone, the head of the Eurogroup Jean-Claude Juncker stated that "most member states do not agree" with Nicolas Sarkozy's proposals for an "economic government", reports EUobserver. However, if the heads of member states did meet, Juncker suggested that, "Unlike the French President, I am both a minister of finance and prime minister. So I have a particular advantage in the sense that I have all the skills to be able to fulfil both positions."

Juncker revealed that there were no detailed discussions of French proposals to commit governments to stricter supervision of financial markets, leaving it to the meeting on Friday between EU heads of state over a single position to take to the G20 meeting. This came following discontent voiced by an EU diplomat that the proposal contained measures which hadn't been discussed within the 27 member state bloc, according to EUobserver.
European Voice EUobserver EUobserver FD FAZ

Commission accepts EU climate package could lead to companies moving away from Europe
A report, seen by European Voice, from the European Commission's Economic Policy Committee's working group, has warned that the EU climate package would reduce energy consumption and, with it, tax revenues.

The paper also points to the increased risk that companies could move their operations abroad to avoid the restrictions imposed by emissions-reduction targets, a process often referred to as 'carbon leakage'.
European Voice