Open Europe press summary: 20 January 2009

Europe

Commission issues grim outlook for EU economies;
Spain's credit rating downgraded over public finances
European Union finance ministers are to meet today amid grim outlooks for European economies from the Commission. The Times reports that Britain's economy is set to contract sharper than any other large European economy, with a 2.8% contraction predicted for 2008, while the eurozone is forecast to shrink 1.8% in 2008.

The FT quotes Czech PM Mirek Topolanek warning that "the discussions will be very stormy" because countries are split over whether to allow a breach of rules on deficit spending.

Rating agency Standard and Poor's yesterday downgraded Spain's credit rating from AAA to AA because of its deteriorating public finances, according to the Irish Times. The agency's lead analyst is quoted by the Telegraph saying Madrid's hands are tied and "It doesn't have control over monetary policy and lacks the flexibility to correct its current account by devaluation".

According to the Irish Times, EU Economic and Monetary Affairs Commissioner Joaquin Almnuia has sought to play down fears of a eurozone member defaulting on their sovereign debt, saying "Risk of default . . . always exists in the private and public sectors, but in the case of euro area members, I don't think the risks are high or are significant". Almunia also sought to allay fears over growing yield spreads, and is quoted by AFP saying, "It is normal that the market assess the risks. So the existence of a spread in euro area government bonds is logical because not all members of the euro area have the same fiscal position over the medium- to long-term".

The WSJ reports that government-debt agencies from the eurozone will discuss the possibility of forming a single debt agency in a meeting next Wednesday.
WSJ EUobserver Irish Times FT Telegraph: Evans-Pritchard Telegraph Times Mail Guardian Irish Independent IHT FT European Voice AFP Eurointelligence FTD Independent WSJ Irish Times: Smyth Irish Times European Voice: Daianu

Turkey threatens to withhold support from Nabucco gas pipeline if accession talks aren't sped upAccording to the IHT, European Commission President José Manuel Barroso has said that the EU has to speed up membership talks with Turkey because it badly needs the nation as a reliable energy partner. The FT reports that Turkish PM Recep Erdogan, on a visit to Brussels, has signalled Turkey might withhold support from the Nabucco gas pipeline, a project viewed as central to Europe's drive for energy security, unless the EU unblocked the energy section of Turkey's EU membership talks. However he later softened his stance, saying "the Nabucco project is very important. We are aware of our responsibilities."

The paper also notes that question marks hang over Nabucco, because construction of the pipeline, due to be completed by 2014, has not begun and the cost is estimated at 8bn euros, up from 5bn euros when it was first proposed. It reportedly also remains doubtful whether the countries identified by the EU as potential suppliers have enough gas to provide Europe with the planned 31bn cubic metres a year.
IHT FT BBC European Voice EurActiv EUobserver

Commission proposes fish quotas for recreational anglers
The Express reports that the European Union wants to impose fish quotas on all fishermen to limit the number of fish they can catch - including those who do it for sport or a hobby. The article notes that around 1.4 million people enjoy sea fishing off Britain and critics fear the proposals could have a serious impact on tourist earnings.

Joe Borg, European Commissioner for Maritime Affairs and Fisheries said, "Enforcement of catch limits should be the cornerstone of the fisheries policy. The future of sustainable fisheries requires us to replace a system which is inefficient with one that produces results." But the Scotsman quotes Struan Stevenson, Conservative Fisheries Spokesman in the European Parliament saying, "If the EU is serious about acting to protect fish stocks, it should launch an overhaul of the Common Fisheries Policy, not target a hobby."
Express Scotsman

Retailers warn against EU protectionism
The FT reports that some of Europe's largest retailers yesterday warned against a resurgence in protectionist behaviour throughout the EU during the economic downturn. The paper notes that chief executives including Sir Terry Leahy of Tesco of the UK and Anders Dahlvig of Ikea of Sweden were in Brussels in an effort to see off the perceived reappearance of new trade restrictions called for by struggling producers inside the EU.

Most of the concern focused on 'anti-dumping' measures, where EU producers can demand temporary tariffs against trade partners - often China - accused of selling goods below cost. "All that anti-dumping does is to push up prices for customers," said Ian Cheshire of Kingfisher, which owns the B&Q and Castorama brands. "It's not a terribly bright thing, and it certainly isn't in the best interest of the EU."

The industry's concerns correspond with data from the World Trade Organisation in October that pointed to a sharp rise in the number of anti-dumping investigations, many of them relating to EU trade. The paper notes that the increase came as a surprise following years of decline, despite continuing growth in trade figures.
FT

German Constitutional Court sets date for deliberation on Lisbon Treaty
On 10 and 11 February 2009 the German Constitutional Court will deliberate on constitutional complaints launched against the Lisbon Treaty by CSU MP Peter Gauwelier and the Left Party, who argue that the new Treaty would contravene the principle of democracy and the sovereignty of Germany. Focus notes that the fact that the Constitutional Court in Karlsruhe has planned two days for the hearing is "exceptional". The magazine further notes that it is unlikely to cancel the Lisbon Treaty, but might however force the German government "to obtain from other EU countries declarations setting conditions on certain arrangements".
Focus FAZ Suddeutsche

Poll shows European voters' resistance to more troops for Afghan war
Any attempt by Barack Obama, who will be inaugurated as US President today, to get European Union members of Nato to send more troops to Afghanistan will be strongly rebuffed by EU voters, according to a new opinion poll for the FT. The FT/Harris poll showed that 60 percent of German respondents said they would not wish Berlin to send more troops to Afghanistan under any circumstances. In both France and Italy, 53 percent of people said their countries should not send troops. Only in Spain is there a majority willing to consider sending additional troop numbers, with 57 percent of UK respondents rejecting calls for any more British troops to be sent.
FT

According to Welt, German Justice Minister Brigitte Zypries criticised the European Arrest Warrant in an EU Justice Ministers meeting last Friday, saying "In some countries the warrant is implemented even for minor offences".
Welt

Ukraine and Russia sign gas deal
The WSJ reports that Russia and Ukraine signed an agreement yesterday that they said will restore gas shipments to Europe and make cut-offs to their customers a problem of the past. The BBC notes that Ukrainian gas officials confirmed that they were now receiving gas. Once pressure in Ukrainian pipes is high enough, "we will be able to resume transit" to Europe, a spokeswoman for pipeline operator Ukrtransgaz told the AFP news agency.

EUobserver notes that recriminations over the crisis are starting inside the EU. Polish President Lech Kaczynski yesterday said Europe should have helped Kiev in what many post-communist EU members see as Russia's attempt to aggravate instability inside Ukraine. "[The crisis] proved once more that a country that gets drawn into a dispute with Russia cannot count on any effective help," Mr Kaczynski said.
WSJ WSJ: Karatnycky EUobserver IHT Telegraph BBC

EU immigration and asylum package is "Orwellian"
A comment in Berliner Zeitung by Daniel Haufler looks at the EU's immigration and asylum package, saying that it is "Orwellian" and that "the EU doesn't seem to be interested in the causes of migration", arguing it should reform its agricultural and fishery policies which contribute to migration. It also says that "the EU won't solve the problem with more Frontex boats and higher fences. The EU should guarantee a fair procedure for immigration rather than promoting 'temporary' immigration".
Berliner Zeitung

France is to consult the European Commission over its plans for further aid to its car manufacturing industry.
Times BBC

The European Commission has approved the French and Portuguese governments' plans to give companies a grant of 500,000 euros to cope with the financial crisis.
European Voice

UK

Clarke agrees that Conservatives have a "settled view" on European matters
There is continuing coverage of the Conservative Shadow Cabinet reshuffle, with the Times heralding the return of the "Big Beast" Ken Clarke. PA quotes Mr Clarke saying that he accepted that the Conservatives had "come to a settled view on European matters".

In an open letter to Ken Clarke on Conservative Home, Policy Exchange Director Neil O'Brien calls for action at a "critical moment" on energy, business regulation, regional development and infrastructure. He highlights EU directives such as the Large Combustion Plant Directive, which could shut old power stations early and trigger blackouts in Britain, and the Working Time Directive, which has undermined the labour market, as posing real problems to the economy.
Times Times: Sylvestor Independent Independent: Brown Mail Guardian Guardian: Leader Sun Sun: Leader Mirror Express Telegraph BBC: Mardell blog Telegraph: Hannan blog Conservative Home: O'Brien Mail: Brogan blog

Credit crunch and low oil price undermine UK's ability to meet EU's renewable energy targets
The Times reports that fresh doubts have emerged over Britain's plans for a huge expansion of offshore wind power after Abu Dhabi said yesterday that it was reconsidering the viability of a £3 billion scheme to build the world's largest offshore wind park in the Thames Estuary. The project is the latest in a string of renewable energy schemes to hit trouble in recent months as the credit crunch and the collapsing oil price have undermined the economic case for many of them. The paper notes that the development would contribute a significant part of the Government's EU commitment to generate 20 percent of the UK's energy from renewable sources by 2020.
Times