Europe
Polluters are cashing in on the EU's Emissions Trading Scheme;
Price of carbon falls by 60%
The Guardian has a feature on the EU's Emissions Trading Scheme (ETS). The article notes that instead of trading 'permits to pollute' as a way of reducing the overall level of pollution - the original idea behind the scheme - companies are now selling off the permits in order to bring in funds at a time when their carbon output is expected to fall due to lower production. Up to 1 billion euros worth of carbon emissions permits are said to have been sold off in recent months. The sell-off has led to carbon prices plunging by 60%, effectively making it cheaper to burn high-carbon fossil fuels and bringing echoes of 2006 when over-allocation of credits created a glut which made the permits almost worthless.
The article notes that the collapse in the price of carbon has also caused a slowdown in clean energy projects in developing countries against which western firms can gain credits. The price of the so-called Clean Development Mechanism (CDMs) slumped by nearly 30% over the last couple of weeks.
Mark Lewis, a carbon analyst at Deutsche Bank is quoted saying, "This [ETS] was not designed as a scheme to give corporates cheap short-term funding options in the fase of a credit crunch meltdown where banks are not lending, but that appears to be what's happening." Oscar Reyes of the Carbon Trade Watch is quoted saying that "it is no surprise that it [ETS] is now being used as a cash cow to see firms through a difficult financial phase."
In a separate article, Bryony Worthington argues that "even before the recession took hold it was clear that certain sectors of industry had received very generous allowances, but now that issue looks vastly more problematic...[ETS] is now a cash redistribution exercise...and we, the electricity bill payers, are footing the bill."
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Open Europe clashes with Commission at a debate in Brussels
At an Open Europe debate in Brussels yesterday evening, Joe Hennon, Spokesperson for EU Communication Commissioner Margot Wallström, rejected Open Europe's research which shows how the EU spends billions of euros a year promoting itself. However, he argued that EU culture, citizenship and education projects which promote European integration did so because the commitment to an ever-closer union "is in the treaties". Mr Hennon denied that his office had sent an email to Swedish journalists attempting to draw their attention to Open Europe's research and describing the think-tank as being "to the right of the British Conservative Party" in an effort to discredit the research. He also disputed Open Europe's claim to be independent, leading Open Europe Director Lorraine Mullally to clarify that the think-tank receives no funding from political parties or the EU, in sharp contrast with the many organisations listed in Open Europe's research, such as the European Movement, which are heavily subsidised by the EU and yet state very clearly on their websites that they are independent. Mr Hennon also repeatedly described critics of the EU as being "anti-European". Other speakers included the European Movement's Hendrik Kröner, Chris Heaton-Harris MEP and Stern Journalist Hans-Martin Tillack, who was arrested at the instigation of EU authorities after investigating EU fraud, but later cleared. Mr Tillack described how the staff in the Commission's DG Communication were behind the rumours which first lead to his arrest. This morning on Belgian Radio 1, Open Europe's Pieter Cleppe debated the publication with Willy Hélin, Head of the Representation of the European Commission in Belgium, who said the research was "totally mad", saying that "taxpayers only have to pay 3.5 euros per year". Pieter said that "this amounts to a lot of money" and that Open Europe's figure of 2.4 billion euros spent by the EU is "most likely seriously underestimated as the EU is not open about who it funds", adding "it is just not healthy that the EU funds its own cheerleaders."
Open Europe blog The hard sell: EU communication policy and the campaign for hearts and minds
New Swedish study: Still unclear whether the benefits of joining the euro outweighs the costs
A new study from the Swedish Centre for Business and Policy Studies concludes that while it would be beneficial for Denmark to join the Euro, due its currency being pegged to the Euro, for Sweden and the UK it remains unclear whether "the benefits of increased trade and increased exchange rate stability outweighs the costs of losing the autonomy over monetary policy."
Svenska Dagbladet Centre for Business and Policy Studies
German Constitutional Court handed new complaint on EU treaty, possibly delaying Lisbon's entry into force
EUobserver reports that Germany's Constitutional Court has been handed a second complaint over the Lisbon Treaty, with the potential to delay the country's final ratification of the document for several months. The authors of the complaint, including a former MEP and a former Chief Executive of Thyssen, say that "a prognosis on European integration given by the country's constitutional court in a 1993 judgement on the Maastricht Treaty - which paved the way to the euro - has turned out to be false, as instead, EU integration has been characterised by continuous breaches of the stability pact, a presumptuous over-stepping of power by the European Commission, unaccountable leadership and dissolution of the separation of powers".
EUobserver
EU criticised for resuming farm export subsides;
Lamy: Economic bailout packages could harm developing countries
Trade ambassadors from the Cairns Group, a coalition of 19 countries including Australia, Brazil, New Zealand, South Africa, Canada and Indonesia, have said the EU's move to offer new export subsidies for dairy products could in fact prolong the world's economic troubles. A statement from the group said. "The reintroduction of export subsidies at this time ... is likely to drive international prices down to artificially low levels and, at the very least, prolong the current downturn."
Meanwhile, World Trade Organisation Director-General, and former EU Commissioner, Pascal Lamy has warned that the recent economic bailout packages could harm developing countries, who are unable to afford such measures.
Times Reuters
Commission pledges funding for Nabucco pipeline
There are conflicting reports over European Union plans to provide funding for the Nabucco pipeline project, which would bring natural gas to Europe from Central Asia, through Turkey. EurActiv reports that EU Energy Commissioner, Andris Piebalgs, has said there will be no funding for the Nabucco project, and that although the EU could "facilitate loans", he said the EU would, "not go beyond it, because then it doesn't make sense, it's not anymore the consortium's project but a public-private partnership".
However, the FT and the WSJ report that the European Commission is planning to invest 250 million euros in the project and that, "The sum would cover just 3 per cent of the expected cost, but would provide a capital base for further lending."
According to EurActiv, Czech PM Mirek Topolanek has said that Russian plans to build the North Stream and South Stream pipelines are a "direct threat to the Nabucco project." Russia's ambassador to the EU, Vladimir Chizhov, said yesterday that "there is no gas to fill the [Nabucco] pipe."
Meanwhile, Urkanian President, Viktor Yushchenko, has said that he does not believe the recent gas crisis has damaged EU-Ukrainian relations and that, "I would say that the gas crisis even makes the impetus for integration stronger", reports the FT.
FT IHT BBC EurActiv EurActiv 2 WSJ WSJ: Wilson FT 2 European Voice
Rating agency Fitch projects record borrowing for European countries;
Germany set for record postwar deficit as CDU pleads to sell German gold
Stephanie Flanders reports on her BBC blog that ratings agency Fitch has released a special report on borrowing by European governments, questioning whether it is sustainable. She notes that "they think that the rise in debt levels is manageable for big countries like the UK. But the fine print is not very reassuring." Fitch projects that European governments will have to raise a total of nearly 2 trillion euros in 2009, or 17% of GDP, and borrowing by the five largest borrowers - France, Germany, Italy, Spain and the UK - will be at a record level relative to GDP and the figures are even worse for some of the smaller countries, such as Ireland.
Meanwhile, the FT reports that German Chancellor Angela Merkel has said that Germany is this year set to record its largest postwar deficit. FT Deutschland further reports that German Christian Democratic Party CDU wants to sell some of the gold reserves of the German state, which are the second biggest in the world and amount to 3400 tons.
BBC: Flanders blog FT FT Deutschland Eurointelligence WSJ EUobserver
New report argues EU's voluntary lobby register failing
According to The Parliament, a report published by the Alliance for Lobbying Transparency and Ethics Regulation (Alter-EU) has concluded that the EU's voluntary lobby register has failed to increase transparency. The reports says, "the existing voluntary approach is failing" and "the compliance rate is alarmingly low and the overall quality of information disclosed is very poor."
The Parliament Alter-EU Report
EU struggling in a "winter of discontent"
Writing in the Telegraph, Adrian Michaels argues that there is growing despair in Europe at the handling of the financial crisis, referring to it as "Europe's winter of discontent." He cites Iain Beff, a Professor at the LSE, arguing that recent protests in Latvia represent a loss of faith in the European project.
Meanwhile, the Irish Times reports that Greek farmers have blockaded the main roads for the transport of goods to and from Europe. The Bulgarian government has appealed to the Commission to intervene.
Telegraph: Michaels Irish Times
EUobserver reports that the leader of the Alliance of Liberals and Democrats (ALDE) in Europe, UK Liberal Democrat MEP Graham Watson, has pledged to end the traditional "gentleman's agreement" to share the two terms of President per Parliament between the European People's Party (EPP) and the Party of European Socialists (PSE). Instead, he has said he would like to make the decision public, and the Parliament "more responsive to Europe's people".
EUobserver
Iceland's President Olafur Ragnar Grimsson has asked the country's Social Democrat party to set up a new government, following the collapse of the previous conservative-led coalition on Monday.
EUobserver
Russia is shelving plans to put short-range rockets inside Kaliningrad in response to US hesitation on extending its global missile shield to Poland and the Czech Republic.
EUobserver
Only 47 percent of Luxembourg's population has confidence in the European Union, down from 55 percent in spring 2008, according to a new Eurobarometer survey.
Wort
EU Internal Markets Commissioner Charlie McCreevy has argued that the political environment in Europe is now favourable for over-hauling the EU's financial market regulation, saying, "In Europe there is now a broad consensus that our supervisory systems have not been and are not up to the mark".
WSJ FT
The European Parliament has refused permission for a conference on smoking legislation to be held on its premises, a decision that has been branded "outrageous" by MEPs involved in the event, reports The Parliament.
The Parliament
Le Monde reports that Iran has claimed that "the EU was opening the door to friendship and cooperation with terrorists" after it crossed off the People's Mujahideen Movement from its terror list.
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Chinese Premier Wen Jiabao is in Europe this week, meeting with European leaders to bolster relations, however The Parliament website reports that he will not meet French President Nicolas Sarkozy, in response to Sarkozy's meeting with the Dalai Lama last year.
FT The Parliament
UK
Mandelson pledges £2.3 billion to aid car industry
Business Secretary Peter Mandelson yesterday announced a £2.3 billion rescue package for the car industry, comprising of a £1.3 billion guarantee to unlock funds from the European Investment Bank, as well as £1 billion in further loans reports the Times. Lord Mandelson said the money would pave the way for the "reinvention" of a greener motor industry.
FT Times Times: Leader Mail Mirror Telegraph Telegraph: Leader Independent
Open Europe is an independent think tank campaigning for radical reform of the EU. For information on our research, events and other activities, please visit our website: openeurope.org.uk or call us on 0207 197 2333.
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