Open Europe press summary: 6 January 2009

Europe

Israel ignores EU calls for a ceasefire in Gaza;
Sarkozy criticised for weakening "the strategic position of the EU"
The FT reports that Israel has rejected calls from visiting European foreign ministers for an immediate ceasefire, vowing to continue its ground offensive on the Gaza Strip. Speaking after a meeting with an EU delegation, including the foreign ministers from the Czech Republic, France and Sweden, Israeli Foreign Minister Tzipi Livni said, "A necessary war on terror does not end with an agreement. We don't sign agreements with terror; we fight terror."

EUobserver notes that in addition to the EU delegation French President Nicolas Sarkozy also met both Israeli Prime Minister Ehud Olmert and Palestinian President Mahmud Abbas yesterday, expressing "deep concern" at the situation. However, the FT reports that the Italian government has called on Sarkozy to allow the EU to take the lead, suggesting he was undermining the bloc's diplomatic efforts. French officials said the Middle East peace drive was not about supplanting the Czech EU Presidency but using French diplomatic leverage to try to secure a truce.

L'Express quotes Italian Foreign Affairs Minister Franco Frattini saying, "When everybody has his own mission, this weakens the strategic position of the EU". Nouvel Observateur notes that French politician François Bayrou has also criticised Sarkozy's actions in the Middle East, saying that they risk reducing the voice of the EU.
WSJ Irish Times Times Irish Times 2 Guardian EUobserver AFP Tijd FT FT 2 L'Express Nouvel Observateur

EU gas supplies suffer further cuts;
Delegation to meet Gazprom officials today
Russia has ordered further cuts in gas supplies to Europe as part of its ongoing dispute over payment from Ukraine. The Times reports that EU ambassadors predicted cuts of up to 20% at a private meeting yesterday and 10 countries have already reported reduced gas flows from Ukrainian pipelines. The Commission and the Czech Presidency dispatched a fact-finding mission to Kiev yesterday to investigate the disruptions, according to European Voice.

EUobserver states that supplies from Russia to the EU via Ukraine fell overnight by 70%. The article also states the Prime Minister Valdimir Putin ordered the cuts in supplies to the Gazprom CEO live on Russian television.

The Irish Times writes that both Moscow and Kiev have urged the EU to mediate the dispute, but it is "loath to intervene". However, a European delegation including Commission officials are due to meet executives from Gazprom, the state-owned energy firm, today in Berlin.

A leader in the WSJ argues that Europe has failed to diversify Europe's gas supplies and it has been indecisive about alternate pipelines to pursue, such as the Nabucco pipeline, which could supply gas from central Asia rather than Russia. A comment piece by Jan Rokita in the Polish daily Dziennik argues that the decision of Bulgaria and Hungary to opt for the South Stream gas pipeline project over the Nabucco pipeline project, of which they were important partners, was a major event in 2008 and came following influence from Moscow.
Times-Leader Times WSJ WSJ-Editorial Irish Times Independent EUobserver AFP IHT Irish Independent FT Telegraph BBC European Voice EurActiv Tribune Telegraaf

New German stimulus package could violate EU stability pact
Details of a new German stimulus package have emerged, following a meeting of the leaders of Chancellor Angela Merkel's coalition in Berlin last night. The package will be worth 50 billion euros and will be spread over 2009 and 2010. The measures are expected to include investment in transport, education and infrastructure projects in an effort to save and create jobs and shelter the German economy from the worst part of the recession.

However, the three parties of the government coalition remain at odds over whether to include tax cuts in the recovery plan. The Christian Social Union, the Bavarian sister party of Merkel's Christian Democrats, has been pushing for making tax cuts part of the package. Merkel has previously resisted such a move, arguing that VAT cuts do no not boost consumer spending, but now appears willing to give way. The Social Democrats, who are also in the coalition, have ruled out tax relief, calling instead for increased taxation on high-income earners and more welfare spending.

The Times quotes the Christian Democrat budget expert Steffen Kampeter criticising the government for running up the debt. "The stimulus programme, as presently conceived, is simply a cheque that will have to be settled by the next generation. These measures are not about economic effectiveness but about political symbolism and creating the illusion of action," he said. Frankfurter Allgemeine Zeitung notes that the package may take Germany above the limits of the EU's stability and growth pact. A spokesman for Finance Minister Peer Steinbrück is quoted saying that "at 50 billion euro, we will have crossed the limits".
Times WSJ Guardian EUobserver FT FAZ Figaro

Open Europe's research on the EU's communication policy was featured in an article in Dutch magazine Elsevier.
Elsevier The hard sell: EU communication policy and the campaign for hearts and minds OE press release

Benn: EU labels rules "nonsense"
Environment Secretary Hilary Benn has said the Government is pushing for improvements to EU rules on food labels to show more clearly where an animal is born, reared and slaughtered, reports PA. Under current EU legislation a product's country of origin is the place where it underwent its last significant process. For example, a pork pie made from Danish pork could be labelled as British if it was processed in this country - a system Mr Benn described as "nonsense".

Spain to face painful adjustment in eurozone
The FT examines the housing market bubble, arguing that Spain owes its high economic growth of recent years in part to unsustainable spending on housing. In the past to correct this it would have devalued its currency, which is now not an option in the eurozone.
FT

Pound resurgent against Euro
The pound saw its biggest one-day rise against the Euro yesterday, since the launch of the single currency nine years ago, reports the Telegraph. The global head of foreign exchange strategy at BNP Paribas is quoted in the Irish Independent saying that, "Europe is going to provide a lot of negative news going forward".
Irish Independent Telegraph

Abramowitz and Serwer: EU must face realities in the Balkans
In the WSJ, Morton Abramowitz and Daniel Serwer write that "a divided EU is allowing the Balkans to slide toward greater instability". They argue that although the EU regards Serbia as the key to stability in the Balkans it fails to acknowledge "its policies toward Kosovo and Bosnia and the fact that Serbia does not meet EU requirements for political and economic reform."
WSJ-Abramowitz and Serwer

A leader in the FT looks at the "reinvention" of Europe's left, arguing that "left parties should distinguish themselves by remaining enthusiastic champions of the European Union."
FT

Former EU Commissioner Pascal Lamy is set to run unopposed for a second term as Director-General of the World Trade Organisation.
IHT

UK

Row breaks out over UK's biggest renewables project
The Guardian reports that Government consultants have been accused of miscalculating the costs of the Severn barrage project, which could meet up to 7% of the electricity consumption of England and Wales and represent a big step towards Britain's target of generating 35% of all electricity from renewable sources by 2020. Correspondence seen by the paper shows that a row erupted between the Government's consultants and a company promoting a scheme that environmental groups and other engineers claim would be far less damaging, as well as cheaper and more efficient.

Meanwhile, a leader in the Telegraph bemoans the UK Government's "perverse decision" to expand wind turbine provision and delay commissioning more nuclear power stations, creating uncertainty about future energy security.
Guardian Telegraph: Leader