Open Europe press summary: 9 January

Europe

Barroso: we need "mutualisation" of EU energy stocks
The front page of the Express reports that MEPs are calling for the creation of a European gas reserve, made up of British and Dutch supplies, which member states can tap into in the event of any future shortage. The transfer of ownership would be enacted under the clause of the Lisbon Treaty which gives the EU the power to "ensure security of energy supply". According to the paper, in a closed-door meeting with high-ranking EU politicians, Commission President Jose Barroso called for a "mutualisation of energy stocks" and said it was vital that member states show "solidarity" with their partners in eastern Europe. He added that he would soon have the legal authority to take over control of energy reserves under the Lisbon Treaty.

Shadow Foreign Secretary William Hague is quoted saying, "EU Commission president Jose Manuel Barroso is right to say that the EU needs to help eastern Europe with its energy security. But giving the EU control over our national energy reserves is totally the wrong way to go about it. This is a regretful example of how the renamed EU constitution would give the EU too much power over our national affairs and why so important a treaty should be put to the British people to decide in a referendum. What we really need is a proper free market in energy in the EU. The EU already has the power it needs to achieve that."

Comment: In addition to giving the EU new powers relating to security of energy supply, to be decided on by majority voting, the Lisbon Treaty would also create a new obligation for security of energy supply policy to be framed "in a spirit of solidarity between member states." The European Commission has in the past proposed measures which would increase member states' holdings of emergency oil stocks and hand control of those stocks to Brussels. The Government successfully opposed these plans in 2002 but they remain on the table. The EU treaties have never before contained any specific powers on energy policy. When it was first proposed that these powers should be created during the European Convention (the conference which drew up the original EU Constitution in 2003), the UK Government was strongly opposed and tried to get them deleted. The Government said at the time: "This provision is unnecessary as all aspects of energy policy are effectively covered elsewhere in the Treaty e.g. single market, environment. In addition, we have detailed concerns on the text, which we consider may have the unintended effect of changing the boundaries of EU competence and the types of measure which will be subject to unanimity."
Express OE briefing on energy policy

Lisbon Treaty: Irish government discusses opt-out from EU defence policy
Agence Europe reports that after an informal meeting of foreign ministers in Prague yesterday the Czech Presidency of the EU undertook to find, with the Irish government, an "acceptable agreement" on the content and exact form of the "assurances" promised at the European Council of December 2008. Ireland has been promised 'guarantees', by June 2009, on a series of issues - number of Commissioners, Ireland's neutrality, tax policy, social, ethical and family policies - in exchange for the promise of a second referendum on the Lisbon Treaty. Czech Foreign Minister Karel Schwaerzenberg had expressed his confidence that his country would ratify the Treaty in the spring and that the Irish would vote "Yes" in the second referendum in the autumn.

The Irish Times reports that a paper is being developed between the Departments of Foreign Affairs and Defence and the offices of the Attorney General and the Taoiseach outlining assurances on neutrality. Although the precise details of the assurances are still to be decided, there has been talk of a possible opt-out in relation to defence policy, with some suggesting Ireland might withdraw from the European Defence Agency. The Minister for Foreign Affairs Micheál Martin is quoted saying, "An opt-out has not been decided but it's on the table for discussion. You could opt out of certain aspects of defence policy . . . It has to be carefully evaluated . . . In our discussions with the Danes, they cautioned very strongly against opt-outs because they felt it [the decision to opt-out from EU defence in 1992] was to their ultimate disadvantage."

Workers' rights have also been up for discussion, with trade unions reacting angrily at Britain's resistance to any suggestion of a possible legal guarantee on workers' rights. Martin said the Irish government "is preparing a paper on the issue in terms of first of all clearly understanding where we are in terms of protection of workers' rights and how the Laval judgment would not have applied in the Irish case, and also in terms of how can we work with other countries to close off any other potential loopholes that are out there," he says.

Martin said that in a second referendum he believed "that people accept that it is far better for Ireland to be at the heart of the European Union . . . rather than marginalising itself. I think that view is coming into the ascendancy." Asked about the "No means No" argument, Martin claimed: "We will not be asking people to vote on the same proposition."
Irish Times

EU deal to resolve gas dispute complication by role of Russian monitors
The BBC reports that more than 15 countries have been hit by the shutdown of Russian gas supplies. The EU said it had reached agreement on an observer mission to monitor gas flows, but it was unclear when supplies would resume.

The WSJ notes that the EU's efforts to restore gas supplies had "stumbled on" Russian resistance. Moscow said it won't turn on the taps until its experts are included in an international mission to monitor Ukraine's gas-transit system. European Commissioner for Energy Andris Piebalgs said that the EU had no problem with including Russian monitors, but that it couldn't force Ukraine to accept them. The FT notes that the Czech EU Presidency said that the dispute seemed to be moving towards resolution. However, one senior Czech official added with a note of caution: "There is no absolute deal."

The EU's so-called "gas co-ordination group" will convene today, to discuss how best to alleviate problems in the worst-hit regions by redistributing the bloc's overall supplies and possibly applying rationing.

A leader in the Economist notes that while the gas dispute "shows that Europe must reduce its energy vulnerability", new pipeline projects "are hugely expensive, environmentally risky and take years to construct. So other measures are needed in the meantime." The article notes that one option would be "to press Russia and Ukraine to sign long-term contracts, with accepted pricing formulae, similar to those that Gazprom already has with most EU countries."

In the WSJ, Francis Ghilès argues that the EU should look to North Africa for more of its energy imports: "North Africa, and particularly the large gas fields in Algeria, are set to play a growing part in Europe's energy mix. This is not least because the extraction and transport costs of African gas are considerably lower than those for new gas supplies from Russia and Norway."
IHT IHT 2 IHT: Leader FT FT: Betts Economist: Leader Economist Telegraph Telegraph: Waterfield blog BBC EU Referendum blog European Voice Liberation Irish Independent Irish Times Irish Times EUobserver Deutsche Welle Independent WSJ WSJ-Ghiles Times Mail Guardian

Dell move from Ireland to Poland to be investigated by Commission
The computer company Dell announced yesterday it would cut 1,900 jobs in Ireland, and move its manufacturing base to Poland, reports the FT. According to the Times, Dell is the country's second largest corporate employer and contributes about five percent of its GDP. PA reports that European officials are to investigate a 50 million euro aid package the Polish government used to attract computer giant Dell away from Ireland. According to the Times, the incentive provided by the Polish government is 150 million euros. Competition Commissioner Neelie Kroes said, "We need to investigate all the effects of this aid to verify that it contributes to regional development and to ensure that it will not reinforce Dell's position or create significant capacity in a market on the decline in the EEA".
Independent IHT FT BBC Times Irish Times

European Commission plans for new office space suffer amid allegations of conflicts of interest
EUobserver reports that the European Commission is looking for at least an extra 100,000 square metres of office space in Brussels. German MEP Ingeborg Grassle criticised the secrecy surrounding the Commission's decision-making process and called for transparency, saying "I am opposed to the commission sweeping everything under the carpet.". She raised concerns that one of Commissioner Siim Kallas' special advisors, Richard Boomer, is a Belgian real estate developer whose business partner is involved in one of the proposals.
EUobserver

WSJ: Czech Presidency has led to return of "straight talk";
An editorial in the WSJ argues that the Czech Presidency of the EU has led to a return of "political straight talk". It notes that while the Commission insisted the current gas crisis "was a 'bilateral commercial dispute' even as EU gas supplies were cut, Czech Prime Minister Mirek Topolanek pointed out on Wednesday that both firms are state-owned. 'Whatever they do they don't do without political interference,' he noted bluntly, demanding the resumption of gas deliveries."

The article contrasts the Czech style with that of the French Presidency under Nicolas Sarkozy: "There was no indulging in such honesty under the just-ended French EU Presidency...Mr. Sarkozy is still at it, judging by his finger-wagging at Israel and Hamas alike during shuttle diplomacy this week. Once he realizes that his stewardship of the EU is over, perhaps he'll take a lesson in moral clarity from his successors in Prague."

The Irish Times reports that the EU flag flew over the Czech President's castle for 20 minutes this week as a stunt by a Greenpeace activist protesting about Vaclav Klaus' eurosceptic views.
WSJ-Editorial Irish Times

Kroes criticised for failing to lobby effectively for competition status in Lisbon Treaty
A profile of EU Competition Commissioner Neelie Kroes in the Economist says that competition experts have criticised her for failing to lobby effectively enough to prevent the downgrading of the status of competition in the Lisbon Treaty. Because of a request from French President Nicolas Sarkozy, competition will no longer be one of the EU's main objectives if the Lisbon Treaty comes into force.
Economist

Telegraph: Euro is propelling Spain towards disaster;
Data suggest 3 percent contraction for eurozone
El Pais reports that Spanish unemployment has reached 3.1 million or 13.4 percent, after a collapse of the construction sector. The Telegraph reports that Employment Secretary General Maravillas Rojo said similar levels hadn't been seen since the recession of 1987 while a rise to 4 million this year can not be ruled out. The article goes on to say that "ten years after it was launched, the euro is propelling Spain towards disaster. In giving up control of domestic interest rates to the European Central Bank, Madrid handed over a vital instrument of macroeconomic management. It is learning to regret that. (...) The Spanish economy is weak; it needs lower interest rates and a softer currency. Such a prospect, however, doesn't suit Germany, the eurozone's dominant force, so Madrid has to sit and suffer while its people cry for help."
Telegraph Telegraph: Evans-Pritchard El Pais

Czech Finance Minister warns of risk from stimulus plan
The Czech Finance Minister, Miroslav Kalousek, has warned that the EU's fiscal stimulus package may harm the ability of some nations to refinance their debt, reports the FT. The article quotes Kalousek saying, "if discipline isn't adhered to, we'll have problems refinancing debts."
FT BBC

Greece, Spain, Hungary and Portugal have lifted restrictions on access to their labour markets for Bulgarian and Romanian workers. 14 member states have now lifted their restrictions.
BBC European Voice

Forsyth: We should reverse Landfill Directive
A comment piece by Frederick Forsyth in the Express argues against the EU Landfill Directive and writes that Britain should return to landfilling to resolve the build-up of recycling material as a result of the collapse of the market price.
No link

The Irish government will today tell the Commission that it will take until 2013 before Ireland's deficit in the public finances will go back under the permitted ceiling of 3 percent.
Irish Independent

The German government has injected 10bn euros into Commerzbank, the second largest bank in the country, acquiring a 25% stake plus one share. The IHT reports that the recapitalisation took place to save the takeover of the Dresdner bank, agreed last August.
Independent IHT FT FT: Lex Telegraph BBC FTD

A piece on Mary Ellen Synon's blog argues that Nicolas Sarkozy's treatment of the Czech Presidency in the Gaza crisis is indicative of the power grab in the Lisbon Treaty by big countries at the expense of smaller ones.
Mail: Synon blog Independent

Angela Merkel and Nicolas Sarkozy have warned the US not to block attempts to build an international financial regulator, calling for a new economic body similar to the UN's Security Council, reports EUobserver.
EUobserver IHT Guardian FT

A comment piece by Niles Gardiner suggests that the appointment of Michele Flournoy as the next US Under Secretary of Defence for Policy indicates that the Obama administration is likely to support the European Strategic Defence Policy.
ConservativeHome

UK

Cameron advised against appointing Ken Clarke - the most rebellious Conservative MP
The Evening Standard and the Mail report that Ken Clarke's hopes of a return to the shadow cabinet have been dealt a blow by a study showing he is the most rebellious Conservative MP. Since David Cameron took over as leader at the end of 2005, Mr Clarke has rebelled 33 times, mainly over the Lisbon Treaty. The ES Diary column reports that "an anti-Clarke revolt is gathering pace", but says that George Osborne would welcome Clarke as Shadow Business Secretary.

Meanwhile, there is continued speculation about a Conservative reshuffle.
Evening Standard Times Mail Telegraph

The Bank of England cut interest rates half a point to one point five percent yesterday, their lowest ever level.
Times WSJ Guardian

UK heading for hung Parliament?
A new YouGov poll for the Sun indicates that Britain could be heading for a hung Parliament at the next general election. The Conservatives are on 41 per cent, Labour on 34 per cent and the Lib Dems on 15 per cent. The Economist carries an article about the chance for the Liberal Democrats to play "kingmaker".
Sun Economist