Open Europe press summary: 10 February 2009

Europe

Czech Presidency calls economic summit before end of February following "protectionist" steps by Sarkozy;
EU Finance Ministers meet today to agree a plan on "toxic debt"
Czech PM Mirek Topolanek yesterday announced he was calling a summit of EU leaders before the end of February to address the economic crisis, reports European Voice. The IHT quotes him saying, "[it was] the really selective and protectionist steps and statements of, among others, President Sarkozy that led me to the intention to call this extraordinary council" of EU member states.

European Voice reports that President Sarkozy and Angela Merkel have backed the informal summit in a letter published yesterday by the French government from Sarkozy to Merkel which said it is "essential that a co-ordinated approach is followed to maximise the benefits for the whole of the Union".

On his FT blog Tony Barber writes that the letter was addressed to Topolanek, but made no mention of his initiative to call the summit. He writes, "The bad feeling between France and the Czech Republic is finally out there for everyone to see. For anyone who likes their European Union united, it is not a pretty sight." On his Telegraph blog, Bruno Waterfield writes that it comes following Sarkozy's threat last week to call a crisis meeting of eurozone members in Paris, which Waterfield argues is "not his job".

De Volkskrant reports that the Czech PM is annoyed by continuous, mainly French initiatives, such as the new economic plan being presented by Merkel and Sarkozy. A Czech diplomat is quoted saying "what sense does it make to run after every new initiative. Let's concentrate on the things that are necessary and already on the table."

The French government announced yesterday that it is to provide 6.5 billion euros in preferential loans to Renault and Peugeot-Citroën in return for pledges that the carmakers won't close factories or lay off workers in France, reports the WSJ. The IHT reports that a Commission spokesman said they would "scrutinise very carefully details of the subsidies" to ensure that they complied with state aid rules.

PA reports that Sarkozy has apologised for remarks he made last week in which he said Gordon Brown's VAT cut was a failure. Without giving an actual apology, PA notes that the Elysee Palace "deplored the manner" in which the remarks were reported in the UK.

Writing in Le Monde, Arnaud Leparmentier writes that at the Munich Security Conference over the weekend, Sarkozy was still in favour of a meeting of the heads of government of the eurozone, but Angela Merkel rejected it.

The Irish Times reports that EU Finance Ministers met yesterday and are meeting today to agree a co-ordinated strategy to deal with "toxic assets" held by banks, of an estimated value of several billion euros.

In addition to the issue of "toxic debt", Bruno Waterfield writes on his Telegraph blog that Finance Ministers will be talking about a possible European debt agency to share responsibility for debts, with the cost likely to fall on Germany. He quotes one official who says, "There is no paper on this. For obvious reasons, it is too sensitive, as sensitive as it gets".

PA reports that the Ministers' meeting this morning will also consider ways to raise money to boost jobs and growth. However, the UK is reportedly resisting transferring funds aimed at rural development projects to help prop up EU dairy farmers. It quotes a British official saying, "It is quite hard to make the case that spending money on dairy farmers will provide a stimulus for the general economy".
Telegraph: Waterfield blog FT Irish Independent Irish Times European Voice FT 2 Irish Times 2 IHT European Voice 2 AFP WSJ WSJ: Sutherland WSJ Independent EUobserver FT FT: Betts IHT 2 BBC European Voice 3 EurActiv EUobserver Telegraph: Evans-Pritchard EUobserver 2 Volkskrant

French Defence Minister: We're joining NATO to build European defence
In an interview with Le Monde about France's reintegration into NATO, French Defence Minister Hervé Morin says, "The construction of a European defence is our ambition... With this step, we wish to Europeanise NATO." He also indicates that there will be no referendum in France on rejoining NATO, and rules out sending more troops to Afghanistan for the moment.

Meanwhile, in a speech at the Munich Security Conference at the weekend NATO Secretary General Jaap de Hoop Scheffer said "We must move to new transatlantic balance - where the US and Europe share leadership and burdens more fairly. Let me restate that last phrase: 'leadership and burdens'. They go together. I am frankly concerned when I hear the US planning a major commitment for Afghanistan, but other Allies already ruling out doing more. That is not good for the political balance of this mission. It also makes the calls for Europe's voice to be heard in Washington ring a little hollow." He said: "in the transatlantic relationship as well, our aspirations for a healthier, more sustainable partnership can only work if both parties do their share. The Obama administration has already done a lot of what Europeans have asked for, including announcing the closure of Guantanamo, and a serious focus on climate change. Europe should also listen: When the United States asks for a serious partner, it doesn't just want advice. It wants, and deserves, someone to share the heavy lifting."
Le Monde

German court to decide whether Lisbon Treaty is unconstitutional
AFP reports that Germany's Constitutional Court will today consider claims that the Lisbon Treaty is unconstitutional. The article notes that the Federal Constitutional Court has allotted two days for the hearings - an extremely rare step that the plaintiffs say indicates that the court is taking the case very seriously.

The complaint has been lodged by MP Peter Gauweiler, who argues that the proposed Treaty calls into question the principle of democracy, a cornerstone of Germany's constitution, as it undermines the Bundestag - the country's parliament. EUobserver notes that the court's judgement is expected to be made in two to three months. But even if the court comes out in favour of the Lisbon Treaty, the process may not be over. Last month, a separate group handed in another complaint against the Treaty, listing political and economic faults.
EUobserver AFP

ECJ to deliver judgement on EU data retention law
EUobserver reports that the European Court of Justice (ECJ) will today deliver judgment on a case that will determine the fate of the EU's controversial data retention laws. Judges at the ECJ are deciding on whether the law, which allows telecom operators to keep EU citizens' phone and internet data for up to two years, can be allowed to remain.

The article notes that Ireland took the case before the Court, arguing that it had been made on the wrong legal basis. Dublin says the law should have been subject to an intergovernmental agreement between member states, requiring unanimity, because the law should come under the remit of justice and home affairs. However, the Commission based the law on the justification that it would improve the functioning of the internal market.

If the judges agree that the legal basis for making the law was false, then governments and the Commission will have to go back to the drawing board. However, the article notes that the Advocate General of the Court in autumn rejected Ireland's case saying that imposing a standard methodology for data retention helped the market for telecoms services, justifying its current legal basis. The Advocate General's opinion is usually maintained in the final court decision.
EUobserver

In an article on Conservative Home, Ruth Lea cites Open Europe's research on the cost of EU regulation to the UK economy, which found that EU employment law has cost Britain £31bn since 1998 and that new EU health and safety legislation has cost £5.7bn during the last decade.
Conservative Home Open Europe Research

EU Enlargement Commissioner: political climate not good for enlargement
Euractiv reports that Enlargement Commissioner Olli Rehn yesterday advised Serbian Deputy Prime Minister Ivica Dacic not to rush Serbia's formal application for EU membership, admitting that the political climate is not good for further enlargement.

Dacic said his country was considering applying for EU membership during the Czech EU Presidency. However, Rehn warned, "In the field of enlargement, we are working in a very challenging political context."
EurActiv

FSA Chairman: "We need either less Europe or more Europe"
The FT reports that Lord Turner, Chairman of the Financial Services Authority (FSA), has warned that the EU's current system of banking regulation is unsustainable. The article notes that European regulators are debating how best to rectify issues thrown up by the credit crunch. One option would involve pan-European supervision - something the FSA, one of Europe's most powerful regulators, has traditionally opposed.

Lord Turner said: "We have to face the fact that we are going to need either less Europe, or more Europe and we have to honestly debate that fact." Lord Turner said "less Europe" would mean limiting banks' ability to open new branches in other countries without separately capitalising each unit and letting them be overseen by the local regulator rather than their home country supervisor. Adding that, "More Europe' would involve forming more pan-European agreements, including on deposit insurance."
WSJ FT

IHT: Investment decisions need to be made soon to reach EU energy targets
The IHT's Inside Europe column reports that investment in green energy is stalling and "to achieve the EU's 2020 target, investment decisions need to be made soon on long-term projects to build a smart electricity grid, giant offshore wind farms and networks to bring renewable energy to the industrial heartland of Europe."

It notes that a record low carbon price last week of nine and a half euros per ton made it more economical to build a coal-fired power station than invest in renewable energy.

Mark Lewis, Managing Director of Commodities Research at Deutsche Bank, is quoted arguing that the recent low carbon price and selling off of carbon permits under the EU's Emissions Trading Scheme has sent "the wrong price signal for investment and for changing consumer behavior".
IHT The Parliament

Reacting to the European Court of Auditors' opinion that many billions of euros spent under the EU budget in 2007 were not accounted for properly, Dutch Finance Minister Wouter Bos has said, "In the Netherlands a Finance Minister would never approve this", Radio Nederland Wereldomroep reports.
RNW

On his FT Brussels blog Tony Barber looks at the most recent Eurobarometer survey in autumn 2008, noting that Irish people were among the most positive about the EU, which, he says, "is quite remarkable when you consider it was only last June when Irish voters rejected the EU's Lisbon treaty in a referendum. It tends to support the view that you can be positive about the EU and negative about the Lisbon treaty at one and the same time."
FT Brussels blog

Karl-Theodor zu Guttenberg is expected to be named as Germany's new Finance Minister, following the resignation of Michael Glos over the weekend.
FT IHT

On her Mail blog, Mary Ellen Synon looks at criticisms of the "voodoo monetary policy" of the ECB by William Buiter, professor of European Political Economy at the London School of Economics.
Mail: Mary Ellen Synon

The European Commission is pressing South Africa to give its support to an expanded trade deal between the EU and the region of southern Africa.
European Voice

EU member states have begun talks on who should be the next Special Representative in Bosnia and Herzegovina. The UK, Greece, Estonia, Austria and Italy have all put forward potential candidates for the job.
EUobserver

UK

In the Independent, Alistair Darling argues that the economic crisis is the "result of bad decisions by international banks".
Independent: Darling

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