Open Europe press summary: 4 March 2009

Europe

Darling backs EU financial "early-warning system" but rejects proposal for pan-European regulator
The FT reports that Alistair Darling has backed an EU financial "early warning system" but opposes the creation of a pan-European regulator with powers to set detailed rules over national regulators. The paper notes that this differs from proposals outlined last week by an EU Commission taskforce headed by former French central banker, Jacques de Larosiere.

Larosiere advocated giving the three existing committees of national supervisors - covering banking, insurance and securities markets - greater powers. By contrast, the UK Chancellor's proposed body would have no power over national supervisors and would not prescribe "detailed supervisory practices", signalling opposition to the establishment of a pan-European regulator with strong powers to intrude in national regulation.

The article notes that Darling has given broad backing to the separate proposal for a pan-EU body to monitor systemic risks and provide an "early warning system" for other European regulators. But he opposes the body working under the auspices of the European Central Bank, arguing it should be independent and accountable to the European Council.
FT

Irish Archbishop: It is foolish to believe Ireland's Lisbon protocols won't be challenged
In a speech in Dublin yesterday, the Catholic Archbishop of Dublin Diarmuid Martin said, "It would be foolish to think that such protocols might not be challenged on the basis of other aspects of European law and philosophy, especially non-discrimination and equality norms."
Irish Times Irish Times-leader

Almunia: There is a eurozone rescue plan but "It's not clever to tell you in public"
EUobserver reports that there is an EU rescue plan in place to help any member of the eurozone which defaults on its debt payments. It quotes EU Monetary Affairs Commissioner Joaquin Almunia saying, "If a crisis emerges in one euro area country, there is a solution before visiting the IMF...You can be sure that there is a solution. And you can be sure that it is not clever to tell you in public what the solution is. But the solution exists ... we are equipped intellectually, politically, and economically to face this crisis scenario."

It goes on to report that "Later in the day a commission spokesperson referred to the balance of payments facility that has been used to support both Latvia and Hungary", which was set up in 2002 to allow the commission to make loans to non-euro area countries experiencing difficulties meeting debt obligations."

EurActiv reports that Almunia has said that it is "possible and reasonable" to issue joint EU bonds to raise money for troubled member states, but that "it is up to member states to decide, and many of them oppose the idea".

Writing in the Telegraph, Simon Heffer argues that Germany should refuse to bailout other countries saying, "why should they pay for the unregenerate behaviour of others?..If Mrs Merkel wants to stay in power, and German workers wish to keep the fruits of their own labours, they must harden their hearts."
FT IHT Telegraph EU Referendum blog EurActiv FT: Leader Telegraph: Heffer EUobserver WSJ

EU environment ministers unable to agree how to fund climate change reduction in the developing world
EUobserver reports that environment ministers from the 27 member states yesterday failed to produce any clear funding commitments to help the developing world tackle climate change. Ministers were discussing proposals published in January by the European Commission on what stance to take at the upcoming UN conference in Copenhagen in December, where a replacement for the Kyoto Protocol - due to expire in two years - is to be negotiated.

The EU is hoping for a commitment from developing countries - with the exception of the least developed ones, mainly in sub-Saharan Africa - to CO2 reductions of between 15 and 30 percent on 1990 levels.

Environment ministers agreed that roughly 175 billion euros annually by 2020 would need to be spent by all countries around the world to combat climate change, with half of that having to be invested in the developing world. The two issues of how much of that half would come from the EU and, crucially, how much would come from each EU member state are at the heart of debate between ministers.

Paris has called for the allocation of member state funding to consider the amount of emissions per capita. France has the lowest emissions per capita in the EU. Poland, meanwhile, has expressed opposition to the idea due to its dependence on coal, an extremely dirty source of energy.

Meanwhile, the European Commission's backing for so-called carbon capture and storage technology in a 5bn euro economic stimulus package has sparked fresh division in the EU, the FT reports. The technology aims to bury emissions underground in saline aquifers to prevent the release of greenhouse gases and according to the draft proposal, five test projects in Germany, the UK, the Netherlands, Spain and Poland will receive a total of 1.25 bn euros. Critics say that including untested energy technology in a stimulus plan will have few short-term benefits. A final version of the proposal will be presented ahead of the EU summit on March 19.
FT EUobserver Deutsche Welle

Icelandic support for joining the EU falls
According to the FT, support in Iceland for joining the EU now stands at less than 40 percent, compared to highs of nearly 80 percent at the height of the financial crisis. The paper reports that reasons for the fall in support include "fissures inside the eurozone" which are "undermining the zone's attractiveness to a tiny country."
ORF FT

General Motors Europe seeks aid from EU governments
General Motors has announced that its European arm could run out of money as soon as next month, putting 300,000 jobs at risk, according to the FT. GM has asked EU governments for 3 billion pounds in state bail-out aid in exchange for shares in its European business.

The Telegraph reports that Carl-Peter Forster, President of GM Europe, has said the UK Government should support the carmaker and quotes him saying "The UK cannot expect for the German taxpayer to shoulder all the burden."
FT Telegraph BBC FT: Lex

ECB opposes fast track Euro entry for struggling eastern Europe
The WSJ reports that the European Central Bank (ECB) opposes changing the criteria for Euro adoption to put eastern European countries on a faster track to join the common currency. Hungary and Poland in particular have been pressing for quick entry. Hungary has suggested shortening the time candidates must link their currencies to the Euro before they can adopt it. Poland, meanwhile, wants to quickly link its currency to the Euro, in order to start the the waiting period of at least two years.

The article notes that the ECB is concerned that a currency linked prematurely to the Euro could suffer a speculative attack by traders. That, in turn, could destabilise the currencies of other countries already linked to the Euro.
WSJ

EU Enlargement Commissioner Olli Rehn said yesterday that the proposal to set up a mediation group in order to solve the year-long border dispute between Croatia and Slovenia to unblock Croatia's EU accession talks is the only "viable way forward" and the last chance for Croatia to join the EU by 2011, as scheduled.
EUobserver

Christine Lagarde, French Finance Minister, and Peer Steinbrück, her German counterpart, yesterday said they wanted leaders meeting at the G20 summit on April 2 to commit to a crack-down on "tax havens" around the world.
FT

The EU yesterday introduced temporary anti-dumping and anti-subsidy duties on imports of US biodiesel.
FT IHT WSJ

Irish Agriculture Minister Brendan Smith has announced he will meet the Commission to press for more subsidies for dairy farmers.
Irish Times

The European Commission announced yesterday a 17 million euro investment to fight a huge rise in the spread of child abuse images over the internet.
Guardian

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