Open Europe press summary: 16 June 2009

On Thursday, Open Europe is holding a lunchtime debate on the Lisbon Treaty and the second Irish referendum, at The Centre in Brussels. Places are limited. If you would like to attend, please send an email to meet@thecentre.eu with 'Lisbon Treaty' in the subject field and stating clearly your name and organisation. For further information, please contact Pieter Cleppe at pieter@openeurope.org.uk or on 00 32 477 68 46 08.

Europe

UK and Netherlands want Irish 'guarantees' on Lisbon Treaty to be Council 'decisions', rather than protocols;
Irish government looks to bring second referendum forward to September
The Irish Times reports that Irish Foreign Minister Micheál Martin has said the Irish government is "quietly confident" that it will get the 'guarantees' it is seeking on the Lisbon Treaty. The government has sent a draft of the 'guarantees' to other EU leaders, and is seeking legally-binding guarantees on taxation, neutrality and ethical and social issues such as the right to life, family and education. It is also seeking a declaration on workers' rights and social policy. The paper publishes a draft text of the 'guarantees' it hopes other EU governments will agree to at the European Council meeting later this week.

However, EUobserver reports that there is continuing disagreement over the legal nature of the 'guarantees'. The 'guarantees' have to be ratified by all 27 member states to be legally binding, according to European Voice, but some member states are concerned that this would re-open domestic debates on the Treaty. One option that has been suggested is attaching the decisions as protocols to the next EU accession treaty, probably that of Croatia, which would have to be ratified by all 27 members.

The Irish Examiner reports that the UK and the Netherlands want to see the 'guarantees' remain as decisions of the Council of the EU. The Irish Independent quotes Czech Europe Minister Stefan Fule saying, "What was mentioned by many ministers today is that while we should approach this issue with creativity ... that should not mean we create problems in other member states." AFP quotes him saying: "Ireland wants an additional protocol to the Lisbon Treaty, which would have to be ratified by all 27 other member states."

Meanwhile the Irish Times reports that Irish PM Brian Cowen has been speaking to EU leaders in recent days with a view to bringing the second Irish referendum on the Treaty forward to the last week of September, or the first week of October. Cowen could announce the precise date of the second referendum this Friday, if there is agreement on the 'guarantees' at the Council meeting, according to the Irish Independent.

EurActiv reports on the effects of this on the formation of the new European Commission, which under current Nice Treaty rules would see the number of Commissioners reduced from 27. Germany has reportedly warned that if Lisbon is not in force by the time a new Commission is formed, Berlin would ask for a 12-member Commission, or "maximum 18", thus implying that "problem countries" would not be represented in the Commission, according to the article, and increasing pressure on the countries yet to ratify.
Irish Times European Voice Irish Times 2 Irish Independent Irish Examiner EUobserver Irish Independent 2 EurActiv Irish Times 3 AFP Belfast Telegraph FT AFP

MEPs launch legal bid to oppose reform of controversial second pension scheme
The Telegraph reports that dozens of MEPs, including Britons, are taking legal action to try to block reforms of their second pensions which are intended to cut the controversial scheme's cost to Europe's taxpayers. The European Parliament's Additional Voluntary Pension Scheme is a controversial perk that comes on top of national pensions already paid for their work as an MEP. MEPs pay £1,052 a month into the scheme. That amount is then doubled by a publicly funded payment of £2,104 from the EU taxpayer. MEPs therefore can expect an extra pension benefit, on top of generous national schemes, worth an annual £14,736 for every five year term of office.

The European Parliament's authorities decided in April on a number of emergency reforms to the extra pension to help cover a £100 million deficit in the fund following the financial crisis, including raising the age from which MEPs can benefit, from 60 to 63, as well as ending early retirement at 50 and lump sum payments. However, the paper has learned that up to 65 current and former MEPs, whose identities are secret and include members who stood down at European elections two weeks ago, have launched legal action to protect their "vested rights and legitimate expectations".

British Liberal Democrat MEP Chris Davies, who benefits from the scheme, said, "From a legal point of view they might have a case. But it is extremely unseemly that during an economic crisis, that has hit our voters hard, MEPs should be sticking out their begging bowls and paying out money to lawyers to defend a pension scheme that must be one of the most generous on earth."

The second pension scheme has been closed for new MEPs elected in June 2009 but will still apply for hundreds of current and past MEPs.
Telegraph Open Europe blog

City AM: Proposed EU financial regulation is "destructive and counter-productive"
Sarkozy: "It is the time to go as far as possible"
The Editor's letter in City AM looks at the EU's proposed directive for tougher regulation of hedge funds and accuses the EU of "gearing up for a destructive and counter-productive onslaught, no surprise given that it understands global finance even less than those who thought that sub-prime debt was as safe as gilts. The EU's early proposals fail to understand how hedge funds and other alternative investment funds operate; if Brussels gets its way, the City will face its very own Sarbanes-Oxley, a disastrous set of rules that miss the point, do nothing to reduce the risk of scandal and send hedge fund managers scuttling to Switzerland, Dubai and Singapore."

Meanwhile, the FT reports that a letter sent by some of the biggest Dutch and UK investors in hedge funds to EU Internal Markets Commissioner Charlie McCreevy has warned that the regulatory burden of the EU's proposed directive on alternative investment funds could "far outweigh any benefits" and "cannot be right". The article argues it is significant because it is the first time this group has spoken out in the debate over the directive.

During a speech at the International Labour Organisation (ILO) in Geneva yesterday, French President Nicolas Sarkozy said "in many fields it is necessary to go a lot further to reconstitute the financial system", emphasising the need to review "the prudential surveillance of banks, hedge fund regulation, accounting regulations, remuneration methods." Sarkozy added "the crisis gives us again the freedom to imagine. It is the time to go as far as possible."
FT EurActiv City AM Liberation ILO Speech

UK business groups welcome Conservatives' commitment to returning EU employment powers to UK
The FT reports that UK business groups yesterday welcomed Shadow Business Secretary Ken Clarke's announcement that the Conservatives will seek to return employment law powers from Brussels to the UK. Alistair Tebbit, Head of EU Policy at the Institute of Directors, said "We would be delighted if any British government was able to find a way to end the flow of employment legislation permanently. If this means scrapping the EU's employment powers, so be it." According to the article, the CBI also added that it would support "any reduction in the scope of European social legislation affecting the UK."

However, David Yeandle, Head of Employment Policy at the EEF expressed concern about the Conservatives' policy, saying "I'm not sure this [Tory approach] is terribly useful and it could be counter-productive...I have a horrible feeling the UK would pay a price, in terms of other member states demanding something in return."
FT

ECB warns that eurozone banks have only absorbed 60 percent of projected losses;
Pressure grows for public and transparent stress tests
The FT reports that eurozone banks face additional losses of more than $283bn (£173bn) this year and next, the European Central Bank has warned. The paper's Lex column notes that the ECB's latest six-monthly financial stability review suggests eurozone banks have absorbed barely 60 percent of losses estimated for 2007-2010. The Telegraph notes that the ECB's report is likely to put pressure on Germany to agree to public stress tests of its banks. France's Finance Minister, Christine Lagarde, favours transparent tests across the EU, but Berlin seems determined to buy time until after the elections in September.

Leading US economist Nouriel Roubini has criticised EU member states that have allocated "too little money" to help banks overcome the crisis in an interview with German daily Handelsblatt. He also criticised the ECB for underestimating "how much the crisis will damage the European economy".
Telegraph CityAM FT FT: Lex WSJ: Lannoo Handelsblatt

EU's structural funds have made little difference in the crisis, critics say
EUobserver looks at the role of the EU's structural funds - worth €347 billion over a seven year period - in the economic crisis, and notes that the funds have made little difference. The article quotes Monika Mura, an expert on regional policy from the University of Bristol, saying, "The reform of structural funds was done when there was no crisis and when they had to meet other priorities. Now with the crisis the priorities should shift more towards unemployment." The article also notes that the Court of Auditors said in its last report that the funds were marred by irregularities, estimating in its last report that "at least 11 percent of the total amount reimbursed (in 2007) should not have been reimbursed."
EUobserver Open Europe research Open Europe research 2

Gordon Brown touted as potential EU President;
Conservative MP: It would be "a slap in the face" to the British electorate
The Express reports that Gordon Brown is apparently now one of the frontrunners to be the first EU President, a position which will be created if the Lisbon Treaty is ratified. Conservative MP Philip Davies responded "It would be a complete slap in the face" and "completely wrong for Mr Brown, who has been rejected by people here, to now decide even more things that would affect our lives."

On the FT Brussels blog, Tony Barber notes that the suggestion came from a high ranking EU diplomat and writes "Of course, Brown may have other career plans, such as winning the next British general election and stabilising the British economy. But if for some unimaginable reason these plans didn't work out, might there be life after political death for him in Brussels?". Barber adds that neither Merkel nor Sarkozy are interested in the position and it is highly unlikely Berlusconi would be entrusted, leaving the UK and Brown or Blair.
Express FT: Brussels blog

Barroso may have to wait until July to be re-nominated
The WSJ notes that EU member states at the EU summit this week will "begin one of the world's most complex pieces of horse-trading", deciding which country gets which Commission position, with José Manuel Barroso remaining the favourite for the position as Commission President.

Le Monde reports that Jose Barroso's formal re-nomination bid for Commission President will not take place until mid-July. The European Council's goal is to consult with the newly elected European Parliament first, then make an informed decision. They will however give political backing to Barroso at the end of this week as the EU heads of state meet in Brussels.

Les Echos reports that Lithuanian President-elect Dalia Grybauskaite has said that the Lithuanian Finance Minister Algirdas Semeta could succeed her as Financial Programming and Budget Commissioner. Grybauskaite added that "his candidacy does not seem the best but he seems reasonable". She also said that Lithuania should retain the portfolio.
WSJ Le Monde ABC Les Echos

UK struggling to meet EU's renewable energy targets;
Government reveals UK is third from bottom in EU league table for renewables
The Guardian reports that a Parliamentary Answer has revealed that the UK is third from bottom in a league table of renewable energy across the EU. The article notes that the numbers reveal the scale of the challenge facing the UK as it attempts to meet a commitment to source 15 percent of its energy from renewable sources by 2020, part of binding EU climate targets.
Guardian Open Europe research

Merkel defends German state aid to companies
Handelsblatt reports that German Chancellor Angela Merkel has defended state measures in helping the German industrial sector regain its position on the global market, saying "I cannot close my eyes from what other countries are doing for jobs and the industry".
Handelsblatt 1 Handelsblatt 2

EU agrees to accept Guantanamo detainees
The EU and US have adopted a joint statement on the resettling of inmates from the Guantanamo Bay prison in Cuba. The IHT and the BBC report that there were initial difficulties in reaching the agreement because of the open borders between the 27 EU member states, but that Italy later agreed to accept at least 3 former prisoners, after six other EU states already said they were willing to accept former detainees.
WSJ Tribune EUobserver BBC European Voice Guardian El Pais Repubblica ABC

BNP 'optimistic' of forming new group in the European Parliament
BNP leader and newly elected MEP Nick Griffin met with other far-right parties in Brussels yesterday in the hope of forming a new group in the European Parliament. Creating a group would entitle the parties to greater funds for offices and staff.
Parliament

Approximately 1.9 million people lost their jobs in the EU during the first three months of this year, according to new figures released yesterday by Eurostat.
EUobserver IHT El Pais

Bruno Waterfield's Telegraph blog reports on the European Parliament's demand that former Conservative MEP Den Dover repay £538,290 in allowances, and criticises the European Parliament and the Conservatives for not making the figure public, which only came to light following a legal action brought by Mr. Dover.
Telegraph: Waterfield blog

Jean Quatremer: Who elects the 'ghost MEPs'?
Jean Quatremer writes on his Coulisses de Bruxelles blog that should the Lisbon Treaty pass, 12 countries will gain MEPs, and Germany is set to lose 4. However, he asks "who elects these new MEPs?" He notes that certain countries have decided to do nothing until the Irish referendum on the Treaty, while others have put together ad-hoc laws so that the votes from last month's European elections go to the next person on the list.
Coulisses de Bruxelles

Leader of the European Socialists Poul Nyrup Rasmussen writes in the Guardian that "it is important not to exaggerate reports of the demise of European socialism, and not to draw hasty conclusions from these [European elections]."
Guardian: Rasmussen

Agence Europe notes that despite several high-level meetings yesterday intended to seek a solution to the Croatia-Slovenia border dispute, which is holding up Croatia's EU accession bid, no "tangible progress" has been made.
No link

The German government will today publish a list of all German recipients of EU agricultural subsidies, after being forced to do so by judges. However, DPA reports that Bavaria is still refusing to publish the information.German Government CAP site DPA DPA 2

El Mundo reports that the EU has extended its anti-piracy mission in Somalia until 2010.
El Mundo

Alexander Lambsdoff argues in the IHT that the shift in election preferences from the left to the right and the gain for extremist parties will make the European Parliament a "stronger, more democratic body."
IHT

UK

An ICM poll for the Guardian puts the Conservatives ahead on 39 points, Labour second on 27, the Lib Dems on 18, and 'others' on 15 points.
Guardian Guardian 2

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