Open Europe press summary: 24 July 2009

Europe

Sarkozy plans 'massive expansion' of Paris' financial district to rival London;
EU financial services regulation seen as means of reducing City's advantage
An article in the FT looks at Paris' desire to challenge the City of London as Europe's pre-eminent financial centre, noting that President Nicolas Sarkozy is planning a massive expansion of the business district on the north-western edge of Paris, known as La Défense. The article notes that the French government is intent on taking advantage of the financial crisis and the City's dented reputation. "It is clear today that the City is in great difficulty and that is an opportunity for France to reinforce its financial attractiveness," Patrick Devedjian, the Minister in charge of La Défense expansion, said last month. His ambition is to turn La Défense into a "great financial centre, rival to the City of London".

The article notes that France is pressing ahead with its drive to promote French competitiveness in financial services above all by pursuing the harmonisation of financial regulation and supervision at the EU level - a way of eliminating what Mr Sarkozy refers to as "regulatory dumping".

"I don't want to run down another city, another system, another supervisory scheme," says Christine Lagarde, Finance Minister. "But I do think Paris is well-positioned to play a key role in what will be a rejuvenated and re­invigorated but certainly disciplined financial sector."

The article notes that French bankers are counting on EU rules on bank capital requirements to end what they see as the advantages afforded to British banks under existing UK definitions. France is also calling for an EU clampdown on hedge funds, which many in the industry in London regard as protectionist.

In the Economist, Charlemagne argues that "mutual suspicions and national interests underlie European rows over financial regulation". He notes that earlier this month, Christine Lagarde tried to stop the chairmanship of the European Parliament's committee on financial regulation going to a British MEP, Sharon Bowles. Ms Lagarde spoke to key MEPs about blocking Mrs Bowles, who is a Liberal Democrat. Charlemagne adds that decisions on EU financial regulations will be taken by qualified-majority vote, so Britain will not have a veto.
FT: Analysis Economist: Charlemagne

Economist: "In effect", the German Court ruling said the EU is "not democratic enough to support further integration"
An article in the Economist looking at the German Constitutional Court's ruling on the Lisbon Treaty writes that, "in effect, the court said that the EU is not democratic enough to support more integration and told Germany, the biggest EU member, to hit the pause button." It also notes that, "By its ruling, the court sets itself up as final arbiter of further EU integration (and even of rulings by the European Court of Justice), argues Christian Calliess of the Free University in Berlin. That could threaten the EU's main function, to make and enforce European law."

Meanwhile, former MEP Jens-Peter Bonde, writing for EUobserver, argues that the ruling is a "fundamental rejection of the core constitutional content of the Treaty." He goes on, "The German Court implicitly invites any citizen, political party or business firm in Germany to take court cases before the German Constitutional Court if they find that a piece of proposed EU law is outside...delegated competences. Then it is the German Court that will decide - not the EU Court. This is a rejection of Art. 344 of the Treaty on the Functioning of the European Union".
EUobserver Economist

Three Conservative MPs receive £500,000 in CAP subsidies
A More4News investigation has revealed that three 'eurosceptic' Conservative MPs received over £500,000 in EU Common Agricultural Policy subsidies. Michael Ancram, former Conservative Party Chairman, received £211,451 in the last two years, whilst Philip Dunne, MP for Ludlow received £201,000, and David Heathcoat-Amory was awarded £114,096.

Although they are entitled to the subsidies, the Telegraph reports that "the payments could be embarrassing because all three have been prominent critics of the European Union".

Jack Thurston, who runs Farmsubsidy.org, commented: "This is money that is going to people for whom farming is not their primary source of income. We see this again and again - the bulk of the money is going to big companies and wealthy landowners." Defending his position, Mr Dunne said: "The CAP is in need of reform, but this has to be done at an EU-wide level, so as not to disadvantage UK farmers by unilateral action. It should also form part of wider global efforts to reduce farm subsidies."
Telegraph

Otmar Issing: Common eurozone bond would mean higher tax burden for French and German taxpayers
In an article for Europe's World, Open Europe's Pieter Cleppe highlights Open Europe's recent poll of German voters, which found that 70 percent are against using public money to bail out other countries in financial difficulties. He writes that, "As the economic recession limbers on, there have been suggestions from several corners that the bigger EU member states - led by Germany - might be willing to bail out the weaker ones - notably Ireland...Any financial help flowing across EU borders depends entirely on the willingness of taxpayers - particularly German ones - to cough up, and the clear public opposition to the idea makes it politically unfeasible."

Meanwhile in a separate article for Europe's World Otmar Issing, former member of the ECB's Executive Board, argues that a common eurozone bond is not a good idea and writes, "A common eurozone bond would certainly imply that countries like France and Germany would have to pay higher interest rates, and that would in the end mean higher tax burdens for their citizens."

He goes on to suggest, "The only workable cure for the eurozone's ills is a credible commitment by all its members to reform and fiscal solidity. That's what would overcome investors' doubts and lead to the shrinking of the bond spreads. A common bond would be no more than a placebo for a "weak" country, but it would also be harmful because it would foster the illusion that it is possible for a country to get out of difficulty without having undertaken fundamental reforms."
Europe's World OE press release OE press release in German OE blog Europe's World 2

An article in Dutch magazine Elsevier cites Open Europe's research on EU communication policy, which found that the EU spent €2.4bn on promoting itself in 2008 alone.
Open Europe research

An article by Hungarian News Agency MTI cites Open Europe's league table of MEPs.
Hungarian News Agency OE press release

Former Minister accuses Swedish Justice Minister of being untruthful over 'Stockholm Programme'
Thomas Bodstrom, former Swedish Justice Minister, argues today in an opinion in Swedish daily Dagens Nyheter that the EU's new justice and home affairs programme, the 'Stockholm Programme', will impact negatively on civil liberties. He goes on to argue that the current Justice Minister, Beatrice Ask, should stop pretending that the 'Stockholm Programme' would actually increase the protection of civil liberties.
DN

Netherlands threatens to block Iceland from joining EU if savers are not reimbursed
Euractiv reports that the Icelandic Parliament has postponed a controversial bill on the reimbursement of billions of euros to Dutch and British savers who lost money during the Icelandic banking crisis. Consequently, Diario de Noticias reports that the Netherlands is threatening to block Iceland's application for EU membership if it does not reimburse its Dutch savers.

An article in the Economist argues three big obstacles remain in the way of Iceland's EU membership: firstly "the EU's Common Fisheries Policy, which would give other EU members access to Iceland's fish"; secondly Iceland's budget deficit is running at 13% of GDP and finally, Iceland will have to hold a referendum on joining the EU, yet a recent poll shows popular support has dropped from 58% last October to only 38% today.
Economist EUobserver BBC People Daily EurActiv Diario de Noticias Le Point Liberation

Commission demands 'stress-tests' for banks that received state aid;
Lloyds and RBS seek to avoid EU imposed asset sales
The FT reports that the European Commission yesterday laid out new guidelines for banks receiving government support in order to avoid distortions of competition within the sector. Banks that received government support to see them through the economic crisis will have to "stress-test" restructuring plans when they seek approval under EU state-aid rules. EUobserver reports that the Commission's guidelines state that individual banks and their owners must carry their fair share of the restructuring costs. The article notes that banks that receive state aid will also face behavioural restrictions, so that aid is not used to compete with other banks when offering financial products such as cheaper mortgages.

The Times reports that Lloyds Banking Group and Royal Bank of Scotland have submitted plans to Brussels on how to slash the size of their businesses in an attempt to avoid draconian measures, such as enforced asset sales, being imposed by the European Commission. Lloyds is thought to have said it could sell some of its 3,000 branches in the UK.
City AM EUobserver Smart Brief Irish Times Times 20 min El Pais ABC Telegraph Irish Independent EurActiv Daily Mail BBC FT TAZ

In an opinion piece in the Irish Times Richard Pine, Director Emeritus of the Durrell School of Corfu, argues that "The major problem, which the Lisbon Treaty or any other set of windy words is quite incapable of solving, is the fact that Europe hasn't worked out what 'Europe' means, culturally, socially, even spiritually...The new Europe has, literally, gone too far."
Irish Times

The European Commission last week published its annual "Fight Against Fraud" report in which Italy reported the highest amounts, in monetary terms, affected by irregularities in the agriculture category of EU funds - more than €54 million. In 2008, €32 million was declared "irrecoverable" from incorrectly paid agriculture monies.
OE blog

EU contributes €28m to "promote" agricultural products
The EU has contributed €28m, out of a total budget of €62m, to "promote" agricultural products such as dairy, meat, wine and honey, according to Europa Forum. The 16 programs which will last three years will take the form of public relations and advertising aiming to stress the advantages of local produce, emphasising the superior hygiene, quality, and nutritional value of EU products.
Europa Forum Irish Times

Kerstin Edquist argues in Swedish daily Sydsvenskan that the Swedish EU Presidency, in EU trade negotiations, should not push for demands for patent extensions for medical drugs in the current trade negotiations with Peru, Colombia and Ecuador, arguing that it could lead to a 'health catastrophe' in Latin American countries.
Sydsvenskan

An article in the Economist looks at Czech President Vaclav Klaus and Polish President Lech Kaczynski's reluctance to sign the Lisbon Treaty and argues that "Mr Kaczynski's opposition to Lisbon is about posturing not principle... The real reason for the Polish president's delay is a desire to annoy the government led by Donald Tusk's Civic Platform party."
Economist

The Sun reports that Andrew Symeou was extradited yesterday to Greece under the European Arrest Warrant. Campaign group Fair Trials International called it a "tragedy".
Sun BBC Telegraph OE blog

Diario de Noticias reports that Macedonia could get the 'green light' from the European Commission in the autumn to start EU membership negotiations.
Diario de Noticias

Le Monde reports that young people are the most affected by unemployment in the current recession period. According to Eurostat, during the first quarter of 2009, the number of unemployed 15-24 year olds rose by 18.3% affecting 5 million people.
Le Monde AFP

European Voice reports that the Maud Olofsson, Deputy Prime Minister of Sweden, has said that the EU will decide in December where to base a new agency for energy regulators.
European Voice

UK

The Sun reports that the Conservatives are likely to win in the first post-expenses scandal by-election in Norwich North.
Sun

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