Open Europe press summary: 7 August 2009

Europe

German political parties move towards compromise on how to strengthen German Parliament in EU decision making
German media reports that the main political parties in Germany are close to reaching a compromise on how to strengthen the role of the German Parliament in the EU decision making process, as required by the country's Constitutional Court before the Parliament can ratify the Lisbon Treaty. Head of CSU's national committee, Peter Ramsauer, said that a compromise should mean that the German Parliament's voice in EU decisions should be strengthened while at the same time "the government's room for manoeuvre at EU level should be sufficiently guaranteed". Several papers interpret this to mean that the German Parliament will not have a general veto right over EU decisions, as was originally envisioned by the CSU.

However, Ramsauer said that the government would have to provide a justification in case it decides to go against the recommendations by the Parliament. Furthermore, he said that an amendment of the German Constitution is not necessary.

According to press reports, this increases the likelihood of the Lisbon Treaty being ratified before German Parliament elections on 27 September, five days before the Irish referendum.

Meanwhile, in an interview with the Tagesspiegel, former Constitutional Court Judge Dieter Grimm stressed that "if competences move to Brussels, they are lost in the national parliaments. Therefore this must not happen without a debate and decision in the Bundestag. That means more work, but it is worthwhile".

Die Welt reports that the former MEP Franz Ludwig Schenk Graf von Stauffenberg (CSU) has said that he may launch a new complaint against the Lisbon Treaty, "We see each other in Karlsruhe again" if the parliament and Bundesrat (upper chamber) do not sufficiently transpose the requirements of the Court's Lisbon judgment."
Handelsblatt Reuters Frankfurter Rundschau Welt

RBS asked by EU Commission to cut back on lending
The WSJ reports that the EU Commission has asked RBS to cut back on lending to small UK businesses. The Commission says that the lending is violating the EU's state aid rules, as the UK Government owns 70 percent of RBS. The article notes that this puts the Commission at odds with the UK Government's call for banks to ease credit to small companies. RBS Chief Executive Stephen Hester said, "There is a contrast here and it's not a comfortable one. It's our job to support our customers. Anything that disrupts our ability to do that is not good for the UK economy and that is being taken into account in our discussion with the EU".
WSJ Independent

Economist: How long until Britain's energy crisis sets in?
A leader in the Economist looks at the potential for a crisis in Britain's energy supply in the next decade and a separate article in the paper reports that part of the problem in meeting demand is the EU's Large Combustion Plant Directive, imposing tough limits on emissions of sulphur and nitrogen: "To stay within those limits, coal-power stations will have to fit expensive scrubbing equipment. Because the facilities are comparatively old, many owners will not bother. Unscrubbed stations are allowed to operate for only a limited number of hours, and must close in any case by 2015."

The leader argues in favour of a carbon tax, saying that "carbon must be taxed if firms are to invest in long-term, expensive, technology-heavy projects such as nuclear plants, cleaning up coal and taming renewable sources of power. Carbon is already assigned a price through the European cap-and-trade mechanism, but the system is focused on the short term, vulnerable to gaming and plagued by hugely fluctuating prices."

Meanwhile, an article in Business Week, looking at the EU's carbon emissions trading scheme, argues that if the US launches its own cap and trade scheme it must learn from the EU's mistake of handing out too many permits to pollute for free.
Economist: Leader Economist Open Europe research OE blog Business Week Open Europe research Open Europe research 2

In the Independent, David Prosser writes that new European Commission rules coming into force across the EU from 2012, forcing insurers to set aside more capital to cover the potential cost of annuities, will result in savers retiring on 10 to 20 percent less pension income than today.
Independent: Prosser

Charlemagne: regulation is not the answer to falling dairy prices
The Charlemagne column in the Economist looks at the milk producers' protests around Europe and argues that regulation is not the answer. "The protesters are swift to blame the European Union, and what they see as its failure to prop up prices.... Europe's dairymen are so obsessed by the need for regulation that the worst economic slump in more than 70 years barely enters their consciousness." The column concludes, "Governments need to be braver, and tell their protesting farmers: 'Milk is good for you. It helps you to grow strong. So do markets.'"
Economist: Charlemagne

Former Minister reports Swedish government to the country's Constitutional Committee over data transfer deal with US
Leif Pagrotsky, a former Minister has officially reported the Swedish government to the Swedish Riksdag's Constitutional Committee for the government's controversial secrecy in the handling of the negotiations between the EU and the US regarding US access to European bank transfers. Pagrotsky argues that the government discarded the usual democratic procedures to force through the proposal, without giving the Riksdag any information or chance to debate it.
Newsdesk

French Government urges banks to curb excessive bonuses
The FT reports that French Prime Minister François Fillon is demanding that domestic banks that have received state aid honour their "absolute requirement" to rein in excessive bonuses. The controversy was sparked when BNP Paribas announced on Wednesday that they had set aside €1 billion for bonuses, despite having received €5.1bn from the government in return for preference shares. The article notes that both French President Nicolas Sarkozy and Finance Minister Christine Lagarde have called on French banks to limit bonuses. However, Le Monde reports that the Governor of the Bank of France, Christian Noyer, has said that BNP Paribas' allocated bonuses "conform to the rules".

Meanwhile, Les Echos reports that French Finance Minister Christine Lagarde has today announced that she would prefer an international response rather than a French law on remuneration and specifically bonuses. Lagarde said "First and foremost it has to be international. It is not worth fixing things inside our borders if, in London, Singapore or New York, the cards are still on the table". In an interview with Le Monde, she emphasised that the G20 in Pittsburgh will focus on addressing international remuneration regulations, which she argues "are key to disciplining the financial system".
FT Les Echos Le Monde Le Monde 2 Le Monde 3

Swedish EU Minister: 40% of the EU budget for agriculture is "not reasonable"
An article in the Independent summarises Swedish EU Affairs Minister Cecilia Malmström's speech in The Hague this week in which she said that one of the keys to helping the EU meet long term challenges was the "modernisation of the European budget. Today, 40 per cent of the budget is earmarked for agricultural subsidies, which is simply not reasonable. If we are serious about meeting the challenges, we must use our resources in the best possible way and adapt the budget to citizens' reality."
Independent: Malmström

US Investment Adviser Association concerned about impact of AIFM Directive
The US Investment Adviser Association (IAA) has called on the European Commission to clarify the Alternative Investment Fund Managers Directive. Compliance Reporter notes that "The IAA is concerned that asset managers in non-European countries will not be able to operate on a level playing field with those inside the EU". It adds that "Industry professionals have warned that U.S. hedge fund firms may be the biggest losers under the directive".
Compliance Reporter

Turkey and Russia strike deal on gas pipeline to rival EU-backed project
EUobserver reports that Turkey and Russia have agreed a deal to allow a Russian gas pipeline through part of the Black Sea, in a move which could hurt the prospects of an EU-backed project, the Nabucco pipeline, to reduce Europe's energy dependency on Russia. Experts warn that if the Russian South Stream pipeline is built the EU will be forced to buy Caspian gas at a much higher price.
FT: Crooks IHT EUobserver El Pais

Georgian and Russian troops on high alert a year on from South Ossetia war
The Guardian reports that Russian and Georgian troops were on high alert today, on the eve of the first anniversary of their war over the disputed South Ossetia region. A report of an EU inquiry into the war that was due to be published at the end of July has been delayed until September.
Guardian Guardian: Leader Guardian: Tisdall Guardian: Saakashvili El Mundo

€15 million emergency rescue plan for French fruit and vegetable producers
Les Echos reports that French Agriculture Minister Bruno Le Maire has announced a €15 million immediate emergency rescue plan for French fruit and vegetable producers. Bruno Dupont, the President of the union FNPFruits, said that the plan was "a first step", indicating that the government needs to do more to assist the French fruit and vegetable industry. The rescue plan comes after the European Commission announced that French fruit and vegetable producers must repay €330 million in CAP subsidies.
Le Figaro Les Echos

In an article for the Guardian, Tariq Ramadan, Professor of Islamic Studies at Oxford University, argues in favour of Turkey's membership of the EU and writes, "It is time for the countries of Europe to overcome their fear of Islam; time for them to stop turning Turkish EU membership into a cultural battleground."
Guardian: Ramadan

In a response to Timothy Garton Ash's article on the Conservatives' ECR grouping in the European Parliament, former British Ambassador to Poland Charles Crawford responds in the Guardian and argues that the Law and Justice Party in Poland have helped to make Polish politics more pro-European.
Guardian: Crawford

EUobserver reports that new guidelines for the Irish media covering the Lisbon Treaty will come into effect today.
EUobserver

German Chancellor Angela Merkel has drawn up draft plans to give the German banking supervisor, Bafin, unprecedented powers over struggling banks, including the capacity to dismiss executives without the agreement of shareholders.
FT

European Voice reports that the European Central Bank has announced that it is keeping its main lending rates at current levels.
Le Figaro European Voice El Mundo Les Echos El Pais El Pais 2


Open Europe is an independent think tank campaigning for radical reform of the EU. For information on our research, events and other activities, please visit our website: openeurope.org.uk or call us on 0207 197 2333.