Open Europe press summary: 1 September 2009

Europe

EU to shelve budget review promised to the UK
The Sunday Telegraph reported that EU officials are preparing to shelve a review of all the EU's spending, which was promised to Tony Blair in 2005 in return for a cut in the UK's budget rebate. As a result of the rebate cut, Britain's net contribution to the EU is to rise from £4.1 billion this year to an estimated £6.9 billion in 2011.

Mr Blair and Gordon Brown, who was Chancellor at the time, had hoped that the review "covering all aspects of EU spending, including the CAP [Common Agricultural Policy]" would lead to promises of reductions in farm spending, providing political justification for cutting the UK's rebate.

However, a source inside the European Commission said that officials are wary of triggering a heated debate between Britain and France over the CAP just when Europe's leaders must agree on appointing a new European Commission, the EU's first "foreign minister" and its first permanent president - all required under the Lisbon Treaty if it comes into effect from next year.

Shadow Europe Minister Mark Francois said that the Government's "main justification for giving up billions of our rebate was that the whole EU budget, including the CAP, would be reviewed. If this review is dropped it would be further proof of this Labour Government's incompetence in defending Britain's interests in Europe."

Open Europe's Lorraine Mullally appeared on Andrew Pierce's show on LBC radio on Sunday to discuss the EU budget and Britain's increasing contributions.
Telegraph Telegraph: Letters Open Europe blog

Ireland: 37% of people still undecided on Lisbon Treaty
Yesterday's Irish Times reported on a new poll commissioned by pro-Lisbon group We Belong, which showed that 37 percent of people are undecided about the Lisbon Treaty, 36 percent said they would vote 'yes', and 23 percent said they would vote 'no'. It also reported that one of Ireland's largest trade unions Unite, is to call on its 60,000 members to vote No. EUobserver quotes the Union's Irish Regional Secretary Jimmy Kelly describing the declaration offered to Ireland by the EU on workers' rights as "worthless".

Saturday's Irish Times featured an email exchange between former European Parliament President Pat Cox and Joe Higgins MEP. Cox argued that "EU membership has been the best partnership this small State has ever had", and described the Lisbon Treaty as an "acceptable consensus" for the EU's member states. Higgins responded saying, "Eulogies to how 'good' the EU has been for Ireland should not distract from the kind of Europe which the Lisbon Treaty would create in the decades ahead which after all is what we are voting on."

On her Mail blog, Mary Ellen Synon looks at the interventions by Michael O'Leary, Chief Executive of Ryanair, and Jim O'Hara, Chief Executive of Intel in Ireland, in the Lisbon debate, arguing, "So far the only business leaders who have agreed to pay big money towards the Lisbon Yes campaign are men who clearly have a vested interest in sucking up to the European Commission."

She notes that "Intel is a global corporation which is now appealing a €1.06 billion (£935m) fine imposed in May by the European Commission for anti-competitive practices. The money is frozen in a blocked bank account, pending an appeal by the company in the European Court of First Instance. The executives at Intel won't ever touch any of that billion-plus again unless their appeal succeeds - or unless they can negotiate a lower fine with the Commission." She continues: "Ryanair has even more than that at stake, though. When the former state-owned Irish airline, Aer Lingus, was sold off, Ryanair bought a shareholding of nearly 30 percent. The present chairman of Aer Lingus has raged against this as 'grossly uncompetitive' and 'damaging' to Aer Lingus. The airline is in the European courts at the moment trying to force Ryanair off its shareholder register." She notes: "the routes and pricing for O'Leary's airline are at the mercy of the unelected, unsackable eurocrats in Brussels."

On his Telegraph blog, Conservative MEP Dan Hannan hat-tips Open Europe in a piece about the number of the EU's supporters who have a financial stake in it, including Pat Cox, who is head of the pro-Lisbon 'Ireland for Europe' campaign. The Irish Times reports that EU Consumer Affairs Commissioner Meglena Kuneva has defended the appointment of Pat Cox as her Special Adviser, after suggestions his corporate activities could lead to a conflict of interest.

Monday's Irish Independent reported that Declan Ganley has said that a return to the Lisbon Treaty campaign would be a "waste of time".

Writing on the Spectator's Coffee House blog, Daniel Korski looks at the Conservatives' position on the Lisbon Treaty and asks, "if the treaty is ratified [when they are elected] will they try to re-open the document if they win power or let sleeping dogs lie?" He says: "With the Lisbon Treaty moving closer, the Conservatives may have to be clearer about their strategy - and risk alienating key constituencies either domestically or internationally."
Irish Times OE blog Irish Times: Letters Mail: Synon blog Telegraph: Hannan blog EUobserver Irish Independent Irish Times 2 Spectator: Coffee House blog RTE Irish Times 3 Irish Times 4 Irish Times 5 Irish Times: Harbor steuinerse

McCreevy to receive €400,000 payoff
The Sunday Times reported that Ireland's retiring EU Commissioner, Charlie McCreevy, will receive a €400,000 payoff from the EU in addition to a pension of €127,000 despite Ireland having to endure 'the fallout from his policy blunders', including 'rampant public spending' and 'unsustainable income-tax cuts'.

Meanwhile, ABCNyheter cites Open Europe's findings that EU Commissioners retiring this year will each leave with over £1 million in pension, transition and resettlement payments.
ABCNyheter Open Europe research Sunday Times

Merkel's CDU suffers major losses in two state elections
Der Spiegel reports that German Chancellor Angela Merkel's Christian Democrats suffered major losses in two state elections in Germany on Sunday, in the run-up to the national elections on 27 September.
Independent Spiegel

US in Brussels to discuss hedge fund directive
The Guardian reports that a delegation of American congressmen is flying into Brussels this week to discuss a growing tension between the US and Europe over hedge funds.

Meanwhile, FIN alternatives reports that Sweden's Financial Markets Minister, Mats Odell has expressed confidence that a deal on the EU hedge fund proposal can be reached by the end of the year, saying "we are making progress on the proposal".
FINalternatives Evening Standard Guardian

UK facing blackouts within eight years;
EU directive and closure of nuclear plants will see energy capacity cut by 37%
The Mail notes that the decommissioning of power stations will see 37 percent of the UK's generation capacity disappear by 2015. The expected power gap of 3,000 megawatt hours a year could mean an hour-long power cut for 16 million people simultaneously on a winter evening. Renewable energy sources, in particular wind farms, are unlikely to meet the gap left.

The Telegraph reports that Government projections have revealed that the UK is facing the prospect of energy blackouts within the next eight years. The article notes that the looming problem in Britain is caused by the scheduled closure by 2015 of nine oil and coal-fired power plants required by the Large Combustion Plant Directive. The Directive was originally designed to limit pollution and associated acid rain. In addition, a leader article in the paper notes that four existing nuclear power plants are set to be shut and "only now, after 12 years, is the Government finally getting round to ordering replacements, and they will not be operational for more than a decade."
Mail Telegraph Telegraph: Leader

Lloyds keen to sell £4bn HBOS portfolio before European Commission orders disposals
The Telegraph reports that Lloyds Banking Group is keen to speed up the sale of HBOS's finance arm, expected to be valued at less than £4 billion, before it is forced to by the European Commission, which has said that 'significant' disposals could be required in order to approve the merger between the two.
Telegraph

Businesses face VAT penalties after exposure of carbon credit fraud
The Times reports that firms could face legal fees and penalties totalling millions of pounds after a scam involving VAT fraud in the trade of carbon credits in the European Emissions Trading Scheme was uncovered. The Government is able to reclaim the VAT on any carbon trade it considers suspicious, in addition to imposing a penalty of 100 percent of the VAT avoided; it is suspected the cost of the scam could far exceed HM Revenues and Customs' current estimate of £38m.
Times

The Irish Independent reports that the European Central Bank has issued a warning to the Irish government, warning them not to pay too much for property loans being bought up for the National Asset Management Agency (NAMA).
Irish Times Irish Times 2 Irish Independent

Sarkozy and Merkel display united front and want Europe to join them
The two leaders announced in a joint press-conference in Berlin on Monday that they would send a letter to the Swedish EU Presidency, proposing a harmonised European position for the G20 summit on 24 and 25 September in Pittsburgh. Sarkozy and Merkel reaffirmed their agreement over regulation of bankers' bonuses and the "excesses of speculation". Le Monde quotes Sarkozy as saying "We want to create change in Pittsburgh as we did in London regarding financial havens." The subject will be discussed by heads of state and government on 17 September in Brussels.

Sarkozy announced in Berlin that "before the end of the year, we will take strong measures which will show the EU has a need for a Franco-German axis" even if other countries don't follow suit and added that "all European states are equal in law, but they are not equal in their responsibilities."

Le Monde reports that in the letter Germany and France also demanded the EU increase its voluntary additional contribution to the IMF by two-thirds to a total of €125 billion. G20 countries already decided in April to increase voluntary contributions to €500 billion.

Meanwhile, in an interview with the FT Gordon Brown pledged to crack down on bankers' bonuses, but was unenthusiastic about French-led pressure for a mandatory cap on bankers' bonuses, warning it would be difficult to enforce even though it was part of a "legitimate debate".

According to the Frankfurter Rundschau, the German government has indicated openness towards the proposal of the British Financial Supervision Authority (FSA) of introducing a special tax aimed at excessive bank profits and bonus payments.
Le Monde Le Monde FAZ Focus Figaro 24 heures Le Monde FT Mail Handelzeitung FAZ Frankfurter Rundschau

British Association of Dermatologists accuses Government of "disregarding" public concerns over light bulb ban
An EU ban on the manufacture and import of 100 watt and frosted incandescent light bulbs comes into force today. The ban will be extended to all incandescent bulbs by 2012. The Sunday Mirror reported that the European Commission has accused firms of falsely claiming energy-saving light bulbs are as bright as traditional incandescent ones.

PA reports that Spectrum, an alliance of charities working with people with light-sensitive health conditions, said the Government was "disregarding" public concerns as the ban came into place. The British Association of Dermatologists (Bad) said it would be a "real worry" if no exceptions were being made for people with medical conditions such as lupus, with some sufferers reporting skin rashes and vomiting from exposure to the new lightbulbs. A Bad spokeswoman said: "What we need, very simply, is for access to remain available to incandescent lamps for people who are sensitive to non-incandescent bulbs."
The Telegraph reports that the Department for the Environment Food and Rural Affairs are so concerned about the extra work involved in policing the phasing out of incandescent light bulbs, flat screen televisions and inefficient fridges from EU directives, it has put out a consultation on setting up a new "market enforcement agency". From mid-2010 all white goods and other electrical goods including televisions will be included in the Energy Labelling Directive, to show energy efficiency.
Sunday Times: Clover Guardian Guardian: Cooke Mail Express Reuters America Latina IHT Mirror AD RP Express Telegraph Telegraph: Leader BBC EU Referendum blog OE research

Mandelson accused of lobbying the EU on behalf of Libya
The Telegraph reports that Lord Mandelson has been accused of secretly lobbying for the interests of Libya at the time of its alleged deal to exchange the Lockerbie bomber for favourable trade deals. Sources in the European Commission have said that nearly a year after Lord Mandelson stepped down as European Trade Commissioner to return to the Cabinet, he has continued to personally push his successor, Baroness Ashton, for a new and quick EU trade deal with Libya.
Telegraph

Romania to lobby for agriculture commissioner
Euractiv reports that Romania will propose Dacian Ciolos, a former agriculture minister, as its next Commissioner, despite continuing uncertainty over how many commissioners will form the next EU Commission owing to the delay in the ratification of the Lisbon Treaty. Cristian Diaconescu, the Romanian Foreign Minister, acknowledged it would be difficult to obtain the agriculture portfolio, but said that Romania would mobilise all of its resources in an effort to secure it.
EurActiv

Wallstrom: EU needs a commissioner for citizens
EUObserver reports that EU Communication Commissioner Margot Wallstrom has said the next Commission President should create a "citizens commissioner". Wallstrom underlined that this new post should have legislative powers, "It's very good if you can also have some legislative files in your portfolio" otherwise you depend on "everyone else doing the right things."
EU Observer

In FAZ, Roland Vaubel, professor for economics at the University of Mannheim warns against a centralisation of the EU.
FAZ

ECB warns of credit derivatives danger
The FT reports that the ECB has warned that counter-party risk remained a big concern among Europe's banks as credit default swaps contracts are increasingly concentrated in the hands of a few large institutions. The top 10 counter-parties of the leading European banks, often other banks, accounted for 60% of CDS exposure. Guy Stear, credit strategist at SG CIB, said: "Counter-party risk is not as bad as it was at the height of the crisis ... but it is still there. We are not out of this financial crisis yet." The ECB also warned that governments could face problems over wider CDS spreads.
FT

EU legislation on credit card overcharging
The Times reports that holiday-makers may be able to claim back the full amount of excessive charges if the final amount was not specified at the point of payment under EU legislation that comes into force this autumn. Under the EU's Payment Services Directive, from November 1, consumers who receive a credit card bill that "exceeds the amount the payer could reasonably have expected in all the circumstances" have eight weeks in which to seek a refund. This would apply, for example, to car hire and hotels.
Times

The Irish Times reports that the Mayor of Donegal County in Ireland Brendan Byrne has criticised the EU Habitats Directive, which is delaying the removal of a landslide until a report on the ecological implications has been carried out, leaving 20 families isolated for nine days. He said that plant life was "of more concern to the bureaucrats in the EU than the humans".
Irish Times

An article in the Irish Times looks at a growing diplomatic row between the Netherlands and Belgium over the port of Antwerp, and plans to deepen the Scheldt river, to increase access for large container ships.
Irish Times

Le Monde reports that despite the criticisms of the OECD and the ECB, Belgium retains its system of automatic indexation of salaries. Jean-Claude Trichet believes this system to be "difficult and unacceptable" saying it could contribute to the "unravelling" of the economic and monetary union of the EU.
Le Monde

Le Monde reports that French Minister of Agriculture, Bruno Le Maire, has shown extreme pessimism concerning the situation of the agriculture sector, saying, "a decent and steady income for agricultures is today colliding with the worst economic crisis in 30 years."
Le Monde

In a meeting between the Slovenian and Turkish Foreign Ministers, the Slovenian Prime Minister, Samuel Zbogar, said that Slovenia is completely backing Turkey's application to the EU.
Le Figaro

Statistics agency Eurostat has shown a decline in prices in the Eurozone in August, a further sign that the downturn might be easing.
IHT Wall Street Journal

EUobserver reports that Zambia and Comoros abruptly refused to sign an Economic Partnership Agreement with the EU on Saturday at the last minute.
EUobserver

Writing in the FT Simon Tilford, Chief Economist of the Centre for European Reform, argues that it is "worrying" that there has been no debate in Germany's election campaign about the country's "extraordinary export dependence."
FT: Tilford

The Irish Independent reports that a series of amendments are to be introduced in Ireland this week, designed to close off a series of loopholes in the European arrest warrant (EAW) legislation. The altered legislation now means that police can arrest a person without a warrant, if there are reasonable grounds to suspect that the person is already wanted on an EAW.
Irish Independent

The Swedish EU Presidency Newsletter reports that the 27 EU Foreign Ministers will meet in Stockholm on 4-5 September and the foreign ministers from the candidate countries will attend the second day of the meeting.
Swedish Presidency Newsletter


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.