PBR reveals UK contributions to EU are to rise by £1.2 billion next year
The Telegraph reports that the Treasury's Pre-Budget Report shows that Britain's net contributions to the EU are set to rise from £4.8billion in 2009/10 to £6billion in 2010/11, an increase of £1.2 billion. This means that Britain's contributions have doubled in just three years from £3billion in 2008/09.
This is due to a series of cuts in Britain's rebate from the EU budget, of which Tony Blair gave a portion away in 2005 in exchange for the 'health check' on the Common Agricultural Policy, which was intended to produce reforms of the programme, but has failed to provide much. Britain's rebate from the EU is worth £5.6billion in 2008/09, £5.1billion in 2009/10, and £3.3billion in 2010/11. Open Europe Research Director Mats Persson is quoted saying, "The increase in the UK's contribution to the EU budget could hardly come at a worse time. The EU budget represents exceptionally poor value for taxpayers' money - it's wasteful, irrational and hopelessly out of date. British taxpayers have good reason to be angry about their money being spent on wasteful EU projects rather than on closing the budget deficit or lowering taxes at home."
Telegraph Telegraph 2
Times: Barnier rejected British attempts to place well-known City person in his cabinet
Nicolas Sarkozy and Gordon Brown will meet today in what is widely being described as an attempt to brush off a row over the appointment of Michel Barnier as EU Internal Market Commissioner, labelled a British defeat by Sarkozy, and the exclusion of Britain from a simultaneous meeting to discuss the future of the CAP. Sarkozy and Brown will meet at the sidelines of the EU summit to be held today and tomorrow, while 22 European farm ministers will meet in Paris tomorrow to draft a "battle plan" to defend the CAP. PA quotes one British official saying: "So what if a group 22 countries is meeting about the CAP for the 25th time?"
Ahead of the meeting, the two leaders have an article in the Wall Street Journal, arguing "This crisis has made us recognize that we are now in an economy which is no longer national but global, so financial standards must also be global...There is an urgent need for a new compact between global banks and the society they serve." They note, "Therefore, we propose a long-term global compact that will encapsulate both the responsibilities of the banking system and the risk they pose to the economy as a whole. Various proposals have been put forward and deserve examination...among these proposals, we agree that a one-off tax in relation to bonuses should be considered a priority, due to the fact that bonuses for 2009 have arisen partly because of government support for the banking system."
Meanwhile, the Times reports that the UK tried to get a well-known City figure placed in Michel Barnier's Cabinet and pushed for someone from the Financial Services Authority or the Bank of England. However, Barnier rejected the move, but accepted a Briton, Jonathan Faull - a Commission old-timer - as the equivalent of his permanent secretary.
Times Times: Bremner City AM BBC Guardian WSJ: Sarkozy and Brown EUobserver European Voice Le Monde Mail
Swedish EU Presidency proposes to keep salary increase for EU staff for 2010
The Sun reports that thousands of EU civil servants, some earning £182,000 a year, are set to strike over their demands for an inflation-busting 3.7% pay rise. Up to 38,000 are threatening to walk out on Monday after member states blocked the rise, due to the fact that many civil servants at home are facing pay freezes. El Mundo reports that staff are also planning to strike tomorrow.
Der Standard reports that negotiations on EU pay rises will continue this afternoon, with the Commission saying that even if it wanted to refuse the pay rise, it would not be possible, because of the EU statute regulating staff wages. The Swedish EU Presidency has now submitted a proposal to the Council of Ministers, which encourages the Commission to review the current rules and consider the application of a crisis clause, allowing the Commission to impose a new wage proposal. However, the article reports that this would mean the current salary adjustment for 2010 would be unaffected.
Die Welt reports that the French government is planning to open a discussion about the issue at the EU summit today.
European Voice EUbusiness El Mundo Die Welt Standard
Former EU Commissioner warns of "growing rejection" of single market by France and Germany
European Voice reports that Mario Monti, the former EU Commissioner who has been appointed to advise Commission President José Manuel Barroso on the single market, said that there were signs prior to the economic crisis of "a growing rejection" of the single market and that this was "particularly" true of France and Germany. He told the paper, "We need again to convince countries with a tradition of social market economies of the virtues of the single market...We need to find a way in which the pursuit of market integration is not seen as a hindrance to each member state's ability to pursue social objectives".
European Voice Open Europe research
AIFM Directive rapporteur: Hedge funds did not cause the financial crisis
In an interview with the European Parliament's website, Jean-Paul Gauzes, the rapporteur for the AIFM Directive in the EP, says, "hedge funds didn't cause the crisis, but the nature of the investments and the mode of operation can involve systemic risk. That's why we want to regulate them. It is possible that some will no longer be able to engage in activities that bring a lot of money but are too risky for the whole economy. Otherwise, regulation is not intended to demolish the financial industry or even encourage the industry to relocate away from Europe...we must try to be pragmatic."
EU refuses to assist Greece if it goes bankrupt;
Willem Buiter: "It's five minutes to midnight for Greece"
Amid continuing concern over the economic situation in Greece, following this week's cut in its credit rating, FT Deutschland reports: "Europe refuses to assist Greece in case it goes bankrupt. Instead, governments, central bank chiefs and the European Commission now demand hard spending cuts". The article reports that EU Monetary Affairs Commissioner Joaquin Almunia is now clearly saying that the Commission will only help when there is a "consolidation and reform program."
Eurointelligence reports that the Greek bond spread against German bonds has now reached 250 basis points and cites German Central Bank President Axel Weber saying that there is a risk that Greek bonds might no longer be acceptable collateral at the ECB. It further reports that Greek PM George Papandreou yesterday held an open Cabinet meeting at which he said that the situation threatened Greek sovereignty. Bloomberg quotes former Bank of England official Willem Buiter warning that Greece may be the first EU-15 sovereign debt default since the Second World War, adding "It's five minutes to midnight for Greece".
Meanwhile, the Guardian reports that the ratings agency Standard & Poor's revised its outlook on Spain to negative and warned that the country faced a risk of a debt downgrade in two years if the government did not take tough action.
Economist Edward Hugh comments on the Fistful of Euros blog: "Rather than acting as a stimulus to deep economic reform, Euro membership has rather acted to reward those countries who would get into more and more debt, with ever less sustainable economic models, by supplying them with funding at far cheaper rates of interest than the markets would otherwise make available."
FTD NRC Guardian Bloomberg Bloomberg 2 AFP Le Monde Eurointelligence Levy Economics Institute FFOE Blog: Hugh
Swedish EU Presidency comes into conflict with Commission over regional aid
European Voice reports that the European Commission has been over-ruled by national governments over which countries should receive advance payments of EU regional aid. The Commission had proposed making advance payments to 15 EU states totalling around €3 billion, but it was opposed by some governments for being too broad. Member states' EU ambassadors have instead approved advance payments totaling €775 million for Hungary, Romania, Latvia, Lithuania and Estonia. Sweden's revised proposal needed to attract unanimous backing from the Council because the Commission opposed the amendment.
The proposal for advanced payments was made in response to national governments rejecting a proposal from the Commission in July to temporarily suspend rules requiring governments to co-finance projects supported by the European Social Fund, arguing that it would lead to dubious spending projects, or have little positive impact on the economy.
French Agriculture Minister dismisses report calling for reduction in CAP budget
Le Monde reports that French Agriculture Minister Bruno Le Maire has said that: "Giving up the CAP would be a major risk for Europeans". He said he was concerned by a report by the EU Commission, stating that CAP spending would be expected "to continue to be reduced in the same proportion over the period from 2014 to 2020". He dismissed the report, saying: "it did not have an official status".
Meanwhile, in a letter to the Telegraph Conservative MEP Richard Ashworth argues that, "Clear obstinacy from Paris, a French-controlled agriculture commissioner and new powers bestowed on MEPs in the agriculture committee by the Lisbon Treaty all make sorry reading for those who want to see the CAP dramatically reformed so that it offers better value for taxpayers and farmers alike."
Telegraph: Letters Le Monde
EU committee produces guidelines on harmonising liquidity rules
The WSJ reports that the Committee of European Banking Supervisors, which advises the EU, yesterday produced a final set of guidelines for harmonising liquidity risk rules, advising that banks should make sure they have a buffer of liquid assets that would allow them to meet their payment obligations for at least a month during a period of financial turmoil without changing their business models. The body said it expects regulators in the EU to make sure the banks they supervise are meeting the requirements by June 30.
More climate change confusion?
The IHT notes that "embarrassingly for the European Union, which claims to be in the vanguard of environmental issues, its leaders are still figuring out their game plan for the United Nations climate summit." Discussion is still focussed on the creation of a fund to support developing countries reduce carbon emissions from 2010-2012. The European Commission has called on member states to spend up to €2 billion, each year, collectively from 2010 to 2012. However, in light of the present economic difficulties, Germany, Poland and Italy are opposing such commitments to funds.
International Herald Tribune El País AFP EUobserver BBC Times
The Mail reports that Agas are going out, following an EU fuel directive requiring a lower sulphur content in the oil used to fire them. The lower sulphur fuel carbonises more quickly when burned at a high heat, which creates a thick black coke that clogs the fuel supply line to the burners, causing them to go out.
Mail Open Europe research
A press release from the European police force Europol states that the VAT fraud afflicting the EU's Emissions Trading Scheme in the past 18 months, has resulted in the loss of approximately €5 billion euros for several national tax revenues. It is estimated that in some countries, up to 90% of the whole market volume was caused by fraudulent activities.
The Coulisses de Bruxelles blog reports that Sylvie Goulard, President of the EU-funded European Movement in France has won the €10,000 European Book Prize 2009, for her book, "Europe for idiots" (L'Europe pour les Nuls). Partners involved in the Prize include Notre Europe, an EU-funded outfit which campaigns in favour of EU integration whose slogan is "Thinking a United Europe." The blog notes that the panel awarding the prize were "sensitive to the fact that this book is a real act of faith in favour of European integration."
European Book Prize Coulisses de Bruxelles
The Telegraph reports that the Neapolitan pizza has been awarded "traditional speciality guaranteed" status, meaning pizza restaurants from New York to Nice will be forced to conform to a strict list of ingredients and a specific method of cooking if they want to give their food the Neopolitan label.
Telegraph Guardian ABC Europa Press
The FT Brussels blog argues that, "If other EU leaders are to support Cameron against the anti-EU elements in his party and country, it will be up to him to offer something in return", adding: "Accepting that the EU's Lisbon treaty is here to stay, as he did last month, is nothing like enough."
FT: Brussels blog
In an interview with Spanish daily El Mundo Valdis Dombrovskis, Prime Minister of Latvia, notes that Latvia's entry into the euro has been postponed and may be reviewed in January 2014. Mr Dombrovskis notes that this will be subject to fulfilling the requirements of the Maastrict criteria which he describes as "strange" and "designed in such a way that many countries that are members do not fulfil them."
The Telegraph reports that Serbia will apply to join the European Union in the New Year following a series of breakthroughs including approval of a free-trade agreement and visa free access for its people to travel to western Europe. However, EU foreign ministers said that Serbia should not rush its application, with Swedish Foreign Minister Carl Bildt saying: "We should take one step at a time."
Telegraph Irish Independent European Voice Der Standard
EUobserver reports that, following a breakdown in talks over fishing quotas between Norway and the EU, the two sides have ended up kicking each other out of their respective fishing waters.
EUobserver Europa Press
De Tijd quotes European Development Commissioner Karel De Gucht saying he wants to raise taxes in Europe on the profits multinational companies make in the third world, which are exempt from taxes due to the use of tax paradises, adding that tax evasion is "a real problem for development".
In an editorial entitled "European Holocaust", Macedonian daily Nova Makedonia questions the value of the country joining the EU while the Union has no principles. It writes: "Is there any prestige left in this membership? What is prestigious in a Union where the dialogue is replaced with diktat?"
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