Open Europe press summary: 18 December 2009

Europe

Spanish government pledges to turn EU into "a factory of rights" during 2010 EU Presidency
Open Europe has today published a new briefing, entitled "The EU in 2010 - what to expect from the Spanish EU Presidency". From 1 January 2010, Spain takes over the six-month rotating presidency of the EU, currently held by Sweden.  The new Lisbon Treaty rules mean that the country holding the Presidency is stripped of its power to 'represent' the EU because of the appointment of a permanent EU President and Foreign Minister.  However, Spanish ministers will chair most meetings of the Council of Ministers, and as the first in the next 'trio' of presidencies, Spain gets to lay out an agenda for the EU for the first six months of the year. 

The briefing outlines the main priorities for the Spanish EU Presidency, and takes a look ahead to key events and developments in the EU in 2010. The main priorities include new social legislation to bolster 'European citizenship', including turning the EU into a "factory of rights"; "Common economic governance", including the creation of controversial new EU financial supervisory authorities and new rules for managers of alternative investment funds; Speedy establishment of the new EU Foreign Service - hoped to become "the biggest diplomatic service in the world"; and efforts to turn the controversial 'Stockholm Programme' into concrete justice and home affairs legislation.
Open Europe press release Open Europe briefing

EU's 2010 budget set to rise 6% to €122.9 billion;
Agriculture spending creeping up
EUobserver reports that the European Parliament yesterday approved the EU's 2010 budget, which at €122.9 billion (£110bn) is a six percent increase on the 2009 budget. Almost half of the budget, 47% or €58bn, will be spent on agriculture and rural development, with €36bn set for regional funding. El Mundo reports that the highest increase is reserved for terrorism and immigration spending. The budget will include €300 million in emergency support for the dairy industry and €75 million in funding to help decommission the Kozloduy nuclear power plant in Bulgaria.

One area of budget expenditure yet to be fixed relates to the EU's new diplomatic service, known as the European External Action Service (EEAS). Funding for the 5,000-strong diplomatic force is likely to be set by the EU Foreign Minister Catherine Ashton, together with MEPs next March or April.

The BBC notes that the UK's net contribution to the EU budget will rise by almost 60% to €7.2bn next year, because of the cut in the annual rebate to the UK, as agreed by Tony Blair in 2005.
EUobserver BBC Independent El Mundo DPA

Eurojust President resigns amidst corruption scandal
José Luís Lopes da Mota, President of the EU's anti-crime agency Eurojust, resigned on Wednesday after an EU corruption inquiry officially suspended him from duty. José Luís Lopes da Mota, who has been President of Eurojust for the past two years, has been under investigation since May regarding the construction of an outlet shopping mall on protected land near to Lisbon.

The inquiry is also examining alleged corruption links to Portguese Prime Minister José Sócrates. Euractiv reports: "According to the accusations, which have not been confirmed so far, Sócrates was bribed to change the status of an environmentally-protected area into a building zone", and continues: "In March 2009, Portuguese public prosecutors claimed to have been pressured by Lopes de Mota to kill off the case and archive it. This version of events was strongly dismissed by the former Eurojust president and by the Portuguese government." 

EUobserver quotes Eurojust's spokesman Johannes Thuy saying that "Eurojust will not suffer any image damage because this was a 'national matter' which did not involve the EU agency as such". A new President is expected to be appointed next year.
EUobserver EurActiv El Mundo Jornal de Notícias

Charlemagne: Senior people in Brussels are saying EU ministers "should have read the Lisbon Treaty before they signed it"
The Economist's Charlemagne column looks at the power struggle between the EU institutions over changes under the Lisbon Treaty to the EU's foreign policy, and argues that, "national diplomats say they were alarmed when Lady Ashton chose to retain her commissioner's office at the Berlaymont, and to build her new private office around her former trade team: sending a signal, it is widely felt, that she sees herself as a commissioner first and foremost."

The Charlemagne blog notes, "More than once, I heard the same despairing phrase, said of EU foreign ministers and heads of government: 'the problem is, they signed the treaty without reading it', or 'they should have read the treaty, and worked out the consequences'...most European governments will have tried to work out if the Lisbon Treaty contained things that should worry them. But there is something to the jibes though...the shorthand for that process is the phrase that several senior people used this week, when talking to me: 'they should have read the treaty before they signed it.'"
Economist: Charlemagne notebook BBC: Hewitt blog Economist: Charlemagne OE blog

Commons Home Affairs Committee warns immigration programme may not comply with EU law
The House of Commons Home Affairs Committee has suggested putting the Government's e-border proposal on hold, because it may not be compatible with EU free movement rules and data protection standards, reports Bloomberg. The proposal is to collect flight passengers' details before the flight and check them against a list of known terrorists, criminals and immigration offenders.  £1.2bn has already been spent on the project, but if it is incompatible with EU law, it is likely the judges will disapply it to EU citizens.

Bloomberg quotes an email from Committee Chairman Keith Vaz saying: "It is shocking that money has already been spent on a program which could never be implemented." Labour Immigration Minister Phil Woolas has said that the programme is fully compliant with EU law and has been confirmed by the European Commission.
Bloomberg Express Mail Guardian

ECB to get new €1bn HQ in Frankfurt
City AM reports that the European Central Bank yesterday gave itself the go-ahead to build a new €1bn, 48-storey HQ, giving it a permanent home for the first time in Frankfurt's east end.
City AM

French, German and UK bodies unite to call for revisions of AIFM Directive
City AM reports that representative bodies from the City of London Corporation, Paris Europlace and Frankfurt based BVI (Bundesverband Investment und Asset Management), yesterday said that the EU Commission's proposed Alternative Investment Fund Managers Directive required significant revision, so as not to damage European pension funds, financial services and professional investors. They claimed the Directive will curtail alternative investment, despite asset managers needing to operate in a global setting to remain competitive. Arnaud de Bresson, Managing Director of Paris Europlace, said Europe has already learned from the mistakes of the financial crisis to create a "safe and competitive financial industry".

Meanwhile, the Economist notes that Swiss funds are worried that the Directive may make it harder for them to do business in the EU and quotes Matthäus Den Otter of the Swiss Funds Association saying: "In the worst case Swiss asset managers could be forced to relocate staff to inside the EU. Everyone in the UK says they will go to Geneva. We fear the opposite, sometimes."
City AM Open Europe research Economist

MEPs criticise Commission for failing to increase public access to EU documents
MEPs yesterday criticised the European Commission for not modifying its latest legislation on public access to documents, to reflect requests made by the European Parliament in March. MEPs want the regulation to be updated to reflect the ECJ ruling of 1 July 2008, the 'Turco' case, which called on the Council to give access to documents, such as its Legal Service's Opinions, which were previously excluded on the grounds of the need to "protect" the institution's decision-making process.

Following the implementation of the Lisbon Treaty, MEPs also want the scope of the regulation to be widened to cover all EU bodies, offices and agencies, including the European Central Bank, the European Court of Justice, Europol and Eurojust, and documents including Council documents: positions and votes cast, and documents relating to international agreements, protection of personal data and the content of institutions' registers.
Europarl

Developing countries warn Commission over EU rules for biofuels
A group of developing countries has sent a warning to EU Energy Commissioner Andris Piebalgs saying that planned EU rules for calculating the indirect land-use changes, for example greenhouse gas emissions, caused by biofuel production would not be legitimate without an internationally-accepted methodology.

The Commission is preparing a report detailing how indirect land-use change is caused by biofuel production and whether it needs to be tackled. The countries said the issue should be addressed in an international framework, and asked the Commission for access to the economic models that it is considering as a means of quantifying emissions resulting from such changes.
EurActiv  

Under pressure Greek government attacks rating agency's downgrade;
Fears grow over Spanish finances
The FT reports that Greece has attacked credit rating agency Standard & Poor's for failing to "assess correctly" new moves by Athens to tackle its budget deficit, following a downgrade by the rating agency of the nation's long-term sovereign debt. The article notes that a march to parliament yesterday by private sector workers marked the first large-scale protest against the Socialist government. The Guardian reports that "with Greece set to become the eurozone's most indebted member next year, the effect of the downgrade was immediate: today, the risk premium on 10-year government bonds over benchmark German bunds hit its highest level since April."

In the Irish Times Arthur Beesley looks at the possibility of an EU bailout of Greece and notes that "at present, according to well-versed sources in Brussels, the balance of the argument lies in favour of co-ordinated action between the EU and the IMF should the evil day arrive. While the precise form of such possible action remains obscure, the overriding sense is that EU leaders would feel obliged to help a member of 'the family'".

Meanwhile, the Telegraph reports that Moody's has downgraded €112 billion of Spanish mortgage debt and has slashed the ratings of Catalunia and a raft of regions with ballooning state deficits, with Spanish media calling the move an "axe blow".

A leader in German weekly Die Zeit carries the headline "the euro begins to unravel".
FT Guardian City AM Irish Times Economist Telegraph WSJ WSJ: Analysis Zeit

Il Corriere della Sera notes that, from tomorrow, visitors from Serbia, Montenegro and Macedonia will be able to travel visa-free to the EU.
Corriere della Sera

EUobserver reports that Europe's 1,000 major cities have called on EU Commission President Jose Manuel Barroso to involve them more directly in the bloc's regional policy.
EUobserver

Brussels expat magazine The Bulletin has named Czech President Vaclav Klaus as "personality of the year 2009". According to Elsevier, it writes that "through his hard resistance against the Lisbon Treaty, which profoundly changes European decision making, Klaus has taught the big member states a lesson."
Elsevier Prague Daily Monitor The Bulletin subscription page

World

UK officials suggest EU may up emissions reduction targets from 20% to 30% as US backs $100bn climate fund
The Times reports that a global deal to address climate change is likely to be agreed in Copenhagen today but the commitments it contains on cutting greenhouse gases will fall short of the minimum target set by the UN's science body. The Guardian and the Telegraph report that a leaked UN document shows that the deal currently being proposed would lead to a 3 degrees Celsius rise in global temperatures rather than the stated aim of limiting the rise to 2C. A rise of 3C would mean up to 170 million more people suffering severe coastal floods and 550 million more at risk of hunger, according to the Stern economic review of climate change for the UK Government.

According to the Times, Ed Miliband, the Energy and Climate Change Secretary, admitted there was still a "gap between the politics and the science" but suggested that the shortfall would eventually be made up by making faster cuts in emissions between 2020 and 2050. "There are different pathways to 2C," he said. "I think countries have moved a very, very long way."

The Irish Times reports that French President Nicolas Sarkozy "appeared to dissent from the European Union position on a global climate change agreement yesterday when he said he favoured retention of the Kyoto Protocol after 2012." The EU's position has been that there is a need for a new agreement to replace or supersede the Kyoto Protocol on the basis that it does not cover all developed countries, the US in particular, and makes no demands for emissions cuts from any developing nations, including China and India. Sarkozy is quoted saying, "If we keep on heading where we're going we are heading for failure," adding, "So people want to keep Kyoto; OK let's keep Kyoto. But let us agree on an overall political umbrella."

The second issue requiring agreement in Copenhagen is a deal to finance measures to combat climate change in developing countries. The WSJ reports that the US has launched an eleventh-hour attempt to pull off a deal by offering to get behind efforts to raise an international $100 billion a year fund to aid developing countries by 2020. However, Secretary of State Hillary Clinton said the US wouldn't commit to the plan if all major economies don't commit to key provisions, including carbon-emission controls that are transparent. In terms of international monitoring of emissions, He Yafei, China's Vice Minister of Foreign Affairs, said yesterday that China is ready for international cooperation that is "not intrusive, that does not infringe on China's sovereignty." President Obama and Wen Jiabao, the Chinese premier, are due to join the talks this morning to try to hammer out an agreement.

The Guardian reports that British officials said last night that the US move puts the onus on the European Union to decide whether to make good on its promise to raise its emissions reductions target to 30% from 20% by 2020 in the event of strong action at the summit. A source close to the EU delegation said it was possible that the EU target would be raised, according to the Times.

Mr Miliband admitted that any financing deal was unlikely to contain specific financial commitments from each country to the long-term climate fund. "2020 is a long way off and there is a lot of work to be done on precise amounts from different sources." The Mail reports that Gordon Brown yesterday pledged an extra £6 billion to the international climate fund in an attempt to persuade developing countries to accept emissions reductions.
Times Times 2 FT FT 2 Guardian Guardian 2 Guardian 3 Guardian: Leader Guardian: Letters IHT Telegraph Telegraph 2 Irish Times EUobserver BBC European Voice Irish Times WSJ Irish Independent Sandbag: Blog Mail

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