Monday, December 21, 2009

Open Europe press summary: 21 December 2009


New Open Europe research shows EU 'Top 100' laws to cost UK £18 billion in 2010

Open Europe today publishes new research which shows that the top 100 most costly EU regulations introduced since 1998 will cost the UK £18 billion in 2010 alone. Over the next decade, they will cost £184 billion in total. The news was reported in the Sunday Times and in the News of the World.

The most expensive law is the Working Time Directive, passed in 1998, costing £3.5 billion annually. The law has been widely criticised for imposing expensive rules on working hours, rest periods, pay and holiday entitlements, and a Government-funded report published last month also partly blamed the regulation for an increase in hospital deaths by breaking the continuity in NHS patients' care and cutting the time available for training some operating theatre staff. Other expensive legislation includes the noise at work regulations, seen as excessively intrusive, particularly for restricting the work of noisy orchestras. Its cost is forecast to hit £586m.

Open Europe's Mats Persson was quoted in the Sunday Times saying, "Far too many [EU laws] are overly prescriptive and unnecessarily burdensome for business, the public sector and individuals. Seventy-two per cent of the cost of regulation in this country stems from EU laws. An incoming government must take a radical new approach to EU over-regulation and must be much tougher and smarter when negotiating in Europe."

Sunday Times Open Europe press release Top 100 most expensive EU regulations

Bundesbank board member criticises EU plans for financial supervision
The FTDeutschland reports that the Bundesbank has criticised the proposals agreed by Europe's finance ministers for the future structure of EU financial supervision. In an interview with the newspaper, a member of its Executive Board, Hans Georg Fabritius said that the competences of the proposed new supervisory authorities are too wide ranging, with the paper noting that their decisions will be binding on member states. Fabritius said he had hoped that the "powers and responsibilities of member state authorities had been more clearly defined."

FTD Euractiv Open Europe press release

Top insurance group considers relocation amid threat of EU rules which could cut pension savings by 20%

The Sunday Telegraph reported that FTSE-100 group Legal & General (L&G) is considering a move outside of Europe ahead of the introduction of the EU's Solvency II rules, which will govern insurers based in the EU from 2012. They say the decision will not be driven by the UK Government's tax regime, which has led to many insurers including Brit and Hiscox to redomicile to locations such as Holland and Bermuda.

Under the Solvency II proposals, annuity providers like L&G would be hardest hit as they would need to match liabilities to bond yields. They fear this will increase the volatility of their balance sheets and force them to raise capital levels. Tim Breedon, the insurer's Chief Executive, has said the regulation would represent a "betrayal of savers", if it was introduced in its present form. He said that the value of UK pension savings could be cut by up to 20 percent as companies passed on the costs to pensioners in the form of lower incomes.

In a letter to Alistair Darling earlier this year, the Association of British Insurers (ABI) added that the "extreme" EU plans could raise the capital and reserve requirements of British insurers by between £30bn and £70bn, leading to rights issues across the sector. The ABI yesterday pledged to work with the EU to ensure its members don't leave Europe. It said the Directive "must be changed to a form that is right for the UK insurance market, to ensure it doesn't get to that stage".

Sunday Telegraph Telegraph

Pieter Cleppe: The lack of a credible opposition in the European Parliament leaves its new powers under Lisbon unchecked

Open Europe's Pieter Cleppe was interviewed by Deutsche Welle Radio on how the European Parliament has already become more assertive given the growth of its powers under the Lisbon Treaty. He argued "it's not just a disgrace that the Lisbon Treaty has been passed, but also the undemocratic way this has occurred is unacceptable". He added: "Looking at European referendums we can see that there is significant opposition to more powers for the EU in Europe. The fact that this is not sufficiently mirrored in the composition of the European Parliament shows that this institution is not democratic enough, a point made by the German Constitutional Court in its verdict on the Lisbon Treaty last June".

No link

Member states offer striking EU officials 1.85 percent pay rise

Die Welt reports that EU member states have suggested a 1.85% pay increase for EU officials, as opposed to the 3.7% rise they were expecting to get. De Morgen notes that the European Commission has reserved its right to appeal against the decision at the European Court of Justice, although its judges would also benefit from the rise. FAZ notes that the pay rise would be backdated to 1 July of this year.

Frankfurter Allgemeine Zeitung De Morgen DPA FAZ

Spain vows to take backstage role with EU Presidency

Euractiv reports that Spain has vowed to take a backstage role during its stint as holder of the six-month rotating EU Presidency, promising to defer to Herman Van Rompuy, the EU's first permanent President, and Catherine Ashton, the new Foreign Minister. Spanish Foreign Minister Miguel Angel Moratinos said, "I would like to state it very clearly. The engagement of the Prime minister of Spain and of the entire Spanish government is that we have new European representatives who will lead, give momentum and will steer [the Union] through the first semester of 2010."

Euractiv Open Europe research

Czech daily Lidove Noviny quotes Open Europe's Lorraine Mullally in an article looking at the 18 'phantom MEPs' appointed under the Lisbon Treaty, expected to cost taxpayers £6 million a year despite being unable to take up full duties for four years.

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The Weekend FT reported that, in anticipation of the EU's Alternative Investment Fund Managers Directive, the Irish government has passed legislation to make it easier for hedge funds based in the Cayman Islands and other tax havens to move to Dublin.

Weekend FT Open Europe research

Belgian daily Gazet van Antwerpen reports that Alexander Weis, Director of the European Defence Agency, has declared in the European Parliament that he hopes that pilot projects with unmanned airplanes, known as "drones", will be possible in EU airspace by 2012.


Belgian daily Het Nieuwsblad reports that Dutch MEP Wim Van de Camp has pleaded for a warning notice on champagne corks, claiming that flying corks cause "a scary amount" of accidents. A wine specialist is quoted calling the proposal "ridiculous".

The People reported that the EU could rule next year's General Election illegal if prisoners are denied the right to vote. In 2005 the European Court of Human Rights said the UK's 63,000 prisoners must get postal votes, and according to the paper, the European Council now wants Britain to comply. Former Chief Prisons Inspector Lord Ramsbotham was quoted saying, "The whole election could be declared illegal."

The People

The Irish Independent reports that analysts at Goldman Sachs have urged the ECB to revise its collateral rules so that it can continue to accept Greek government bonds as collateral, despite a sovereign downgrade to BBB-plus.

Irish Independent Die Zeit

The Times reports that Europe's biggest banks may have to raise as much as £400 billion over the next two years to meet new capital requirements regulations under the Basel rules. Baroness Vadera, the former minister who was a key architect of Britain's bank bailouts, warned recently that some of the biggest financial institutions in Europe have yet to "come clean" on their losses.


The FT reports that Serbia will apply to join the EU tomorrow, hoping that improving relations with the bloc will open a fast track for its candidacy by the end of 2010.

FT Die Zeit


Copenhagen conference ends without deal on emissions targets;

Brown calls for "global policeman" to monitor individual countries' commitments

There was wide coverage on Sunday of the Copenhagen climate deal, which was widely criticised for failing to agree commitment for emissions reductions. According to most reports, China proved the biggest obstacle to a deal, after resisting US pressure to submit to a regime of international monitoring. The Observer reported that there were division even among EU countries.

In the Sunday Times, Dominic Lawson argued that "If India, China, America, Brazil (and Uncle Tom Cobley and all) carry on with 'business as usual', then anything Europe does to cut its emissions is irrelevant, at best: it will cause pain and hardship for its own citizens to no purpose whatever." He said: "Carbon cap and trade, recommended by the EU as an alternative to tax, has its own malign effect. Just ask the 1,700 employees being made redundant at Corus's steel plant in Redcar. The owners of Corus could receive up to $375m (£230m) in carbon credits for laying off those British workers. Then, if they switch production to a so-called clean Indian steel plant, Corus could also receive millions of dollars annually from the United Nations' Clean Development Mechanism fund. The net effect of all that on the environment could be safely estimated as zero."

The Guardian reports that the Climate Secretary, Ed Miliband, has today accused China, Sudan, Bolivia and other Latin American countries of trying to hijack the UN climate summit and "hold the world to ransom" to prevent a deal being reached. In the paper Miliband writes, "We did not get an agreement on 50% reductions in global emissions by 2050 or on 80% reductions by developed countries. Both were vetoed by China, despite the support of a coalition of developed and the vast majority of developing countries." He adds, "We cannot again allow negotiations on real points of substance to be hijacked in this way. We will need to have major reform of the UN body overseeing the negotiations and of the way the negotiations are conducted."

Meanwhile, the Telegraph reports that Gordon Brown has called for the creation of 'global policeman' to monitor individual countries compliance with any future emissions reduction targets, with the EU taking the lead. He said, "I will work with President Sarkozy for a European organisation that will monitor the transparency that is being achieved not just in Europe and our own countries, but in every country around the world."

The Times notes that Mr Miliband rejected claims that Britain and the EU were "sidelined" in Copenhagen by their absence from a meeting at which President Obama and the leaders of China, India, Brazil and South Africa concluded the basic shape of the accord. "I don't think that was the meeting that in the end decided the agreement," he said. "The big decisions took place in a group of about 30 countries in which President Sarkozy, Chancellor Merkel and Gordon Brown were represented."

The Mirror reports that, despite the Copenhagen disappointment, Brown plans to push the EU to up its emissions reduction target from 20 percent to 30 percent.

Meanwhile, the FT reports that global energy businesses are "disappointed and confused by the climate deal agreed in Copenhagen, saying it does not provide enough certainty to justify the huge investments needed to cut carbon emissions."

The Times notes that London's position as the dominant world financial centre for the £75 billion carbon market could be lost to New York with EU's emissions trading scheme being dwarfed by the proposed US cap-and-trade scheme.

Observer Sunday Times Times Guardian Guardian 2 Guardian 3 Telegraph Guardian 4 Guardian: Miliband FT: Analysis FT: Leader European Parliament press release Euractiv Guardian: Leader Guardian Irish Independent Telegraph 2 Times 2 FT Mirror Mail: Laidlaw Times 3


An IPSOS-Mori poll for the Observer showed that the Conservatives are ahead of Labour by 17%, while a You Gov poll for The People found they had a 12% lead.

Observer The People

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: or call us on 0207 197 2333.

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