Wednesday, December 23, 2009

Open Europe press summary: 23 December 2009

Greek debt landing Germany in "a very difficult situation"
The FTDeutschland reports that Moody's has joined the other major ratings agencies in downgrading Greece, although not as severely as markets had expected. Speaking on the BBC Today programme, when asked what the damage to the euro would be if Greece's debt problem led it to leave the eurozone, Times writer Oliver Kamm said: "If you think that the collapse of Lehmann brothers was bad, this would provoke the Godzilla of all banking crises and bond market crises and that's why no government would go there, or let it happen."

Economics Editor Stephanie Flanders said: "It's quite interesting though because in theory there is this 'no bailout' clause for the eurozone which actually the Germans insisted on when the single currency was getting started because they didn't want countries like Greece and Italy always thinking they could come running to Brussels...but there has already been quite a lot of expectation that they would find a way round that clause and I'm sure that's right...Germany in particular is going to face a very difficult situation."

A poll commissioned by Open Europe of German voters in July found that 70% of Germans were against using public money to bail out other countries that had got into financial difficulties following the economic crisis.

A leader in German daily Sueddeutsche Zeitung argues that "the EU should control Greece and cut back subsidies." It adds: "If every EU country has its own currency, it can only weaken itself when making debts. In the case of the euro however, Greek (and other) borrowing potentially weakens all members of the monetary union. The EU should send auditors to Athens to control the state budget sharply. And it should cut back on irregular EU subsidies which make the life of the nation convenient." The article concludes, "In a common currency, Greece's problems don't just matter to Greeks. It is high time that its eurozone neighbours don't watch by any more as the country damages the others."

An article in Die Welt, looking at the potential accession of Serbia to the EU, argues, "Under the protective umbrella of EU membership, economic mismanagement and political corruption go unhindered and unpunished...The richer countries that have managed their economies more responsibly will always bail their desperate little brother out of the mess."

Meanwhile, an article in the FT looks at recession-hit Latvia, noting that the price for an EU and IMF bail-out has "been painful tax increases and brutal spending cuts - including reductions of up to 40 per cent in public sector pay and a 10 per cent cut in pensions."
Today programme Open Europe press release FT FTD BBC Die Welt: Leader

EU informed of global climate deal by text message;
Swedish Environment Minister blasts "great failure" of Copenhagen
Following a meeting of EU environment ministers, Swedish Environment Minister Andreas Carlgren called the agreement reached at the Copenhagen climate change summit last week "a disaster" and "a great failure". He added, "It was obvious that ministers broadly expressed their disappointment with the results of Copenhagen, which didn't at all meet the expectations or ambitions of the European Union".

The FT reports that the EU had believed its role as the first bloc to pass binding emissions reductions targets would give it a prime seat at the negotiating table, but it was not even invited to a final meeting at which leading developed countries struck the decisive deal with the US. BBC Europe Editor Gavin Hewitt's blog notes that Swedish Prime Minister Fredrik Reinfeldt, current holder of the EU Presidency, learnt about the deal via a text message on his mobile phone. Swedish Foreign Minister Carl Bildt said: "We've been taught some lessons about the realities of the so-called multi-polar world. These lessons will have to be taken into account when we go for a more comprehensive global agreement."

The article also reports that several nations blamed the unwieldy United Nations negotiating process for Copenhagen's failure. In a letter to the paper, ALDE group leader in the European Parliament Guy Verhofstadt argues that, "Perhaps the UN could take a leaf out of the European Union book and examine whether its consensus-based decision-making is sustainable for the sake of the planet and its own credibility. The EU has had to constantly adjust its procedures to make decision-making both possible and more efficient...Majority voting is now the norm. Consensus is, of course, always desirable, but sometimes, when push comes to shove, a decision can only be arrived at by a vote."

European Voice reports that the ministers have asked the European Commission to produce a report of 'what went wrong' at Copenhagen to help the EU reflect on its international climate strategy, to be discussed in Seville on 15-17 January.

Die Welt and Handelsblatt report that Belgium and France are pushing for the EU to introduce an additional "green" tax on products imported from places with less stringent environmental regulations, such as China.

Meanwhile, Les Echos reports that "businesses are alarmed" by calls among policymakers to increase the EU's emissions reduction target from 20 percent to 30 percent by 2020.
IHT European Voice Irish Times FT FT: Letters BBC: Hewitt blog Die Welt Echos

Open Europe's research on the 'Top 100' EU regulations, which will cost the UK economy £184 billion between 2010 and 2020, is featured on Mary Ellen Synon's Mail blog and by ICM news.
Mail: Synon blog ICM news OE blog Open Europe press release Open Europe research 

EU civil servants' union: Member states are using pay dispute to deflect from their inability to combat the recession
EUobserver notes that national ministers are set to rubber-stamp a 1.85 percent pay rise for EU civil servants, rejecting a request by the European Commission for a 3.7 percent rise. However, Renzo Carpenito, the Council of Ministers' top delegate to the FFPE trade union, has said that national governments are using the pay dispute in a cynical ploy to improve their image. He said, "Member states can't solve the financial crisis, which is the real problem. The pay dispute is a good dossier to improve their image." He added, "We regret that certain member states have created a media storm out of the issue."

The article notes that the European Commission is still deciding whether to challenge the decision at the European Court of Justice, dragging the dispute into the New Year.

Opinion poll shows Spanish people think their country has little influence in EU
El Mundo reports on an opinion poll conducted by the Centro de Investigaciones Sociológicas, an independent Spanish research body, which examines attitudes within Spain regarding the European Union. The poll found that 70% of people think that Spain has little or no influence in the EU. 70% of people are in favour of the EU, and 71.6% are convinced that EU decisions affect the lives of Spanish citizens. 38.8% think that these effects are positive, and 36.5% think they are negative.

The poll also found that 38.1% of people think that Spain will do well or very well during its EU Presidency, beginning on 1 January, 30.7% think that it will do 'OK', and 14.1% think it will do badly. 57.7% think the Presidency is an important event for Spain, but 51.9% of people had not seen the Spanish EU Presidency reported in the press.

24.4% of people think that the Spanish government defends Spanish interests in Europe well, 37.7% think that the government defends Spanish interests 'OK' and 30.5% think that the government defends Spanish interests badly.
El Mundo

Corruption allegations surround minister appointed to oversee EU funds in Romania
EUobserver reports that the Romanian Minister, Elena Udrea, appointed to oversee the spending of EU funds, has previously "been in the spotlight for corruption allegations." The article notes that Ms Udrea is married to a Bucharest businessman who used to run a parking-garage monopoly in the city. She was appointed as President Traian Basescu's special advisor soon after he was elected in late 2004, but resigned from the post in November 2005 amid accusations of cronyism concerning her husband's business associates.

Ms Udrea was also the subject of a parliamentary inquiry in September, which recommended opening a criminal investigation into the way she had used public money to fund media campaigns. The article notes that Ms Udrea will be in charge of €3.7 billion of funds from the EU budget for 2007 to 2013, with the aim of improving housing, infrastructure and tourism.

Commissioner McCreevy obtained €1.6 million loan amid questionable lending practices
The front page of the Irish Independent reports that outgoing EU Internal Market Commissioner Charlie McCreevy is one of several Fianna Fail politicians who have been named by an RTE 'Prime Time Investigates' programme as having been given huge mortgages from Irish Nationwide with minimum paperwork involved. Commissioner McCreevy obtained a €1.6m Irish Nationwide loan to buy a luxury apartment in the K Club golf resort in Ireland in 2006. The €1.6m loan was granted even though the home was worth €100,000 less than that at the time. The Irish Times reports that the programme claimed that the loan was granted by Irish Nationwide's then Chief Executive Michael Fingleton, despite the building society's guidelines not allowing 100 percent mortgages.

The Irish Financial Regulator's office has confirmed it would be carrying out an investigation into lending practices at the building society.
Irish Independent Irish Times

EU extends import duties on Asian footwear despite protests from the UK
Yesterday, EU ministers voted in favour of extending import duties on shoes imported from China and Vietnam by 15 months, despite strong opposition from a minority of member states including the UK. The duties have been in place since 2006 and were due to expire on 1 January 2010, however after extensive negotiations the anti-dumping tariffs will remain at 16.5% for Chinese and 10% for Vietnamese imports. France, Greece, Italy and Spain supported the extension, opposing Britain, the Netherlands and Sweden.

The BBC quotes UK Business Secretary Lord Mandelson saying: "maintaining the duties damages trade, harms the reputation of Europe and forces consumers to pay higher prices at a time when they can least afford it." Mandelson added that the EU should "turn its back on protectionism".
Telegraph European Voice BBC Independent Independent 2 FT El País

FT: The Lisbon Treaty cannot make Europeans act together, it is political will that will be decisive
A leader in the FT argues "Those who expect a transformation in European decisiveness now the Lisbon treaty is in force must think again. The choice of Herman Van Rompuy...and Baroness Cathy Ashton as high representative for foreign policy, suggests that leaders of the bigger member states do not want Brussels to be too forceful." It concludes, "If the Europeans want to be global players, they must act together. The Lisbon treaty will not ensure that. It is the political will of EU leaders to co-operate that will prove decisive."
FT: Leader

WSJ: Ashton shows foreign policy inexperience by "bashing" Israel in maiden speech to MEPs
A WSJ editorial criticises newly appointed EU Foreign Minister Baroness Ashton for using "her maiden speech in the European Parliament to fuel the Continent's No. 1 international-affairs obsession: trashing the Jewish state." The article concludes, "Lady Ashton plans her first official visit to the region early next year. It's a shame that the good Baroness didn't go on such a fact-finding trip before bashing the Mideast's only true democracy."
WSJ: Editorial

Jessica Reed: EU subsidies don't save real farmers
On the Guardian's Comment is Free, Jessica Reed notes that funding from the EU's common agricultural policy rarely finds its way to smaller farmers but more often ends up in the hands of big producers. She argues that, "some of the funding recipients were found to be Haribo (hardly a company with strong ties to traditional farming), luxury cruise ship caterers exporting dairy and sugar sachets, and landowners such as Queen Elizabeth II and Prince Albert II of Monaco. Somehow, I cannot imagine those two knee-deep in mud, cultivating vegetables on any real scale."
Comment is Free: Reed

The Telegraph reports that there is a growing rift between Gordon Brown and the Business Secretary Lord Mandelson, who felt slighted when Mr Brown did not push him for the EU Foreign Minister job last month.

The Independent features a 'Review of the Year' for the EU and urges, "If David Cameron is the next UK prime minister, he may come to regret that he has pulled the Conservatives out of a rising force in the EU [the EPP]: even if that rising force is dedicated to the principle of Euro-muddle-through-as-usual."

The Times carries a leader on Serbia's application for membership of the EU, submitted yesterday, which reads "EU membership is not merely a prize: it is a means of cementing newly democratic states in a comity of nations. Serbia without Milosevic is no rough beast, and its hour will come round at last."
Times: Leader Times European Voice El Mundo El País

An article in El Mundo discusses Croatia's EU accession bid, noting that Austrian Socialist MEP Hannes Swoboda believes that accession could occur in 2012. He notes however that corruption and organised crime are the greatest challenges facing the countries.
El Mundo

EUobserver notes that German authorities have given permission for Russia to build a major new gas pipeline to the country, known as the Nord Stream, which will bypass eastern Europe.

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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