Wednesday, January 06, 2010

Open Europe press summary: 6 January 2010

Former Le Monde Editor: Lisbon Treaty has made EU more complex rather than more simple
In an article in El País Jean-Marie Colombani, former Editor of Le Monde, has criticised the Lisbon Treaty for making the EU more complex, regarding the combination of the full-time EU President and rotating EU Presidency for member states. He writes, "What a strange thing, this two-headed presidency!" He continues, "Put ourselves in the place of European citizens, who were sold the idea that the Lisbon Treaty would simplify things...The idea was that this simplification would make Europe more dynamic and more efficient. And yet, in this New Year, one feels a rush of vertigo: nobody had really realised that the rotating presidency would continue...Now we realise that Europe will be run by a complex mechanism with at least four axes: the president and the European foreign minister; the country holding the rotating presidency; the president of the Commission and his team and finally the national heads of state and government."
The Economist's Charlemagne blog argues that the potential for this problem has been obvious since the Lisbon Treaty negotiations started, and writes: "Did none of them read the Lisbon Treaty?" It adds, "This would be the same Jean-Marie Colombani who edited Le Monde until 2007, and whose newspaper was among the loudest cheerleaders for the ill-fated EU Constitutional Treaty and then its near-identical replacement, the Lisbon Treaty."
El Pais Economist: Charlemagne blog Le Figaro

ECB Board Member Juergen Stark says EU will not bail out Greece
Handelsblatt reports that "the EU has put the thumb-screws to the Greeks", noting that "under massive European pressure the Greek government has agreed to have its state finances cleaned up faster than initially planned". Greece has now pledged to reduce its budget deficit from around 12.7% in 2009 to under 3% of GDP by the end of 2012, one year earlier than previously planned.

Meanwhile, in an interview with Italian newspaper Il Sole 24 Ore, ECB Executive Board Member Juergen Stark said that the EU would not help bail out Greece, arguing: "Greece is in dire straits: not only has the deficit reached very high levels, but the country has also witnessed a serious loss of competitiveness. Such problems are not due to the global crisis, since they are substantially home-made. Therefore, they must be tackled through proper measures in the interest of Greek citizens, and in respect of the responsibilities that the Greek government has towards both the single currency and its partner countries. Rules...are unequivocal: being part of the Monetary Union doesn't guarantee any right to claim for financial support by other member states."
When asked whether the EU Treaties themselves addressed possible "financial assistance" in cases of "serious difficulties" and in "extraordinary circumstances", Mr Stark responded: "It's true, indeed. Yet, the Treaties also establish that such circumstances must be 'out of control' of the country. This is not the case. As I just told you, most of Greece's problems are home-made...Over the last few years, the country hasn't kept public accounts under control. Nor has it worked to enhance its competitiveness. The Treaties don't provide for a 'bailout clause', and rules must be respected. This is an essential requirement in order to guarantee the future of a Monetary Union among sovereign states with separate national budgets. The markets just deceive themselves when they take for granted that at some point the other EU member states will make a joint economic effort to bail Greece out."  His comments led to a sudden fall in the euro, reports the FT.

Martin Wolf comments in the FT: "the crisis in the eurozone's periphery is not an accident: it is inherent in the system. The weaker members have to find an escape from the trap they are in. They will receive little help: the zone has no willing spender of last resort; and the euro itself is also very strong. But they must succeed. When the eurozone was created, a huge literature emerged on whether it was an optimal currency union. We know now it was not. We are about to find out whether this matters."
Il Sole 24 Ore BBC Bloomberg WSJ Times: Maddox Reuters CNBC: Allen FT FT: Wolf Eurointelligence Handelsblatt El País

Lord Myners says rejection of Icesave bill puts Iceland's EU membership bid in doubt
There is widespread coverage of Icelandic President Olafur Ragnar Grimsson's rejection of the bill that would have seen Iceland reimburse £3.6 billion to the UK and the Netherlands for bailing out depositors of the Icesave bank. The President's refusal means that the bill will now go to a national referendum.
The front page of the Times reports that Lord Myners, the Financial Services Minister, has said that if Grimsson's decision is allowed to stand Iceland will be frozen out of the international financial system and will not be able to join the European Union. The Guardian notes that he has warned Icelanders against a No vote, saying, "The Icelandic people, if they were to reach that conclusion, would effectively be saying that Iceland does not want to be part of the international financial system, that Iceland doesn't want to have access to multinational, national and bilateral funding and doesn't want to be regarded as a safe counter-party with whom to do business."
The FT quotes Dutch Finance Minister Wouter Bos saying, "Such isolation can be felt in many ways. I hope we don't have to allow it to be felt but can come out of this in a reasonable manner."
Iceland's government has insisted it remains "fully committed" to honouring its commitments but President Grimsson said a referendum was in the interests of democracy, given the depth of public unease over the legislation.
Express Mirror IHT Irish Independent: McWilliams Irish Independent Independent Independent: Danielsson Irish Times City AM City AM 2 EUobserver EurActiv BBC Guardian Guardian: Editorial ABC Spiegel WSJ WSJ: Martin Mail Times Times: Boyes FT Telegraph: Evans-Pritchard
Non-financial industry shows widespread concern at EU derivatives proposals
The WSJ reports that more than 160 non-financial European companies, including BAE systems and Air France-KLM, have signed a letter objecting to European Commission proposals to tighten rules for over-the-counter derivatives markets, saying it will increase the cost of hedging market risks and could crimp economic growth in the EU.
The Commission is currently undertaking impact assessments of proposals designed to reduce risks in the derivatives markets, which are due to become legislative proposals this year.
Defra food strategy programme bashes CAP and EU rules on GM food
The FT reports that Environment Secretary Hilary Benn set out Defra's new 20-year food strategy report yesterday, Food 2030, highlighting the need for reform of the EU's Common Agricultural Policy and containing a push on genetically modified food. The article notes that, in addition to CAP reform, one of the Government's aims is to push the EU towards a more open attitude to genetically-modified crops, the use of which is currently restricted by the EU. The Government said: "[GM] could have some potential to help meet future challenges [but] safety must remain our top priority." Defra's report found that consumers paid an extra £3.2bn, or £52 each, for food in 2007, because of the CAP.
A leader in the FT disagrees with Mr Benn's argument that, in order to secure its food security, the UK needs to start producing more of its own food, writing: "Food markets must remain open. This is crucial for the developing world, in particular, which suffered from the high prices and thin markets of 2008. Edging towards autarky is not the answer to anything."
FT FT: Leader Telegraph
EU-wide rules on bankers' bonuses under consideration
EurActiv reports that the asset management industry has secured an exemption from the UK Government's one-off 'bonus tax' and notes that plans to adopt a pan-European law to curb bankers' bonuses are currently under scrutiny at the EU Council of Ministers and the European Parliament. EU rules on bankers' bonuses have been written into a proposed revision of the EU's Capital Requirements Directive.
Eco-friendly light bulbs prove disappointing
German consumer magazine Ökotest reports on new 'eco-friendly' light bulbs, which consumers are being forced to buy because the EU is phasing out traditional incandescent light bulbs. The bulbs have been marketed as being more energy efficient and it has been claimed using them can save up to €190 per year, but in tests by the magazine comparing them with normal bulbs, the results were disappointing. Only a third of the sixteen bulbs tested produced a satisfactory level of light and one Swiss model produced almost no light at all.  Four of the models were described as flops, because they failed all of the tests and only one model scored an overall mark of good. 
The most expensive low-energy lamp in the test used more electricity than its traditional light bulb counterpart, but still generated a worse level of light. Finnish broadcaster Yle notes that there are also concerns over possible health risks caused by the low-energy lamps, as many of them contain quicksilver. The EU last year banned quicksilver in thermometers due to health concerns, but surprisingly the substance is still allowed in low-energy lamps, the article reports.
Oekotest Yle
An article by ICM news cites Open Europe's 2008 research on 100 examples of EU fraud and waste.
ICM Open Europe press release
Airbus threatens to terminate production of A400M military transporters unless European governments pay up
The Independent reports that EADS, Airbus's parent company, is threatening to cancel the much-delayed €20bn (£18bn) A400M military transporter programme if European governments do not agree to "take their share of the burden" before the end of this month. The Times notes that the seven buyers - Britain, France, Spain, Germany, Belgium, Luxembourg and Turkey - have ordered 180 of the aircraft but have been asked by EADS for €5.3 billion in extra funds as a result of the delays. The article notes that the German media claimed yesterday that Thomas Enders, EADS Chief Executive, told a group of Airbus directors last month he "no longer believed in a successful continuation of the programme" and had begun preparations for it to be terminated.
Independent Times Spiegel Handelsblatt
Aftonbladet: Unlike Sweden, Spain will demand stronger social rights and defend European social model
A leader in Swedish daily Aftonbladet looks at the Spanish EU Presidency, noting that "In contrast to the pale, socially incompetent Swedish Presidency, Spain will during its six months as EU President demand stronger social rights [in the EU] and defend the model of collective agreements."
Meanwhile, a leader in the FT takes a different view of the Spanish EU Presidency, writing: "Perhaps Mr Zapatero is being distracted by his domestic travails, because the work programme that he has proposed for the Spanish presidency is remarkably anodyne, even by the undemanding standards of most European Union presidencies."
FT: Leader Aftonbladet
€54,000 lost in suspected EU fraud scandal
El Pais reports that a judge in the Spanish city of Ourense has widened an investigation into a local organisation headed by Rogelio Martinez, examining the use of EU funds obtained via the Xunta de Galicia (the executive body of the autonomous province of Galicia). It is suspected that false claims were made for €54,000 between the years of 2000-1.
El Pais
Labour spent almost £1 on every vote in 2009 European elections
The Guardian reports that figures from the Electoral Commission show that the Labour party spent 97p for every vote it secured in the 2009 European elections. The Conservatives spent marginally more than Labour, but they secured a much better return for their money, gaining one vote for every 59p they spent. Spending figures show that the Conservatives' campaign cost £2.5m, while the Labour campaign cost £2.3m. In the 2004 elections, the Conservative campaign cost £3.1m, while the Labour campaign cost £1.7m.
UKIP, which came second in the elections, secured one vote for every 51p it spent on its campaign, which cost £1.3m overall. The Liberal Democrats, who came fourth, spent £1.2m on their campaign and received one vote for every 57p they spent. Overall, spending by all parties during the campaign came to just over £9m.
Guardian Electoral Commission: Spending figures

European Parliament plans to sell its body scanners
The BBC reports that the EU will host talks with aviation security experts from EU member states tomorrow on the use of body scanners at airports. It notes that the Commission withdrew a draft EU regulation on body scanners in 2008, following objections from the European Parliament.


Meanwhile, Belgian daily Het Nieuwsblad reports that the European Parliament will sell six of its body scanners, which were bought in 2002 for €720,000, but have never been used. The existence of the scanners, stored in the cellars of the European Parliament, became known in December 2008.
BBC DPA Nieuwsblad El Mundo El País ABC

EU prepares to launch new 10-year growth programme after failure of Lisbon Strategy
The FT reports that new EU President Herman Van Rompuy has announced he is to chair a summit in Brussels on 11 February to prepare a 10-year programme aimed at boosting Europe's competitiveness and economic growth, after the 10-year Lisbon Strategy ended last month. The Lisbon Strategy was meant to transform the EU, by 2010, into "the world's most competitive and dynamic knowledge-based economy" but, the article notes, failed to meet this ambition, or more specific targets such as spending on research and development, and employment levels. In a scathing 2004 report, Wim Kok, a former Dutch Prime Minister, said: "Lisbon is about everything and thus about nothing. Everybody is responsible and thus no one."
The February event is expected to pave the way for EU leaders to adopt a new 10-year programme, called the "2020 strategy", at a second summit in March.
An article in the Telegraph looks at the five major tests facing the EU in 2010 and suggests one thing to watch is "A power-grab from the ECB. Some inside the central bank would like the institution to become the EU's principle financial regulator. Expect the Bank of England to resist."
No link
The Herald reports that a campaign led by a Scottish academic, David Petrie, to secure better rights for foreign language lecturers working in Italy has won support from UK Minister for Europe, Chris Bryant, who is to ask the Italian government to end discrimination against British lecturers working in Italian universities.
No link
Business Green reports that Climate Change Secretary Ed Miliband has said that the UK will continue to press other European countries to raise the EU's emissions reductions targets. He said, "For Europe that means, provided there is high ambition from others, carrying forward our commitment to move from 20 per cent to 30 per cent reductions by 2020 compared to 1990."
Business Green

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