EU judges ruling on controversial 3.7% pay increase will benefit from rise;
MEPs seek 8.6% increase in allowances for assistants
The BBC reports that the European Commission yesterday decided to take the EU's 27 member states to the European Court of Justice in an attempt to overturn their opposition to a 3.7 percent pay increase for EU officials. National governments, including the UK, offered a compromise 1.85 percent increase before Christmas but the Commission has described the reduced increase as "illegal". The FT notes that the move to halve the expected pay rise would save member states' treasuries about €90m.
"We are talking about respect of agreed rules. This is not something where political discretion applies," said a Commission spokesman. "We are talking about the rule of law."
The Telegraph notes that European judges in Luxembourg, who earn £215,000 a year, will rule on the case this summer even though they themselves stand to benefit from the pay rise as EU officials. The decision to take the matter to the ECJ was decided unanimously among the 27 EU Commissioners. Baroness Ashton, Britain's Commissioner and newly appointed EU Foreign Minister, will pocket an extra £9,000 on top of her basic annual salary of £241,000 if the Commission's legal action is successful.
Open Europe's Mats Persson is quoted saying, "Only the EU could come up with a system in which judges and bureaucrats have the ultimate power to decide on whether to award themselves an inflation-busting pay rise in the middle of the worst recession for generations. It's hard to find a clearer case of an inbuilt conflict of interest." Open Europe's Stephen Booth was quoted by PA saying, "What better way to illustrate the absence of democratic accountability and lack of checks on EU power than this?"
Open Europe was also quoted in the Express, Polish daily Rzeczpospolita, and on news sites Euractiv and Challenges.
Meanwhile, European Voice reports that the President and Vice-Presidents of the European Parliament are seeking to increase the allowance that MEPs are paid to employ office assistants by 8.6 percent, more than double the 3.7 percent currently being disputed for other EU officials. If agreed, the total annual cost of paying for Parliament's assistants would be increased by €13 million, to €160m in 2010. The changes, which involve a switch of spending from other budget lines, would have to be approved by the Parliament's Budgets Committee and a plenary vote in the Parliament.
Open Europe blog EUobserver BBC FT Independent European Voice Die Welt Tagesschau FTD European Voice 2 AFP Swedish TV Euractiv Express Rzeczpospolita Telegraph Challenges
Czech news site EUportal cites Open Europe's list of the 100 costliest EU regulations, which found that these regulations will cost the UK economy over £18bn in 2010. Open Europe's Mats Persson is quoted saying, "Since 72% of the total cost of UK regulation now originates in Brussels, the next UK Government must take a new, radical approach to cutting red tape, and this means getting smarter and tougher when negotiating in Europe."
EUportal Open Europe press release 100 Costliest Regulations
New poll suggests 58% of Icelanders would reject Icesave bill in referendum set for 20 February;
Icelandic President: I know Britain does not have experience in trusting the people with a referendum
The Times reports that the Icelandic government has proposed to put a bill, which would see Iceland reimburse £3.6bn to UK and Dutch savers following the collapse of the Icesave bank, to a referendum on 20 February, after the Icelandic President refused to sign it into law. The Guardian reports that a new poll from MMR has found that 58% of respondents said they would vote against the bill in a referendum, while 42% said they would vote in favour of it.
The WSJ notes that Iceland is not reneging on the principle of repayment, but rather objecting to the terms of the state guarantee. The loans amount to around 40% of Iceland's projected 2009 GDP. Writing in the paper, former Board Member of Iceland's Central Bank Hannes H. Gissurarson argues: "The present upheaval will however make EU membership less likely: The EU will be less eager to accept Iceland; and the Icelanders, seeing the EU as supporting the interests of the British and the Dutch against Iceland, will be more reluctant to join."
Iceland's Foreign Minister Össur Stropheöinsson warned the British and Dutch governments not to interfere in the legislative process, saying: "Despite the President's decision, which I deeply regret, it has to be remembered that he exercised his constitutional right".
Speaking to BBC Newsnight, Icelandic President Olafur Ragnar Grimsson said of his decision to pass the bill to a referendum: "You have to trust the democratic process. You see in France, in the Netherlands, in Ireland, in many European Union countries, referendums are a normal part of the democratic process. I know in Britain you don't really have the experience of trusting the people with a referendum but all over Europe there are countries that trust the people with a referendum...I thought the new Europe we were talking about was not only about market reforms but also about democracy and the will of the people."
Larry Elliott writes in the Guardian, "Iceland's president, was well aware of what he was doing. When the Swedes held a referendum over membership of the euro, the country's political elite said yes; the people said no. When the French and the Dutch passed judgment on the first stab at the new European constitution, the elite was all in favour; the voters were not. It was the same story, first time round at least, when Ireland voted on the Lisbon treaty...Grimsson is gambling that a big no vote next month will lead to a softening of the agreement".
BBC: Newsnight BBC: Today programme WSJ: Gissurarson WSJ: Analysis Times: Leader Times Times 2 Express France 24 Guardian Guardian 2 Guardian: Elliott Independent Independent: Leader FT FT 2 FT: Hudson FT: Leader FT: Lex Irish Times Irish Times: Leader City AM BBC European Voice
Sarkozy announces ambitions for EU carbon taxes and tariffs
EUobserver reports that France intends to push for a tax on carbon emissions across the EU, President Nicolas Sarkozy said yesterday, a week after his country's top court struck down an attempt to introduce just such a tax domestically. The article notes that the French Constitutional Court objected to the proposal as it would place the overwhelming burden of the tax, set at €17 per tonne of CO2 emitted, on households instead of industry and would have increased household gas bills and the cost of petrol significantly.
Sarkozy also wants to see carbon "tariffs" introduced for products entering the EU from countries with weaker environmental legislation. "We will not accept goods that fail to conform to our environmental standards," he said. "In future we will levy a 'climate tax' at Europe's borders."
Euobserver Le Figaro
Zapatero to make implementation of EU financial risk board a priority
Spanish Prime Minister José Luis Rodríguez Zapatero will make the implementation of the EU's proposed European Systemic Risk Board a priority during his EU Presidency, Euractiv reports. The Board will be set up to monitor for risks to the EU's financial system but will have no binding powers. According to the article, the Spanish are satisfied with the current proposal and will seek an agreement with the European Parliament during a first reading. However, reports currently being drafted by MEPs criticise the tabled proposal on several accounts, including the "vague language" explaining how the ESRB will interact with three new European Supervisory Authorities (ESAs) for micro-prudential supervision. "The vague language in the proposal implies that it will be a weak institution," say sources close to the reports' authors.
European Parliament report says harmonising direct taxation "is desirable"
A report entitled "EU policy challenges 2009-2019", prepared by policy experts employed at the European Parliament has suggested that the economic crisis could present an opportunity to harmonise taxation policy across EU member states.
The report sets out three possible scenarios for economic and monetary union over the next five-to-ten years, with one option reading: "Tax policies and tax legislation/practices in Member States are further harmonized, especially in direct taxation. This allows for a smoother functioning of the single market, thus providing implicit insurance against asymmetric shocks and crises." The report says that this option, "is desirable but has not been realistic until now. It remains to be seen whether the crisis presents a lasting opportunity for more harmonization in direct taxation legislation, such as the Common Consolidated Corporate Tax Base (CCCTB), which the EP has been actively calling for."
Officials said the report is meant to be "food for thought" rather than the official view of the Parliament.
EurActiv EU Policy Challenges
Chris Bryant doesn't rule out joining the euro
In an interview with Le Monde, Europe Minister Chris Bryant has refused to rule out the UK joining the euro. When asked if the UK should join, he said, "First of all, a series of economic conditions must be fulfilled". He added that many British homeowners take out loans for homes at variables rates, so even a small change in those rates has a big impact on their lives and "As long as that is the case, we will not be able to put ourselves in the hands of the European Central Bank".
He went on to reject the notion that the UK is 'eurosceptic', suggesting that the UK has played a big role in pushing forward the enlargement of the EU and believes that the enlargement should continue to include Turkey, saying: "People who think the EU should remain a Christian club annoy me".
Bryant added that he thinks that the EU's new structure, under President Herman Van Romuy and Foreign Minster Catherine Ashton, must be used to increase Europe's influence in world affairs, in particular by having a common foreign policy toward Russia and Iran.
Gap between eurozone economies widens;
Greece insists it does not require EU bail-out
The WSJ reports that the gap between the eurozone's strong and weak economies widened at the end of 2009, with Germany's services sector racing ahead, while Spain's service sector contraction deepened. The paper notes that "These wide variations in economic conditions between eurozone members will make life harder for the European Central Bank to set policy for the region."
Meanwhile, the FT reports that Greece yesterday rejected speculation that it would need a bail-out to tackle its swollen budget deficit after Jürgen Stark, a European Central Bank Executive Board Member, said there would be no bail-out for the country by other members of the eurozone. However, the article notes that any decision on a Greek bail-out will be taken by politicians and not the ECB, commenting that EU leaders "have been deliberately vague about what would happen if the worst came to pass in order to maintain the pressure for fiscal reform."
WSJ WSJ: Analysis WSJ 2 FT City AM Irish Independent El País
DRC bans EU Development Commissioner
According to Dutch newspaper Het Laatste Nieuws, Belgian EU Development Commissioner Karel De Gucht is no longer welcome in the Democratic Republic of the Congo (DRC), a former Belgian colony. According to the DRC Foreign Office, De Gucht made a speech in Strasbourg on 16 December, in which he expressed his opinion on the situation in the troubled Kivu region "in undeniably racist, disrespectful and irresponsible terms".
DRC Foreign Affairs Ministers Alexis Thambwe is quoted saying that "a visit of EU Commissioner Karel De Gucht to the Congo is not desired, and a request for a visa to the Congo would be seen as a provocation". De Gucht has reacted saying that his speech was on behalf of the European Commission and had been reviewed by EU Foreign Minister Catherine Ashton.
HLN RTL Standaard The Parliament
AFP reports that the European Commission has declared that its antitrust procedures are to become more transparent. A press release by the Commission notes that "documents will make it easier for companies under investigation to understand how the investigation will proceed, what they can expect from the Commission and what the Commission will expect from them."
AFP EC Press Release
The BBC reports that the first contracts are today being awarded to the companies that will start to build the operational network for the Galileo satellite, the EU's version of GPS. The article notes that Galileo is behind schedule and its original cost estimate of €1.8bn will now probably be in excess of €5bn.
Following an announcement from the TUC that UK workers are giving away £27.4 billion of unpaid overtime a year by working longer hours, Martin Waller, Deputy City Editor, comments in the Times: "The average working week is apparently 38.5 hours; work more than that...and you are into slave labour territory. The EU has already been down this tiresome route, trying to impose a one-size-fits-all working directive. This was immediately the subject of attempted opt-out clauses by countries, including the UK, that saw its inherent impracticability."
Times Open Europe research
Jorge Moragas Sánchez, Secretary for International Relations in the Spanish People's Party is interviewed in Spanish daily Público complaining that the €100 million budget for the six month rotating Spanish EU presidency is high when considering that the position is now one of "coexisting cooperation" with permanent President Van Rompuy. "We are confronted with a time of crisis...we could spend a lot less," he said.
El Mundo reports that the European Trade Union Confederation has sent Spanish PM Jose Luis Zapatero a list of recommended actions to be carried out during the Spanish EU Presidency. The document demands that: "The Spanish Presidency should prioritise regulation of financial markets by establishing a transaction tax, by eradicating fiscal havens, by restoring fiscal justice or by pushing for a directive that establishes a common base for corporate tax."
The Socialist group in the EP has launched a website where citizens can suggest questions to be asked to the new Commissioners in their confirmation hearings, which will be held in the EP from next Tuesday.
EUobserver reports that Boyko Borissov, Bulgaria's Prime Minister, has threatened to sack one of his ministers, Bojidar Dimitrov, after he suggested that Bulgaria would veto Turkey's EU accession bid unless it pays €14 billion in compensation for Bulgarians driven out in 1913.
Brown faces coup from ex-Cabinet ministers
Following former Cabinet ministers Geoff Hoon and Patricia Hewitt's attempt to force a secret ballot on Gordon Brown's leadership yesterday, the Guardian notes that Geoff Hoon was overlooked for the job of EU Foreign Minister in favour of Catherine Ashton, "sowing the seeds for his new year rebellion".
In the Telegraph, Benedict Brogan comments that Lord Mandelson seems willing to let "him live. For the moment." However, Brogan notes that recently, Mandelson "has been in a sulk, angered by the missteps and errors of the friend he had hoped to turn into a winner. Some of this is pure pique: he remains infuriated at the shambles that allowed Baroness Ashton of Upholland to end up as the EU high representative for foreign affairs. He was so angry at the time that, for about six hours, he tried to get the job himself, only to be blocked by the Prime Minister, who saw that the appointment would pull the plug on his own career."
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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: openeurope.org.uk or call us on 0207 197 2333.