Friday, March 05, 2010

Open Europe press summary: 5 March 2010

Commission plans for carbon tax would cost UK economy at least £3.2bn;
UK Government vows to fight plans
PA reports that the Government last night pledged to block European Commission plans for a mandatory minimum tax rate on carbon across the EU. The front page of the Telegraph reports that Algirdas Semeta, the new European Commissioner for Taxation has said that an EU carbon tax is a "priority" for him and indicated that he might table a concrete proposal as early as next month. The tax would cover carbon emissions from energy sources such as petrol, coal, and natural gas when they are used as motor and heating fuel or to produce electricity - emissions not covered by the EU's emissions trading scheme, which focuses on power generators, heavy industry and other large installations. Although the EU would decide the tax rate, the actual revenues from the levy will be collected and kept by national governments.
The article cites Open Europe's calculation, on the basis of an earlier proposal that was shelved, and set a £9 levy on a tonne of CO2, that the cost of the new tax to British businesses and consumers would be £3.2 billion. The final cost could be even greater if electricity, generated from natural gas, was included in the levy. The figures are also cited in the Express.
Open Europe Director Mats Persson is quoted in the Telegraph saying that "a single EU levy is an unnecessarily inflexible tool" that takes no account of existing national taxes or measures to cut climate change. "A single flat rate will disproportionately hit poorer consumers who spend a larger share of their income on energy and fuel bills," he said. "It will also impose a disproportionate burden on small businesses, which are vital for economic recovery and growth. The EU needs a more flexible and proportionate approach to cutting carbon emissions." Mats also appeared on the BBC's Today Programme this morning discussing the plans.
The Telegraph also notes that the European Commission has long seen the introduction of EU-wide 'green taxes' as a step towards a direct EU tax, used  to directly finance the EU budget - a move strongly opposed by member states such as Germany and the UK.
Telegraph EUobserver BBC Today Programme
German Economic Minster: "Greece doesn't want a cent. In any case, the German government will not give a cent";
Angela Merkel suggests German Constitution may prohibit Greek bailout
As Greek PM George Papandreou travelled to Germany to meet with German Chancellor Angela Merkel today, he insisted that Greece is not seeking bailout money from the EU, but a public commitment to a financial rescue plan to reassure markets, saying Greece did not want to become "the Lehman Brothers of the EU". Le Monde quotes German Economic Minister, Rainer Brüderle saying in response: "Papandreou has said that he doesn't want a cent. In any case, the German government will not give a cent".
Under a headline in FAZ reading "Germany's Constitutional Court could stop financial help for Greece", the article notes that a spokesperson for Angela Merkel has indicated that Article 32 of the German Constitution may prohibit a German bailout of Greece.
Meanwhile the Times reports that Josef Schlarmann, a senior figure in Angela Merkel's CDU party, and Frank Schaeffler, a finance policy expert for the Free Democrats, has suggested that Greece sell off a number of its islands and other assets to help decrease the public debt. The story originally ran in the paper Bild under the headline, "Sell your islands, you bankrupt Greeks! And the Acropolis too!"
The Telegraph reports that Masahiro Sakane, Chairman of Komatsu, the world's second-biggest manufacturer of heavy construction equipment, said that Britain's reluctance to join the euro was "a blessing", adding: "Today, I am glad that the UK chose not to join the euro."
The IHT reports that Greece carried out a bond sale yesterday, with a €5 billion, ten-year bond issue that was oversubscribed. ECB President Jean-Claude Trichet yesterday rejected calls for IMF involvement in Greece, reports the WSJ.
Times FT Telegraph BBC BBC 2 Times FT 2 FT: Lex IHT Telegraph European Voice BBC 3 Independent IHT Irish Times: Beesley Telegraph 2 Economist Guardian Irish Independent Economist: Charlemagne FT 3 WSJ WSJ 2 Guardian 2 City AM WSJ 3 Evening Standard WSJ: Fidler Guardian 3 Irish Independent 2 FTD FAZ Reuters: Juncker Reuters Italia: Bruederle La Informacion Capital Stern Le Monde Le Monde 2 Le Figaro Le Figaro 2 FAZ Rai News 24
Sarkozy: "It is unbelievable that the EU prevents member states from subsidising their exporting industries"

EurActiv reports that French President Nicolas Sarkozy yesterday said that the EU's competition policy is preventing the creation of strong European companies and needs to be more flexible. "I want the conception of European competition to move forward...It is unbelievable that the EU prevents member states from subsidising their exporting industries, whereas its Asian competitors resort to massive financing on their territories, as well as on the international market", Mr.Sarkozy said. "We cannot be the only world economic zone which unilaterally applies the precepts of free trade, totally ignoring the behaviour of its big competitors".

EurActiv France  Reuters


Reuters reports that draft reports for the European Commission are warning that the EU's targets for biofuel use in transport are likely to harm the environment and have adverse impact on food prices. Environmental campaigners have long warned that biofuels are environmentally harmful, but this is the first sign of misgivings within the Commission.
Reuters OE Research
Miliband forced to 'prop up' Ashton in battle with Commission over EU foreign policy
The Telegraph reports that Foreign Secretary David Miliband and Swedish Foreign Minister Carl Bildt have written a letter to "prop up" EU Foreign Minister Catherine Ashton in her efforts to establish the EU's new foreign policy institutions, including the EU's new diplomatic corps - the External Action Service (EAS). Member states are concerned that the European Commission is trying to seize control of the new service and 'empire build' in an area still predominantly reserved for member state governments.
The Times quotes the letter, which says that the EAS "will only work if the Commission, the member states and the council secretariat are able to work together coherently. We are concerned about some of the inter-institutional struggles evident in our current negotiations...Rivalries are well ingrained." The Telegraph quotes a European diplomat saying, "The closer we get to the reality of an EEAS, the harder it becomes for the Commission to give up some control, it is the nature of all bureaucracies." An EU official is quoted in the FT saying, "The member states only this week realised that the Commission was trying to take over this baby that they have crafted, and they want it back."
Foreign ministers will discuss the creation of the EAS today, while the 27 European Commissioners will debate the new body's structures on 11 March.
The Economist's Charlemagne notes that senior sources have warned that, "When the Lisbon Treaty (or rather its predecessor, the EU constitution) was drafted, the people who came up with the idea of a 'double hatted' foreign policy chief who would speak for the national governments and the European Commission made a terrible mistake...The fact that she is a vice president of the commission does not mean that she can take decisions for the commission." This is because individual commissioners, no matter how senior, have little power: all commission decisions are taken by the 'college' of 27 commissioners.
Guardian Times FT Telegraph Economist: Charlemagne blog EUobserver Handelsblatt Reuters 
German regions: "Europe can't stick its nose into everything"
Meanwhile, EurActiv reports that various German Bundesländer have criticised the Europe 2020 strategy, claiming that some EU-level benchmarks set as part of the strategy breach the subsidiarity principle. Minister of European Affairs for Baden-Württemberg, Wolfgang Reinhart, has criticised the targets set as part of the EU's Education and Training programme, saying "This cannot be. Europe cannot stick its nose into everything...This is a criticism of Barrosso and the new Commission. They should stay out of this".
Eric Le Boucher Column Les Echos Euractiv

Belgian PM calls for establishment of European Debt Agency
Writing in FT Deutschland, Belgian Prime Minister Yves Leterme has proposed a common finance ministry or debt agency for the eurozone, in order to tackle problems highlighted by Greece's debt crisis. Leterme described the European Union's Stability and Growth Pact, which is supposed to regulate countries' budget deficits, as a provisional solution. "I suggest going a step further and founding a common finance ministry or a European debt agency for the eurozone," he wrote, saying this could be known as the European Debt Agency (EDA). "The EDA would take over the existing debt instruments and issue new ones, if Ecofin ... and the euro group gave its approval".
Reuters Reuters 2 IMN MA Le Soir

The European Commission announces that €2.3 billion is to be spent on gas and electricity infrastructure
Nouvel Obs reports that the EU unfroze a further 2.3 billion for energy projects to modernize gas and electric networks within the EU, bringing the total invested in energy projects to a total of 4 billion. Handelsblatt specifies that 200 million of the 2.3 billion will be invested in the Nabucco pipeline, which is to transport gas from the Caspian Sea to Europe.
NouvelObs Le Figaro AGI   La Stampa   Il Sole 24 Ore IHT EUobserver European Voice Handelsblatt FTD FD Die Welt   
European Commission unaware of how many of its civil servants make more than €140,000 per year
Dutch press agency ANP reports that the European Commission has been unable to confirm how many EU civil servants made more than €140.000 last year. Commissioner Siim Kallas said that the problem lay in the fact that the Commission did not have complete oversight of welfare payments and advantages of this kind. He further said that the Commission should pay its officials handsomely because it should have the ability to outbid wages in member states.  
Dutch magazine Elsevier reports that the European Court of Justice has ruled that a Dutch law requiring that EU citizens may only marry non-EU citizens with a minimum income level violates the EU Treaty.

Reuters reports that a leaked Commission paper indicates that EU Development Commissioner Andris Piebalgs may name and shame France, Germany and Italy for not living up to their aid commitments, contributing to a roughly $17 billion funding gap this year. Those countries were named by an OECD report last month as the EU's worst performers in meeting aid commitments.


An article in the IHT looks at the growing importance of the European Parliament under the Lisbon Treaty, noting that "it has struggled to establish its credibility in many member countries and often attracted lurid headlines over abuses of its expense system and the monthly commute it makes from one building in Brussels to another in Strasbourg."
IHT OE Research
Belgian daily De Morgen reports that the Belgian Defense Minister is hoping to sell Belgian army bases to the EU, arguing that they are suitable to stock materials needed in case of civilian deployment during crises or disasters, but will not stock weapons.
De Morgen
The Guardian reports that the renewable power industry has warned that it needs a further £500m from the Government over the next two years if it is to help meet EU energy and climate change targets.
Icelandic negotiators are in London aiming for a new deal to repay the Netherlands and the UK for bailing out Icesave depositors before a referendum tomorrow, in which around 70 percent of Icelanders are expected to reject any compensation.
WSJ Times Economist Irish Times
The Irish Independent reports that the European Court of Justice has ruled that laws in Ireland, France and Austria imposing minimum prices on tobacco undermine fair competition.
Irish Independent WSJ: Editorial Nouvel Obs Conseils-avocats easy bourse Irish Times
The Government has reversed its decision to cut funding for UK students wishing to study at the College of Europe, known as the favoured training ground for Eurocrats.
After major gains in regional elections, far-right politician Geert Wilders is on course to becoming Dutch Prime Minister, reports the Telegraph.
David Cameron and Nicolas Sarkozy will meet this month to discuss the scope for cooperation should the Conservatives win the General Election this spring.
FT Telegraph

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