Germany and France push for bank tax across the EU;
Barnier to announce EU proposals later this month
The IHT reports that the German cabinet yesterday agreed in principle to impose a tax on banks to help finance future bailouts but left details of the plan to be worked out when drafting legislation in coming months. French Finance Minister Christine Lagarde also attended the meeting and a joint Franco-German statement read, "We are supporting the introduction of bank resolution regimes in all EU member states."
The WSJ notes that German Finance Minister Wolfgang Schäuble said that Germany will not wait for a broader European plan before enacting its own levy. El Economista quotes the Spanish EU Minister Diego López Garrido, whose country holds the rotating EU Presidency, describing the levy as "a healthy idea".
Meanwhile, European Voice notes that, after the Easter break, EU Internal Market Commissioner Michel Barnier will present EU-wide proposals for insurance funds which would allow failing institutions to be wound down in an orderly fashion, minimising the effects on the rest of the banking sector. In a speech last month Barnier said, "It is a universally accepted principle that the polluter pays. I see no reason why things should be any different in financial matters."
Barnier is planning to present a paper to EU finance ministers who will meet in Madrid on 15-16 April.
WSJ Guardian IHT La Tribune L'Express NouvelObs Euractiv.fr Le Figaro Le Figaro 2 El Economista Le Monde El Pais European Voice EurActiv City AM FT
Lords Committee warns that Commission's plans to regulate derivatives are too costly and 'unrealistic'
The Telegraph reports that the House of Lords EU Committee has warned that the European Commission's proposals to regulate over-the-counter derivatives, which are contained in a draft directive due to be published in June, could risk damaging financial stability and burden companies with huge additional expense. City Minister Paul Myners said that under new rules companies that traded derivatives could face a 0.7 percent drop in their earnings - wiping billions of pounds in value from the real economy.
Baroness Janet Cohen, who chairs the Committee said, "It is imperative that new rules increase transparency without swooping over everything and causing damage." She added, "The devil is in the detail and hopefully the Commission won't make the same mistakes as it did with the hedge fund directive by lumping in lots of different things together."
City AM notes that the Committee warned that the EU's European Sales and Marketing Association would not be able to claim authority over clearing houses for derivatives because it does not have the financial clout to bail them out if they went under. Baroness Cohen said, "We have some problems with the Commission's idea that the EU should be supervising in this field - we just don't think it's realistic."
City AM Telegraph
Charlemagne critiques Open Europe's report on the cost of EU regulation
On his Economist Charlemagne blog, David Rennie criticises Open Europe's report on the cost and benefits of regulation in the UK since 1998, and the proportion of that cost stemming from the EU. He argues the findings are "tendentious because the British government would have regulated in all sorts of areas even if we did not belong to the EU, and because not all regulation has benefits that can be directly costed." On Open Europe's findings that, according to the Government's own impact assessments, UK-derived laws on average produce a benefit roughly 2.5 higher than EU laws, Rennie argues "The EU and national governments regulate different things, because of the way legislative competences are divvied up by the EU treaties. So [Open Europe's] comparison is between apples and oranges. It might well be that the EU regulates wastefully, but then again it might also be that the EU has powers to regulate in some expensive areas, like environmental law or health and safety law, where the main benefits are hard-to-cost public goods." He also criticises British papers for being "depressingly duff" in their reporting on the EU.
Comment: To suggest that our argument that the Government's benefit-ratio illustrates that EU regulations are less cost-effective than UK regulation is a completely invalid exercise is a strong charge. This is simply what the Government's figures say and given that it is the Government that includes such a ratio in its own impact assessments, surely this should be open to critical analysis?
Charlemagne argues that the EU and the UK regulate different things. However, as we argued, not least under the Lisbon treaty there are huge areas of shared competencies. And therefore, there are a large number of comparative laws. Even in these areas we tend to see a similar benefit/cost ratio discrepancy, which brought us to our conclusion that, wherever possible, it appears to be more cost-effective to regulate nationally - which isn't surprising given the nature of EU law. Charlemagne hasn't engaged with this point at all.
This is not to say we are seeking to abolish the Single Market, as Charlemagne seems to presume. We say in the report that, "there are also clear benefits stemming from EU regulations and, overall, the benefits of being part of the EU's regulatory regime - and therefore the Single Market - still outweigh the costs on pure economic grounds." But given that regulation is the principle means by which the EU is used to exercise power, if we do not debate the relative trade-offs between excessive EU health and safety regulation, for example, and what the UK gets in return through enlargement, for example, what is the point in debating EU issues at all? The question should surely be 'at what cost is the UK furthering its interests through the EU?' People should be free to disagree about this but there is a sensible, if complex, argument to be had here.
Economist: Charlemagne's notebook OE research OE press release
Cut in working hours for junior doctors under EU rules led to increase in sickness
The Times reports that a study at a district general hospital in Hastings has shown that the cut in the maximum number of hours junior doctors are allowed to work to 56 hours a week in August 2007 under the EU's Working Time Directive, did not improve the health of junior doctors and actually increased their rates of sickness. In the year after the reduction in the maximum number of hours, the length and frequency of sick leave among medical trainees more than doubled. Before the cap, one in four doctors took sick leave amounting to a total of 179 days. After the Directive brought hours down, three out of four doctors took sick leave amounting to 312 days.
Dr Hugh McIntyre, lead author of the study published in Clinical Medicine, the journal of the Royal College of Physicians, said that increased shift working and vacancies had "a detrimental effect on the welfare of doctors in training". As such, "the directive may have failed in its primary purpose: that of promoting the welfare of employees".
Times Open Europe research
Cameron: EU partners will find us straight forward and honest
In an interview with the FT, leader of the Conservative party David Cameron insisted his party would play a constructive role in Europe, particularly on issues such as climate change, completing the single market and raising competitiveness. "I think they will be pleasantly surprised," he says of Britain's EU partners. "Yes, we will be robust in defending Britain's interests ... but we will be engaged...They will find us straightforward and honest. We'll be friendly neighbours, not reluctant tenants."
A leader in the Economist argues that "The extent to which Britain's Tories and Europe's leaders don't understand each other is frightening". It goes on to say that "both sides to this looming quarrel should do more to accommodate each other", for example "accepting that it would be wrong in principle to impose new financial regulations by a majority vote against the wishes of the country with the biggest financial-services industry in Europe."
FT FT 2 Economist: Leader Economist Economist 2 Economist 3
Wheatcroft: Greece will need an additional €23 billion in coming months;
Commission calls on Germany to boost demand for sake of the eurozone
The WSJ notes that Greece plans to raise up to $10 billion in another bond issue in the coming weeks, even though officials say they are frustrated that the country's borrowing costs haven't fallen after the recent rescue pledge by its fellow European nations. A leader in Die Welt runs under the headline, "Greece is, financially speaking, only a zombie state".
Writing in the WSJ, Patience Wheatcroft argues that Greece will need to find an additional €23 billion in financing in the next couple of months, and that "the chances are that, somewhere, it will do so." She adds that this ability to find credit somewhere will provide the eurozone with "an excuse for not intervening", adding: "in the process, Greece is being forced to ruin itself. Greek politicians must be wondering whether they can afford to have friends like Ms. Merkel and the rest of the eurozone. Perhaps they would do better just to go straight to the IMF."
The FT notes that a report from the European Commission, published yesterday, signalled sympathy with French arguments that Germany should boost domestic demand as a way of reducing economic imbalances that are threatening the eurozone's stability. The report said that Germany and other countries that have accumulated large current account surpluses "should aim to identify and implement structural reforms that help in strengthening domestic demand".
WSJ IHT City AM WSJ: Wheatcroft WSJ: Heise Guardian: Garton Ash Irish Independent Economist Irish Examiner NY Times blog Welt Leader FT EUobserver
Commission study casts further doubt on environmental benefits of biofuels
European Voice reports that a new study from the European Commission's Trade Directorate, published last week, argues that using biofuel in relatively small amounts can yield savings in greenhouse-gas emissions, but growing larger quantities might mean that "the environmental viability of biofuels is at risk". Under EU renewables rules 10 percent of transport energy has to come from renewable sources by 2020, with biofuels expected to make up a large proportion of this.
Professor Timothy Searchinger of Princeton University is cited arguing that, according to his interpretation of the Commission's data, the benefits from biofuels are modest at best. He is quoted saying, "After 4.6 percent [of transport energy use] they are going to reduce greenhouse-gas emissions, but only by a modest amount...remember, the whole theory of biofuels is not that they reduce emissions a little, but that they reduce emissions a lot."
European Voice European Voice: Editorial
UK is "in a mess" trying to reach EU renewables targets
In a report on the BBC Today programme, on the introduction of a mechanism for households to receive money for generating their own power through solar panels or wind mills, environment analyst Roger Harrabin said: "We're in such a mess with our renewables targets, set by the European Union. We were so tardy in deciding on what to do about this that we really, if the Government doesn't want to face hefty fines from Europe and be in breach of the law, does have to do rather a lot in this sphere. So I think you're seeing the end result of a big push to try to improve our performance on renewables."
BBC Today programme OE research
European Commission proposes stringent rules on Citizens' Initiative
EUobserver reports that the European Commission has set out its plans for the citizens' initiative, which was introduced by the Lisbon Treaty and obliges the Commission to consider producing a legislative proposal if urged to do so by more than one million signatures put forward by EU citizens. According to the Commission's proposal, which still needs to be approved by the European Parliament and member states, the one million signatures must come from at least a third of member states (nine) and reach a minimum threshold in each country, which is proportionate to the number of seats they are allocated in the European Parliament.
The Commission will have the right to reject requests that are "devoid of all seriousness" or "abusive." Applications can also be rejected on the grounds that they go against "European values". The article notes that this could protect the Commission from having to examine politically awkward initiatives, such as Turkey's accession bid or the re-introduction of the death penalty. PA quotes Conservative MEP Syed Kamall saying: "the safeguards should not be used as an excuse for the Commission to avoid addressing difficult issues that might be raised."
Open Europe's Pieter Cleppe is quoted by AP, Forbes, Business Week and Canadian Business and was interviewed on Czech TV, saying that the proposal would prevent petitions from smaller political groups outside the mainstream, adding "who is going to decide what the values of the EU are?".
EUobserver Business Week AP Forbes Canadian Business European Voice 1 European Voice 2 Deutsche Welle Irish Times ABC ADN EurActiv.es FTD Frankfurter Rundschau FAZ Standaard RNW
According to a Eurobarometer report, 67 percent of Spanish people have never heard of the Common Agricultural Policy (CAP), yet 56 percent say it is not serving its consumers with adequate prices and 51 percent want to increase the budget for the agricultural sector.
EUobserver reports that the EU Agency for Fundamental Rights wants the Charter of Fundamental Rights recast as an 80-minute epic poem, accompanied by music, dance and "multi-media elements", to be performed at a conference in Brussels on 7 December.
EUobserver Agency tender
Equitable Life Chief Executive says new EU insurance rules could cost policyholders £100 million
The Times reports that the Chief Executive of Equitable Life, Chris Wiscarson, has said that the proposed new EU 'Solvency II' rules for insurers would prevent Equitable Life handing back "at least £100 million" to its policyholders, because the company would be required to hold much more capital in reserve to cover the risk of bad investments. If the proposals come into effect in their current form, Equitable would have to hold at least £100 million more as a capital cushion on top of the £500 million to £600 million that it already holds, Mr Wiscarson said.
Handelsblatt: EU foreign policy is a "shambles"
A leader in German daily Handelsblatt argues that the External Action Service (EAS) is nothing but a "shambles" and that the best way forward would be to "start again from scratch". The article criticises the choice of Catherine Ashton as EU Foreign Minister, saying "Building one institution out of three power hungry ones in Brussels would have been mission impossible even for an experienced politician", and warns that EU foreign policy could "drift into irrelevance".
Meanwhile, the Economist's Charlemagne column argues that "Europeans need to be less starry-eyed about what they can achieve through dialogue and political integration. Some still dream that the EU's pooled sovereignty can serve as a 'model' for systems of global governance, transcending the nation-state. Right now, that looks like a fantasy," and concludes that the EU must "Above all, stay rich: so Europe must find new sources of growth. It does not matter whether a declining Europe speaks with dozens of voices or one: nobody will listen."
Handelsblatt Leader Economist: Charlemagne
Die Welt reports that Belgium will today vote on whether to introduce a total ban of the burqa. If this law is voted in, Belgium will be the first European country to enforce a total ban.
Die Welt FT Deutschland Le Figaro
The FT reports that credit rating agency Moody's has raised its outlook for Lithuania, Latvia and Estonia and said the worst of the economic crisis now appeared to have passed for the Baltic countries. The ECB and Commission are expected to deliver a verdict on Estonia's readiness for the euro next month.
The Times reports that the steel group Eurofer has asked the EU's Competition department to launch an inquiry into cartel behaviour by the world's top mining companies regarding the price of iron ore.
Times EurActiv European Voice
Unemployment in the eurozone reached 10 percent in February, the first time it has reached double figures since the euro was introduced. Inflation in the eurozone has reached to 1.5 percent.
BBC WSJ Spiegel
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.