German think-tank: Eurozone bailout fund breaches EU law
Die Welt reports that a new study conducted by the German think-tank Centrum für Europäische Politik backs the claims of those who are currently challenging the legality of the eurozone bailout package with the German Constitutional Court. The study claims that the public has been deceived on several points with regards to the package, arguing that the aid scheme would not be limited to three years, but would be "installed indefinitely". The author of the study, Marcell Jeck, is quoted saying that "the public has been assured that the EU cannot borrow above a maximum of €60 billion. In the legal text no such regulation can be found." In addition to the €60 billion package, EU leaders have also agreed to create a €440bn fund for any EU member state needing a bailout. However, the CEP's paper did not address the legality of this second, larger fund.
The study adds that the EU has unjustly invoked a Treaty clause designed for "exceptional circumstances" as a legal base for the bailout fund and that the European Parliament was not consulted, which amounts to a breach of EU law. The report also suggests that the bailout package does not satisfy the term of the German Constitutional Court's previous rulings, as it does not provide a strong enough role for the German Parliament in approving aid.
Eurozone rescue fund looks for top credit rating;
Stelzer: EU more interested in fighting fiscal deficits than democratic deficit
The FT reports that officials representing the eurozone's €440bn sovereign rescue fund will begin meeting with credit rating agencies today, in a bid to secure a top rating for the fund.
ECB President Jean-Claude Trichet said yesterday that he does not believe Europe is facing another period of recession, adding: "I have no problem with austerity, rigour. I call this good budgetary management", reports the Irish Independent.
Meanwhile, Saturday's Independent reported that Hungary is to ask the IMF and the EU for a 'precautionary' two-year financial rescue package worth between €10bn and €20bn.
Writing in the WSJ Irwin Stelzer looks at the eurozone debt crisis and argues: "The question now is what is to be done that both ensures the survival of the euro and is also politically feasible. On one thing the eurocracy agrees: it must not trigger an amendment to the Lisbon Treaty, lest voters be given another chance to let their masters know just what they think of the European Project, and torpedo it. Less kindly put, fight fiscal deficits but maintain the EU's democratic deficit at all costs."
In a review of a new book by Jean-Claude Piris, Director-General of the legal service of the European Council, for the FT, Tony Barber writes: "it seems increasingly likely that the [Lisbon] treaty will not be the final word on what is often termed 'the European project' or 'the construction of Europe'."
Member states push to delay EP vote on new financial regulations;
Barnier: EU seriously studying a ban on naked short-selling
The Irish Times reports that EU governments are pushing MEPs to postpone a key vote on the creation of a new pan-EU financial supervisor to supervise the insurance, banking and securities sectors, scheduled for Wednesday. Member states want more time to reach an agreement - as an early vote, before agreement was reached, would mean the legislation would go to a second reading, delaying the process and raising prospects that the new European authority will not become operational as planned in January 2011.
The FT quotes Eddy Wymeersch, Chairman of the Committee of European Securities Regulators, saying: "Previously these committees did not have legislative powers but in future [the new authority] will be able to enforce legislation. This will shift rule-making powers to a European level but the supervisory role will remain national".
Meanwhile, Bloomberg reports that EU Commissioner for the Internal Market and Financial Services Michel Barnier has pledged to strengthen EU regulation of financial derivatives - including credit default swaps and naked short-selling. "I never mentioned a ban, even though it's an option on which we are working on. We will consult, especially on naked short-selling. It's an option that we are studying with seriousness. I want transparency, control and standardisation", he said. Commissioner Barnier also said that the Council and the European Parliament are due to reach an agreement on the AIFM Directive in September.
Writing in the Guardian, Conservative MEP Dan Hannan cites Open Europe's recent debate, "The EU after the euro crisis: superstate or disintegration?", and argues that trying to label critics of the European Union as xenophobes is a "handy way of sidestepping criticism. And it puts a certain kind of Euro-enthusiast literally beyond argument."
CBI warns EU's proposed pensions rules could cost firms £500bn
The Sunday Telegraph reported that the CBI has warned that proposals set out in a European Commission Green Paper could force British firms to inject a further £500bn into their final salary pension schemes. The article notes that the rules would particularly harm Britain's economy because its final salary pensions - unlike those in many other countries - include indexation (increasing pensions in line with inflation). Under the proposals, pension schemes are likely to be required to adopt an adjusted version of Solvency II - the capital requirement regulation being implemented for insurers from 2012. Britain also already has a well-regulated system thanks to the Pensions Regulator, critics of the EU plans say.
The FT reports that the Commission will this week launch its discussion paper on pensions in EU member states, suggesting that raising the retirement age is a key part of pension reform. The article notes that the EU has wide-ranging powers when it comes to regulating pension funds, including the ability to introduce EU-wide laws on the subject.
UK debt chief hails results of remaining outside euro
The FT reports that Robert Stheeman, Chief Executive of the UK Debt Management Office, has said that the UK's bond market has been one of the best performing of the year because the country is safely outside the troubled eurozone and has its own currency: "We have an independent currency. It is one of the reasons why the UK has outperformed other bond markets."
Acting president Komorowski wins Polish election
Poland's acting President Bronislaw Komorowski won yesterday's Presidential election, receiving 52.6% of the vote, according to the BBC. The Independent reports that Mr Komorowski has reaffirmed his intention to oversee Poland joining the euro within five years.
In an interview with Polish TV channel TVP, Open Europe's Anna Grabowska commented on the election of the new President, saying "his election will be welcomed in Brussels because he is considered the most pro EU candidate of the two."
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A leader in the Guardian argues that "Everybody agrees the €50bn a year common agricultural policy is rotten. Everybody, in public, promises reform. Everybody, in private, is out for what they can get. The result is an economic and environmental disaster."
German government readies €80bn savings plan
The FT reports that Germany's cabinet will, on Wednesday, approve a 2011 budget with an €80bn savings programme as part of a four-year programme of spending cuts. Spiegel reports that a planned nuclear fuel tax by Finance Minister Wolfgang Schäuble, which comes as part of the draft, may be inconsistent with EU requirements, according to lawyers from Clifford Chance.
Meanwhile, writing in the Weekend FT, Christopher Caldwell, senior editor at the Weekly Standard, argued that the close election of German President Christian Wulff may not necessarily weaken Angela Merkel, suggesting that the government's unpopularity is more attributable to the "implosion" of the FDP coalition partners.
Belgian PM: EU financial transaction tax is inevitable
Reuters France reports that both France and Germany intend to put pressure on the Commission to accelerate the introduction of a tax on financial transactions. Le Figaro quotes Belgian Prime Minister Yves Leterme, whose country now holds the EU rotating Presidency, saying that an EU tax on financial transactions "is one of the ideas which will come true, sooner or later".
De Standaard quotes Belgian Finance Minister Didier Reynders making a distinction between a bank levy and a financial transaction tax, saying: "when we're talking about a financial transaction tax, then I think we should concentrate on ultra fast financial movements which don't create real value, such as short-selling".
Meanwhile, in an interview with Le Monde, French MEP Alain Lamassoure, Chairman of the EP Budget Committee, has said that, during upcoming budget negotiations, "We must open the - taboo - dossier of the EU budget's autonomous resources, in order to secure new revenues within the next five or ten years. In September, the Commission intends to assess the revenues expected from hypothetical autonomous resources, such as the revenues coming from the trading of greenhouse gas emissions rights and from the introduction of a bank levy".
EU stress tests to be published on 23 July
EUobserver reports that the results of stress tests on Europe's banks will be published on 23 July. "You will see that banks in Europe are solid and healthy," French Finance Minister Christine Lagarde said, according to the WSJ, adding, "I am not worried about my banks."
However, in the FT, Wolfgang Münchau writes, "I get the funny feeling that these tests are devised in such a way that the banks will pass them. But this is not going to help much. Since everybody knows that large parts of the banking sector are in deep trouble, a good pass result may bring the opposite of reassurance."
Foreign press paints Spanish EU Presidency as failure
El Mundo reports that the evaluation of Spain's term holding the rotating EU Presidency has been far from kind in the foreign media, with especially harsh criticism from France and Belgium. The French daily Liberation called Spain's Presidency "a failure" and criticised Spanish PM Zapatero for being "unable to propose anything to address the stagnation of sovereign debt."
EU clashes with China over trade 'barriers' to rival firms
The Telegraph notes that EU-Chinese trade relations are growing increasingly strained as China continues to refuse the creation of a level playing field for EU firms. Jacques de Boisseson, President of the European Chamber of Commerce in China, says he is worried about growing protectionism from both sides. The issue of how to deal with China is to be the subject of an EU summit this September, which will focus on trade ties to emerging economies.
Almost a quarter of London's homeless are from new EU states, according to a report by the Combined Homeless and Information Network.
Euractiv reports that German politician Nicola Beer is suspected of having committed voting fraud at the EU level by voting twice in a vote in the Committee of the Regions on controversial plans for a financial transaction tax.
The European Commission has released details of who received EU funds in 2009 in policy areas including research, education and culture, energy, transport and external aid.
In the Mail on Sunday, Adam Leyland, Editor of The Grocer, defended the paper's report that the European Parliament was planning to ban the sale of eggs by the dozen, writing that "We do not believe the European Parliament set out to ban such measurements. European legislation can be complex, vague, byzantine and open to different interpretation by different member states."
According to data published by Eurostat, more than 23 million workers (10% of EU population) in EU member states remained unemployed in the month of May. Spain and Latvia have suffered the most, each with unemployment near 20%.
In an interview with FAZ, German Defence Minister, Karl-Theodor zu Guttenberg has warned that "Afghanistan will never be completely stabilised" and that "Germany must expect more losses".
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.