Tuesday, August 31, 2010

Open Europe press summary: 31 August 2010



Budget Commissioner continues to explore EU tax and defends pay increases for EU officials

In an interview with Les Echos, EU Commissioner for Budget Janusz Lewandowski has said that proposals for an EU-wide tax will be unveiled on 29 September. "In total, we are working on eight options. Some of them could create difficulties, such as the levy on financial transactions - which would affect especially London and Frankfurt - or the transfer of revenues from CO2 emissions auctions, which would be done at the expense of Eastern European countries [...] But the tax on aerial transport, for example, would be transnational by its own nature".


When asked about member states' calls for a reduced increase in the 2011 EU budget, Lewandowski commented: "I understand the difficulties of [European] Finance Ministers. But we must not necessarily cut the CAP or the cohesion policy [...] We need above all to reduce administrative expenditures [...] Member states have chosen to attack the increases in EU officials' salaries: targeting the established rights is not the good path, because then we run the risk of clashing with the European Court of Justice. We need above all to prevent the multiplication of new communitarian structures, which - once created - always call for more money and more staff".       


Meanwhile, Handelsblatt reports that Brussels dislikes the financial transaction tax proposed by France and Germany. The paper has seen a report by EU Taxation Commissioner Algirdas Semeta, which notes that such a tax could have "significant negative effects", as it risks increasing the costs for businesses and governments to finance themselves. Commissioner Semeta also points out that the tax would be unevenly distributed, with up to 70 percent of total revenues coming from the UK - while only 15 percent would be raised in Germany and almost nothing in the smaller member states.

Handelsblatt EurActiv


EU Foreign Minister will not participate in Middle East peace talks

It is widely reported that EU Foreign Minister Baroness Catherine Ashton will not take part in the next round of Middle East peace talks to be held next Thursday, due to a previously scheduled visit to China. Following criticisms from French Foreign Minister Bernard Kouchner - who said it would be a shame if no EU representative attended the talks - Lady Ashton's office defended her trip to Beijing asserting that "it regards the strategic collaboration between EU and China".  


Meanwhile, the News of the World reported on the perks awarded to staff in the EU's new foreign office, the European External Action Service (EEAS), which includes allowances for drivers, entertainment, school fees for children, daily subsistence, household allowance, ex-pat allowance, installation and resettlement allowances. Open Europe's Siân Herbert was quoted saying: "In these tough times, taxpayers' money could be better spent than on lavish perks for EU diplomats in exotic destinations".

News of the World Express


European Arrest Warrant: British antiques dealer sentenced to four years in prison in Greece for selling broken pottery pieces to a visiting dealer in the UK

Saturday's Telegraph reported that an antiques dealer, Malcolm Hay, has been sentenced to four years in prison by Greek authorities under the European Arrest Warrant (EAW). Mr. Hay sold hundreds of broken pottery pieces to a visiting dealer from Athens in 1999 and was arrested by UK police after an EAW was issued claiming the items he sold had been stolen from the Greek state. The apparent crime, "illicit appropriation of an antique object", is not even an offence under British law, the article reported. Mr Hay successfully fought extradition after a magistrate in the UK ruled the alleged wrongdoings happened in Britain and shouldn't have been subject to an EAW.


However, a trial went ahead in Athens and Mr. Hay, represented by a local lawyer, was found guilty and jailed for four years. He has appealed against the verdict and is awaiting a hearing later this year. If he loses the appeal, the extradition process will begin again.


Meanwhile, the Sunday Telegraph noted that unlike some other member states - for example Germany which has a rule stating that only serious crimes can be processed and the EAW - the UK has no safeguards in place to protect British citizens against abuses of the EAW. Karen Todner, a leading extradition lawyer, was quoted saying: "It is typical of us not to have given ourselves proper protection. British judges apply the EAW treaty to the letter and these massive injustices come about because the Government hasn't thought this through".



European Commission plans Barroso-centred communication "revolution";

Communication with citizens "can work only if Commission is perceived as the EU's government"

EurActiv reports that the European Commission is considering an overhaul in its communication strategy. The planned communication "revolution" will aim to achieve greater centralisation of public communications, and a higher degree of "personalisation" of EU policies around Commission President José Manuel Barroso.  A source close to the Commission is quoted arguing that the credibility and the success of the EU project "can work only if the Commission is perceived as the EU's government. We can achieve this by centering our communication on the figure of the [European Commission's] president". The source went on to say: "If the German government announces a project, it is [German Chancellor Angela] Merkel's project. In France, it would be [French President Nicolas] Sarkozy's plan. We have to do the same in Brussels".



Three federations of Dutch pension funds warn that enduring low ECB interest rates threaten Dutch pension system 

Belgian daily De Standaard reports that economists have warned that the current low level of interest rates fixed by the European Central Bank (ECB) could pose a threat to Dutch pension funds and insurers, as they struggle with contracts promising annual returns of 3.75 percent and more, while long term interest rates are lower, even up to 2.13 percent in Germany.


Last week, three federations of Dutch pension funds warned the Dutch Parliament that "if interests remain so low, this will undermine the pension system", according to NRC Handelsblad. Their demands to relax capital standards were rejected by the Dutch government. Fourteen Dutch pension funds could have to cut on their obligations for the first time ever, bringing about a 14 percent loss for 150,000 new pensioners. The Dutch Central Bank argued that pension funds were themselves to blame for lax business policy.

Standaard NRC NRC 2 FD Telegraaf Trends IPE 


Confidence in eurozone increases but ECB fears impact of a US slowdown

Businesses and consumers' confidence in the economy in both the eurozone and the whole EU continued to improve during August although confidence remains unevenly spread across the bloc, according to a monthly survey published by the European Commission on Monday. The FT reports that The European Central Bank (ECB) is expected this week to extend emergency support for eurozone banks until early next year, amid fears that the eurozone might take another hit in case of  a big US or global slowdown. The ECB will also consider whether it should reactivate its controversial government bond purchasing scheme launched in May.

FT EUobserver Le Monde Zero Hedge


Handelsblatt notes that Germany has to expect a huge decrease in EU subsidies for its Eastern Länders. From 2014 on, the EU will reduce its funding of Eastern Germany by up to 65 percent, costing Germany billions of euros and raising Germany's net contribution to the EU budget by 50 percent to a total of €12 billion.



EUobserver reports that former EU Industry Commissioner Gunther Verheugen set up his own public relations consultancy for small and medium-sized enterprises in April, only two months after he officially left his Brussels job.

EUobserver Wirtschaftswoche


In an interview with Italian daily Corriere Della Sera, European Commission's President José Manuel Barroso said that "more coordination among Member States [is] the only credible way to exit the crisis", adding that only through "higher budgetary control and stronger sanctions and incentives it will be possible to achieve stability and growth".  Barroso also defended the euro arguing that the crisis would have been even tougher in the absence of the single currency.

Corriere della Sera


Shoppers across Europe are panic-buying the last remaining stocks of old 75W light bulbs before they are banned throughout the EU next week, Saturday's Telegraph reported.



In the FT, Wolfgang Münchau looks at Germany's growth rate, arguing that due to various strains within the eurozone, "Germany's economic strength is likely to be persistent, toxic and quite possibly self-defeating in the long-run".

FT: Münchau

Handelsblatt reports that controversial remarks on immigration and Jewish people by Bundesbank Board Member Thillo Sarrazin could frustrate Bundesbank President Axel Weber's ambitions to succeed to Jean-Claude Trichet as ECB President next year.

Handelsblatt Guardian NY Times


EurActiv reports that French Foreign Minister Bernard Kouchner - who is a former high profile humanitarian activist - has said he considered resigning in the wake of the controversy over the repatriation of Roma carried out by the French government. Meanwhile, the European Commission is due to hold a high-level meeting with the French government later today to discuss the controversial repatriation of the Roma.

European Voice FT: Caldwell EurActiv El Mundo


EUobserver reports that during his state visit to Rome, Libyan leader Muammar Gaddafi said the EU should consider giving Libya "at least €5 billion a year" in order for it to halt the flow of EU-bound migrants.

EUobserver Les Echos


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