Tuesday, September 14, 2010

Open Europe press summary: 14 September 2010


Government announces 'referendum lock';
47% of British voters say they want to withdraw from the EU
The Express cites the recent YouGov poll, which found that 47% of British voters would vote in favour of the UK withdrawing from the EU if a referendum on the issue were held.

Meanwhile, Europe Minister David Lidington yesterday announced the Government's plans for a 'referendum lock' that would give UK citizens a say on any future proposals to transfer major powers from Britain to the EU. He said: "The lock would cover any proposed transfers of competence - the EU's ability to act in a given area - between the UK and the EU; and transfers of power, such as the giving up of UK national vetoes and moving to majority voting in significant areas, such as in Common Foreign and Security Policy". He added: "Treaty changes which do not transfer competence or power from the UK to the EU would not be subject to a referendum. For example, Accession Treaties".

Backbench Conservative MPs have argued that the lock is "worthless" as parts of the Lisbon Treaty are self-amending.

Writing on the Spectator's Coffee House blog, Open Europe's Mats Persson argues that the referendum lock is significant because "new crises, situations and politicians' egos will always drive the need for another treaty and further integration". He adds: "The coalition's pledge is also an important victory of principle over the EU elite, which turned its back on the people after the French, Dutch and Irish 'No' votes to the EU Constitution".

However, Mats argues that the referendum lock "needs to be strong enough to withstand any attempts to bury difficult questions", such as the transfer of justice and home affairs legislation to the jurisdiction of the European Court of Justice. "By any definition, this involves a transfer of powers, as EU judges would have the final say over those laws", he argues.

Mats also argues that the decision on what constitutes a 'transfer of powers' cannot be left to the discretion of ministers or ministers' legal advisors but must be independent. He adds that the "self-amendment" provisions in the Lisbon Treaty should be neutralised by subjecting the Lisbon Treaty's ratchet clauses to the referendum lock or an Act of Parliament.

EEF: The UK Government must not exempt EU legislation from its deregulation agenda
The UK manufacturers' organisation EEF has released a report urging the Government to abandon plans to exempt European legislation from its "one-in, one-out" deregulation agenda, noting that EU employment and environmental legislation are central to the problem of increased regulation and rising costs, reports the Telegraph. A survey conducted by EEF shows that "52% of manufacturers see regulation as an obstacle to growing their business. They rated regulation as the second worst aspect of the UK business environment behind taxation".

The EEF report refers to Open Europe's research revealing that regulation has cost the UK economy £176 billion since 1998, with EU derived law, employment and environmental regulations accounting for 56% of the costs introduced by EU legislation. EEF criticises the European Commission's Smarter Regulation agenda which "is focusing on reducing the number of directives rather than the costs they impose". The report calls for the EU to set up an independent body to scrutinise legislation, like the Regulatory Policy Committee (RPC) established by the UK Government last year.

Guy Verhofstadt MEP wants Commission to take the lead on economic governance
EurActiv looks at proposals for economic governance, with finance ministers agreeing the so-called "European semester" last week, which will see budget forecasts presented to the Council and the Commission for peer review. Open Europe's Vincenzo Scarpetta is quoted saying, "Our view is that the semester will have very limited impact as without clear sanctions for those who break the budget rules, the whole mechanism lacks teeth. But tougher measures would be very difficult to achieve politically". 

A separate EurActiv article notes that leader of the liberal group in the European Parliament Guy Verhofstadt has said that proposals for economic governance should be put forward by the Commission, not Council President Herman Van Rompuy's task force.

Meanwhile, Handelsblatt reports that Germany has complained about the slow pace and the limited scope of the reforms of economic governance and budgetary surveillance. Werner Heuyer, Minister of State at the Foreign Office, is quoted saying that "the EU must show a unified and determined position when it comes to making our common currency stable in the future".

NRC Handelsblad notes that a report by Tjeenk Willink - a Dutch politician who was asked to consult the parties involved in the formation of the new coalition government - has warned that the new cabinet may have to seek alliances from outside the coalition to reach agreement on EU issues, especially with regard to stronger budget surveillance rules.

Barnier backs introduction of Eurobonds to finance EU policies
In an interview with Euractiv France, Internal Market Commissioner Michel Barnier announced his support for Eurobonds as a means of financing European policies. "The idea of Eurobonds must be considered, as well as developing lending opportunities for large, structural long-term projects", Barnier said. He added: "We must also pool more national policies - as we have done with agriculture successfully and efficiently. I am particularly thinking about research, transport and space policies, which are at the moment juxtaposed".

Meanwhile, Die Presse reports that the Austrian government has also rejected the idea of creating Eurobonds, arguing that the EU should not be allowed to create any debt. The Austrian Finance Ministry is quoted saying that "in the Treaty on the Functioning of the European Union, Article 310 clearly states that the revenue and expenditure shown in the budget shall be in balance". The introduction of Eurobonds would therefore require a Treaty change.

It is widely reported that the European Commission has said that it now expects the eurozone economy to grow by 1.7% this year. That compares with the 0.9% growth predicted at its last set of forecasts in May.

Banks' reliance on ECB liquidity and new purchases of government bonds show eurozone is under strain
The FT reports that evidence is growing that "addiction" by banks in eurozone countries such as Portugal, Ireland and Greece to European Central Bank liquidity support remains high, and may even have increased. The ECB bought €237 million of government bonds last week - the biggest amount since the middle of August - in a sign of continuing problems in the eurozone.

Meanwhile, the FTD reports that the transition period for the implementation of new capital requirements under the Basel III agreement is expected to be very long, as it could last until 2023 for non-quoted banks.  

French Europe Minister: "The French people are the guardian of EU Treaties, not the Commission"
EUobserver reports that yesterday EU Commissioner for Home Affairs Cecilia Malmström expressed strong concerns about the leaked memo revealing that the French Immigration Ministry had targeted Roma camps as a priority in its campaign to expel illegal immigrants from the country.

The Nouvel Observateur reports that French Europe Minister Pierre Lellouche hit back at the criticism saying: "France is a big sovereign state. We are not at school [...] I have no intention of being treated, on behalf of France, like a schoolboy. France is not standing before a tribunal". Mr. Lellouche is also quoted by EurActiv France saying that "the French people are the guardian of the [EU] Treaties", rather than the European Commission.

In a letter to the FT, Chief Executive of the British Private Equity and Venture Capital Association Simon Walker argues that "it is essential" that provisions within the EU's proposed AIFM Directive that "amount to an investment ban are struck down".

Dutch Court of Audit warns against Commission's proposals for new financial accounting rules
Accountancy Nieuws reports that the Dutch Court of Audit has sent a letter to the Dutch Parliament complaining about European Commission proposals to change financial accounting rules within the EU. According to the proposals, it would no longer be necessary for a Dutch Minister to declare that EU funds in the Netherlands have been spent in the correct way.

The FT reports that the Commission is expected to extend the obligation of large telecoms operators to provide network access to competitors when it lays out its new high-speed broadband regulatory plans next week.

Le Figaro reports that Hungary will be ready to join the euro in 2014 or 2015, according to Hungarian Secretary of State Mihaly Varga.

PA reports that a UK company director has been sentenced to four years imprisonment for theft and fraud offences after stealing £121,425 from his company. These funds had been paid by the European Commission to coordinate a research project.
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The EU is expected to extend anti-dumping duties in place since May on imports of Chinese-made aluminium car wheels. The WSJ reports that the duties will also be raised to 22.3% from 20.6%.    

EUobserver reports that eight candidates have already put themselves forward for the influential position of permanent head of the EU's most sensitive intelligence institution, the Joint Situation Centre (SitCen). From 1 December the body will become part of the European External Action Service (EEAS).

In an official statement, EU foreign ministers have asked Bulgaria and Romania to take urgent actions to tackle crime and corruption in order to meet EU standards in both these areas as soon as possible.

De Standaard reports that European Council President Herman Van Rompuy and EU Foreign Minister Catherine Ashton will today know if they will be given the right to speak on behalf of the EU at the United Nations General Assembly. The article suggests that France and the UK would be quite pleased if the request were rejected.

European Voice reports that the Italian Government has come under pressure on its refusal to sign off the EU-Korea free trade agreement. Belgian Foreign Minister Steven Vanackere has said that he hopes Italian Prime Minister Berlusconi will eventually lift the veto during the European Council summit to be held next Thursday.

Le Monde has filed a lawsuit against French President Nicolas Sarkozy's office, claiming that it used the country's counter-intelligence services to chase after the sources quoted under anonymity by the paper in its reports on the recent bribing scandal involving the French President. 

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.