New Open Europe briefing: EU supervisors represent a risk to City of London;
Barnier: No-one will escape EU financial regulation and supervision
EU Finance Ministers will meet today and tomorrow in Brussels and are expected to endorse the creation of three new EU supervisors to regulate the banking, insurance and securities sectors in the EU. Ahead of the meeting, Open Europe has published a report arguing that the new EU supervisors could help to improve supervision of cross-border banks and that a 'single rulebook' for the Internal Market could benefit the City of London. However, at the same time, the voting arithmetic within the supervisors - where most decisions will be decided by simple majority - leaves the UK in an unusually weak position to block unwelcome proposals. This, in turn, could expose the City to interventions from countries which don't share the UK's view of financial markets.
Open Europe's Director Mats Persson is quoted in the Telegraph arguing: "The proposals clearly represent a shift in powers from the UK to the EU level, and go beyond what was originally envisioned and the UK had pushed for. The EU supervisors will be given the mandate to interpret, apply and even enforce EU laws at the expense of national regulators in several key areas".
In an article for Handelsblatt, the paper's EU correspondent Ruth Berschens welcomes the new EU supervisors, arguing that it could lead to simpler and more unified regulations across the EU. However, she also notes that just as the Bundesbank lost power to the European Central Bank (ECB) after the creation of the Eurozone it now loses even more power to the European Banking Authority (EBA) in London.
Meanwhile, Il Sole 24 Ore quotes EU Commissioner for Internal Market Michel Barnier arguing: "Since the crisis is worldwide, more coordination is needed between European and national level monitoring, especially on derivatives and naked short-selling. The Commission will present its proposal on these matters on 15 September". Barnier is also quoted by CNBC saying: "No actor, no product, no sector, no territory should no longer be able to escape sensible and intelligent regulation and supervision".
EU Finance Ministers will also discuss the possible introduction of an EU-wide levy on financial transactions. According to the Observer, UK Treasury sources said that Chancellor George Osborne could be prepared to back a financial activity tax on bank profits and bonuses, which would be returned to national treasuries, while he remained wary of a broader "Robin Hood" tax on financial transactions, which is thought to harm the City of London's competitiveness and the UK's financial sector in general.
EU Budget Commissioner: UK rebate is no longer justified
In an interview with Handelsblatt, EU Budget Commissioner Janusz Lewandowski has said that "the British rebate [on the EU budget] has lost its original justification", arguing: "The structure of the EU budget has changed substantially. Farm subsidies - the main reason for the rebate - have decreased, while the per-capita income of the UK has increased substantially since the 1980s". He went on to say: "There will be very difficult negotiations [on the next EU financial framework]. We will need the acceptance of London in order to come to a result. My role in this business is that of an honest broker", noting that there is currently a "very big distance" between the stances of EU finance ministers and MEPs on future increases of the EU budget. Mr. Lewandowski also stressed that "the level of farm subsidies in 2020 has to be lower than today, in order to free more money for research, development and global ambitions".
Meanwhile, Commission Vice-President Antonio Tajani is quoted by Repubblica saying he prefers Eurobonds to an EU-wide tax as a means to fund the EU budget directly.
David Cameron urges Ashton to rein in EEAS budget
The FT reports that David Cameron has urged Catherine Ashton, the EU's new foreign policy head, to rein in the budget for the EU's new foreign service, the European External Action Service, in line with member states' austerity cuts. The call comes in response to Baroness Ashton's request in July for an extra â¬9.5m to hire an additional 80 senior-level staff.
Finance Ministers to agree Van Rompuy's plans for economic government;
Belgian EU Presidency calls for common bonds "to harmonise budget policies"
EU finance ministers over the next two days will also discuss tighter EU budget supervision and proposals for EU economic government tabled by Council President Herman Van Rompuy's taskforce. The Sunday Telegraph reported that Yves Leterme, the Belgian Prime Minister and current holder of the rotating EU Presidency, wants to give the EU the power to issue bonds and also reinforce fiscal integration. "This should evolve into a European debt agency able to issue debt for all member states. Everybody will gain from the mechanism," he said. He added, "This will be a very effective tool to harmonise budget policies, but the way ahead may be very tough."
DPA notes that the so-called "European Semester", which will see member states submitting their budgets to the Council and Commission for peer review, will be the first result of Van Rompuy's working group to be decided on. The use of sanctions to enforce the EU's budget rules is still under discussion. French Minister Christine Lagarde said that "the goal is to enforce the system, especially with sanctions, but also with incentives and encouragement for the member states." ORF quotes European Commissioner for Monetary Affairs Olli Rehn saying that "Sanctions should become a normal, almost automatic consequence which countries must expect if they repeatedly breach the rules and burden their European partners with risk". He will present a package of sanctions on 29 September.
FAZ quotes Finnish PM Mari Kiviniemi saying "she is almost sure" that further measures to reinforce EU economic government will be decided upon in the autumn and that "Finland thinks that necessary changes will first have to be done within the framework of the Lisbon Treaty (...) Although just as Germany we don't exclude changes to the Lisbon Treaty".
Meanwhile, Die Welt quotes a high ranking diplomat saying that "Germany is very isolated" in its demands for a Eurozone insolvency procedure for struggling member states. Proposals for a bank and financial transaction tax will also be discussed, although no final decisions on that are expected.
EU spends over â¬8 million entertaining, training and 'informing' journalists in 2009; MEPs to be fined if they fail to attend Barroso's three hour State of the Union address
European Commission President JosÃ© Manuel Barroso's new communications policy, including the first 'State of the Union' address to be held tomorrow, has attracted widespread criticism from the press. In the Sunday Telegraph, Open Europe's SiÃ¢n Herbert was quoted saying: "Spending money on improving Barroso's image is the latest in a long line of EU vanity projects funded by the taxpayer... Instead of paying for photos and videos of an unelected Commission President, the EU could radically improve its image by actually starting to listen to citizens and stopping wasting their money." The article also reported that MEPs will be "fined" around â¬60 if they do not sit through Barroso's entire three hour State of the Union address.
Meanwhile, the Parliament reported on Friday on a study by Open Europe revealing that in 2009 over â¬8 million was directly spent on entertaining, training and 'informing' journalists. This included spending â¬351,800 on Irish journalists and Lisbon Treaty related seminars in 2009, possibly in the run up to the referendum, â¬710,000 on journalism competitions and prizes and â¬7,500 on two cocktail parties.
An article by the Parliament today reports that a spokesman for Barroso has hit back at critics saying: "I can reassure you: the state of the union speech is not to 'improve Mr Barroso's image.' The president frankly has more important things to do, as people in Europe are rightly looking for guidance and directions out of the crisis from their politicians and political institutions".
German economist: Leaving eurozone "least terrible" option for Greece;
Blanchard: Competitiveness imbalances in the eurozone "will not disappear overnight"
The Telegraph reports that Hans-Werner Sinn, head of the IFO Institute in Munich, has said that Greece's austerity measures cannot prevent default and will lead to a breakdown of the political order if continued for long. "All the alternatives are terrible but the least terrible is for the country to get out of the eurozone, even if this kills the Greek banks," he said. Meanwhile, the Guardian reports that ECB President Jean-Claude Trichet has said that exit from the eurozone would be the "worst possible option" for Greece.
Writing in the FT, Wolfgang Munchau argues, "Yes, it is possible that Greece will get through this crisis, and repay all of its debt. But it is far more likely that parts of peripheral Europe will end up only repaying parts of their debt". Writing in City AM, CNBC's Guy Johnson argues, "It will not be too long before Germany doesn't need its Eurozone partners and certainly won't want to pay for their problems any longer".
In an interview with Le Figaro, Director of the IMF Research Department Olivier Blanchard looks at the latest data on economic growth in the euro area and argues that a common exchange rate and a common monetary policy imply that the existing competitiveness gap between eurozone countries "will not disappear overnight".
EU working time rules contributing to junior doctor drop outs
The front page of the Times reports that almost a quarter of junior doctors drop out of their NHS training after two years, according to the first survey since the EU's Working Time Directive imposed a cap on their working time to 48 hours a week. Of those who apply to continue their training, more than a fifth are turned down because they lack the necessary skills or experience. Remedy UK, the junior doctors' pressure group, said that the Directive had resulted in a generation of graduates receiving "minimal and sketchy exposure to 'real medicine'."
A leader in the paper argues, "The cap on hours is a disaster in the making. It is increasing workloads, aggravating stress, disrupting training and diluting the skills available for patient care. It is a near-textbook case of well intentioned but ill conceived regulation whose effects can be measured in the departure of hundreds of junior doctors to other countries".
EU funded project to monitor "abnormal behaviour" increases secrecy in response to criticism
ORF reports that following widespread criticism of the EU funded project INDECT, which includes the "monitoring of various people clusters and detection of abnormal behaviour and situations of danger", INDECT's Ethics Board have decided to reduce the amount of public information available, citing a "possible threat to the reputation of the parties involved".
In an interview with Le Monde, former Prime Minister Tony Blair argues: "Nowadays, the only way to success for countries like France and the UK is to join their forces in the economic, political and military domain within the European Union. If we achieve that, then we will have enormous potential at our disposal".
The Irish Times reports that more than 20,000 applications from Irish farmers for the EU Single Farm Payment (SFP), worth â¬1.4 billion annually, have been found to contain errors.
EU Trade Commissioner Karel de Gucht continues to face accusations of anti-Semitism after commenting on radio that it is "not easy to have, even with moderate Jews, a rational discussion about what is actually happening in the Middle East", reports the Guardian. De Gucht's office later issued an apology. EurActiv reports that a Commission spokesperson has insisted that they were "personal comments", which in no way represent the EU's point of view.
Bloomberg notes that in talks today and tomorrow the EU member states will be under pressure from the US to reduce the number of seats they occupy at the IMF.
The Sunday Express reported that NHS patients face having drugs withdrawn because EU rules allow drug companies to obtain exclusive licences and impose price rises.
EUobserver reports that Belgian socialist leader Elio Di Rupo resigned last Friday after failing to mediate an agreement on the formation of the next Belgian government.
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