Friday, October 29, 2010

Open Europe press summary: 29 October 2010


Merkel wins backing for "limited" change to Lisbon Treaty;
Spiegel: "Europe comes up against the Iron Chancellor"
EU leaders have agreed in principle to "limited" changes to the EU treaties in order to create a permanent crisis mechanism for the eurozone, which Germany has demanded should allow eurozone countries to default and force creditors to share the cost of any future crises. Deutsche Welle quotes German Chancellor Angela Merkel saying, "Everyone is in agreement that a limited change to the Lisbon Treaty is necessary." She added, "I can talk for Germany when I say that we have very much pushed our main intentions forward."

Merkel and French President Nicolas Sarkozy had also called for the suspension of voting rights of members who flout budget rules, which was unpopular with several smaller states and seems to have now been dropped. "If treaty change is to reduce the rights of member states on voting, I find it unacceptable, and, frankly speaking, it is not realistic," European Commission President José Manuel Barroso said.

Il Corriere della Sera notes that EU Council President Herman Van Rompuy has been given a mandate to "explore" possible options for Treaty change. He will present a report at the next European Council in December. Die Welt suggests that Merkel is seeking to extend the treaty clause, which allows financial assistance to be granted to member states as a result of "natural disasters", to include a provision for when the stability of the eurozone is threatened.

Le Figaro suggests that the changes could be adopted through the Lisbon Treaty's "simplified procedure", meaning that the amendments would be adopted by unanimity within the European Council bypassing the ratification process through national parliaments or potential referendums. Swedish Prime Minister Fredrik Reinfeldt is quoted by Deutsche Welle saying, "Many countries do not want a huge treaty reform, and therefore we are trying to narrow it down to a very limited treaty change that should be acceptable for countries without having to face referendums."

On his BBC blog, Gavin Hewitt argues, "[David Cameron] is instinctively opposed to treaty change for another reason. Some of his backbenchers may see it as an opportunity to try and claw back some powers to London." However, Die Welt reported last night that Cameron agreed to back the treaty changes in return for Chancellor Merkel's support for capping next year's EU budget increase at 2.9%. On Conservative Home, Open Europe's Director Mats Persson argues, "If true, Cameron may well have severely underplayed the UK's hand, missing the opportunity to get real concessions in return for treaty change. A one-year 2.9% as opposed to 5.9% budget increase, though important in face of budget cuts at home, is pocket change in comparison to what Cameron could have achieved."

Speaking on the BBC's Today Programme, Foreign Secretary William Hague said that Cameron had "secured beyond any doubt a full British opt-out from possible sanctions on individual member states and established that any possible future Treaty change would not affect the UK."

Meanwhile, the German press has declared victory for Merkel in Brussels. Spiegel reports that "Europe comes up against the Iron Chancellor", Die Welt states that "Merkel asserts her will in Brussels" and FT Deutschland declares, "Merkel wins at Euro-Poker".

Cameron gives up on EU budget freeze;
11 countries vow to cap increase at 2.9%
David Cameron last night gave up on his attempt to achieve a cash freeze to the 2011 EU budget. He instead reached a compromise, convincing 10 other EU leaders, including French President Nicolas Sarkozy and German Chancellor Angela Merkel, to sign a letter stating that national governments would not accept an increase to next year's EU budget above 2.9%. The 11 countries provide a 'blocking minority' in negotiations with the European Parliament, which wants a 6% increase. However, a 2.9% increase would mean a rise in the UK's contribution to the EU by at least £432 million next year.

The Mail reports on a poll conducted by Comres revealing that 73% of Britons do not believe the EU contribution is value for money. Open Europe's Mats Persson appeared on Sky News yesterday criticising EU expenditure noting that "if you look at the errors in the EU budget on the structural funds for instance [...] 11% of the funding paid out to member states should not have been paid out in the first place, according to the European Court of Auditors [...] That is not pocket change."

The Times reports that, according to a diplomat, President of the European Parliament Jerzy Buzek yesterday accused Cameron of being "anti-European" for calling for a budget freeze. In response, Merkel said: "I have just had to cut the German budget and that does not make me anti-German."

News of Cameron's agreement attracted strong criticism from former Party Chairman Lord Tebbit and a group of predominantly Conservative backbenchers. Cameron's concession could be a "ticking timebomb of Tory fury", according to the Times. British Foreign Secretary William Hague responded to the criticism saying that Cameron secured "an unprecedented agreement by establishing the principle that the EU budget should in future reflect the spending cuts being made by national governments."

Hungarian Prime Minister Viktor Orban has revealed that, at an official lunch ahead of the EU summit, French President Nicolas Sarkozy said that EU Justice Commissioner Viviane Reding had "insulted France as a nation" when she dismissed Franco-German demands for Treaty change as "irresponsible", AFP reports.

Political analyst Giorgos Kirtsos is quoted by Le Figaro reacting to yesterday's announcements that the estimates on Greece's public deficit will be reviewed up to 15% from 13.6%. "It is impossible to pay back the €110 billion borrowed from the EU and the IMF in only three years. We will have to restructure our debt", he argues.

House of Commons Library: Up to half of British laws come from Brussels
The Telegraph reports that new research conducted by the House of Commons Library has shown that the UK Parliament adopted last year 3,050 new laws related in some way to the EU - 53% of the total passed. However, the study specifies that only some of the laws have a direct impact on the "daily lives of citizens or businesses", while others do not. Open Europe's Director Mats Persson is quoted arguing: "Our research, based on the Government's own figures, shows that in 2009 59% of the regulatory costs facing individuals, businesses and the public sector in the UK stemmed from EU legislation. This is a far more useful measure than merely counting individual laws without any sense of their relative importance - and it shows that the EU now has a massive impact on the UK."

Two articles in the Mail cite Open Europe's report on EU quangos, noting that costs have tripled since 2005 and are due to reach £2.1 billion in 2011. Open Europe is quoted saying: "Several agencies simply duplicate the work of each other, in addition to duplicating the work of the core EU institutions and member states' organisations. Some of these bodies have no real impact on actual decisions while others deal with issues which are better handled nationally or regionally."

MEPs endorse £783,000-a-year "heritage label" for historical sites and monuments
The Telegraph reports that the European Parliament's Culture Committee yesterday gave its backing to proposals for the introduction of a "European heritage label" to mark sites and monuments which "have played a key role in the history and/or the building of the EU." An annual budget of £783,000 over six years has been earmarked for the project, meaning a total cost to UK taxpayers of almost £640,000. Conservative MEP Syed Kamall is quoted saying: "The UK is right to indicate its disinterest in this vain attempt to force a common European identity. If the EU insists on going ahead with this unnecessary idea, it should be at no additional cost to the British taxpayer." 

In a comment piece, FT Deutschland editor Sarah Speicher-Utsch writes that, three years after its implementation, the Markets in Financial Instruments Directive has failed to achieve its goals. "Investment banks are the ones that profit most from the alleged grand-directive. The private investors have benefited less from the new regulations", she argues.

In an interview with Le Monde, EU Justice Commissioner Viviane Reding has said that the French government "remains under surveillance" on its expulsions of Roma people. 
No link

An article in the Times notes that, in a bizarre twist of fate, the headquarters of the new European External Action Service will be located in the "Hague" wing of the Triangle building in Brussels. The EEAS headquarters will occupy almost all of the 60,000sqm office space, at an annual cost of €12 million.

De Telegraaf reports that Dutch Asylum Minister Gerd Leers has said that the Netherlands could close its borders for seasonal workers coming from outside the EU, if the new government is not satisfied with new EU rules on the issue.

La Repubblica reports that Italy is at risk of fines from the European Commission for failing to comply with a 2004 ruling from the European Court of Justice regarding the clearance of three landfill sites in the neighbourhood of Milan. 

According to the European Commission's statistics office Eurostat, unemployment rate in the eurozone was 10.1% in September.

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: or call us on 0207 197 2333.

Thursday, October 28, 2010

Yitzhak Rabin

Shimon Peres Came to Power Over Rabin's Dead Body
I met Yitzhak Rabin in the Israeli Parliament in 1982 during Hanukkah. I was able to talk with him briefly and mention I was associated with Ambassador College in Pasadena, California.

Avishai Raviv, Eyal, and Yitzhak Rabin
Avishai Raviv was an Israeli government agent provocateur (whose code name was "Champagne" for the bubbles of incitement he created to tarnish the right-wing Israelis) who goaded Yigal Amir to assassinate Israeli Prime Minister Yitzhak Rabin (although this is hotly disputed by investigative reporters like Barry Chamish)...

Vatican Linked to the Assassination of Yitzhak Rabin?
The dark powers of the European Union, under evil influence of the very real German-Jesuit cabal, are intent on ripping out the heart of Israel and sacrificing Israeli sovereignty to their wannabe divine emperor about to take the world by storm, pimped by the sorcerer-pope.

Open Europe press summary: 28 October 2010


Cameron under pressure to seek concessions under any new EU treaty;
UK may be forced to accept £430m increase to budget contribution next year
Open Europe has published a new briefing outlining the challenges facing David Cameron at the EU summit today and tomorrow, with Franco-German calls for EU treaty changes and the EU's 2011 budget dominating the negotiations.

The Prime Minister said yesterday that a treaty change would not affect Britain. He told MPs: "From our point of view we are not in the euro; we are not planning to join the euro, and so any treaty change wouldn't apply to us." However, he came under pressure from Conservative MPs to use any treaty negotiations to repatriate powers from Brussels. Former Cabinet minister Peter Lilley said that a new treaty would give Cameron the "ideal opportunity". He challenged the Government to promise that support for a treaty change "will not be given without obtaining concessions in return, that we will not give that support without demanding a price".

All member states, including the UK, have a veto over any treaty changes so Cameron is in a position to call for concessions. Although a treaty change is not inevitable, due to other member states' misgivings, German Chancellor Angela Merkel told German MPs in the Bundestag yesterday that "success will only come with a change to the treaty...improvement is always possible, even if the road is rocky."

Europe Minister David Lidington told BBC Radio 4's Today programme this morning that Cameron will be concentrating on the EU budget at the summit. "What he's going to be focusing on is saying that whether it's 2011 or the more important long-term deal over the European budget, this is really something that deserves the highest priority among the leaders of all member states," Lidington said.

Cameron is seeking help from other member states to "freeze or cut" next year's budget. However, articles in the FT, Guardian, Telegraph, Mail and Express suggest that he may have to accept a 2.9% increase at the very least. This would increase the UK's contributions to the EU budget by £430m or more.

The Times suggests that Cameron's long term aim is to secure a ten year freeze to the EU budget. Cameron told the Commons yesterday that "The key is the next financial [budget round] - that's the best way to control the budget. We need to build allies for that, we need to build our argument for that and we need to make sure that Europe starts to live within its means."

However, backbench MPs are likely to question this approach, since the UK already has a veto over the next EU budget period. Open Europe's Siân Herbert is quoted in the Express arguing that taxpayers would not forgive Cameron if he failed to achieve a freeze to next year's budget.

Van Rompuy: "I don't have any voters. And I also prefer readers to voters"
Belgian daily Metro reports that European Council President Herman Van Rompuy has presented his new book, called "Inside the world of Herman Van Rompuy". Commenting on his Presidency at the book presentation, he is quoted saying "I don't speak here as a politician but as a free man. I don't have any voters. And I also prefer readers to voters".
Metro Nieuwsblad Knack GVA

Reuters reports that a Eurostat revision of the Greek budget will show the 2009 budget gap above 15% (higher than the initial 13.6%). The IHT notes that the revision makes a restructuring of Greek debt more likely.

Camilla Cavendish: Cameron should demand more than a budget freeze; "It is time to reform the EU"
Writing in the Times, Camilla Cavendish argues that, "Flying in to Brussels for the European summit today, David Cameron is reminded to score a budget freeze in exchange for backing the Germans. He should demand more. It is time to reform the EU, not just to deflate its budget temporarily." Looking at the structure of the EU budget, Cavendish argues that Cameron should follow Open Europe's recommendations and repatriate EU regional spending.

A leader in the paper argues, "David Cameron has said that he will fight very hard to get the EU budget under control. There is no reason to doubt his strength of feeling or determination. Yet the [proposed budget increase] is not merely a mistaken financial calculation. It is an indication of a dogged lack of sympathy on the part of the institutions of the EU for the British taxpayer - philosophically as well as financially."

On his BBC blog, Gavin Hewitt notes that, "Two days of painful horse-trading lie ahead. For David Cameron the difficulty will be explaining to the British people why he had to compromise on the budget - if he doesn't come away with a freeze."

The BBC's Nick Robinson suggests that Cameron will not be able to dodge the question of EU treaty changes, writing that, "The coalition agreement hammered out by the Eurosceptic Tories and the Euro-enthusiast Lib Dems is summed up by both sides as 'not forward, not back'. In other words, moving nowhere much at all. The problem is that when the Prime Minister calls Chancellor Merkel and President Sarkozy and President Van Rompuy today he'll be reminded that France and Germany don't want to stand still - they never do."

The Sun argues, "Sooner or later, the moment comes for every Prime Minister to stand up to the EU...Today it is David Cameron's turn to confront Brussels."

In an interview with El Mundo, Justice Commissioner Viven Reding said that France and Germany are "doing a lot of damage to the EU" and treaty change would be "suicidal".

€12 million per year in rent for the EU's new foreign service headquarters
The front page of the Times reports on yesterday's "surprise" announcement by Baroness Ashton, that the expensive Triangle building in Brussels has been selected for the headquarters for the EU's new foreign service - the European External Action Service. This will cost €12 million per year in rent from 2012. Ashton's office claims that the new headquarters will actually reduce expenditure as the current offices cost €24 million per year.

Open Europe is quoted saying:  "At a time of austerity, any new expenditure of the EU's diplomatic service must be carefully weighed against the benefits it generates for taxpayers and citizens...taxpayers will ask what the added value of this new headquarter is."

Meanwhile, a second article in the Times criticises the profligacy of the EU budget noting that 500,000 British civil servants may lose their jobs, however the EU will employ 118 more staff in the EEAS, 118 in the European Parliament and 72 in the European Council next year. The budget for 14 European schools, educating the 22,550 children of the EU's employees, is also proposed to rise by 13% to €173.5mn a year. Average annual cost per student is €11,835. Two new schools are planned for 2012.

The "social clause" in the EU's new Single Market Act divides Commissioners
EU Internal Market Commissioner Michel Barnier unveiled yesterday a first draft of the Single Market Act, a package of 50 separate proposals relating to the EU's single market. The Irish Independent reports that the text includes plans to consolidate the corporate tax-base across the EU. Swedish news site Europaportalen notes that a clause which would have strengthened the right to strike over the right of freedom of movement was at the last minute deleted from the Act - but the proposal still makes a reference to the right to take collective action.

Barnier is quoted by AFP admitting that there were "different feelings" within the Commission over how strong the "social clause" in the Single Market Act should be. Het Financieele Dagblad notes that European employers are still concerned about Barnier's plans, fearing more stringent rules for posting workers abroad. A series of proposals based on the act will be tabled starting from next February, with a view to turning them into law by 2012.

EU to make a Brussels studio for Euronews
European Voice reports that EU Justice Commissioner Viviane Reding announced yesterday 25 new measures "to improve the daily life of EU citizens". The list of measures includes plans to ensure "more sustainable financing of Euronews", the TV channel entirely dedicated to information on EU affairs. "The building up of a Brussels studio for Euronews will be encouraged", the Commission said in a press release.

The Telegraph reports that business groups have written a letter to David Cameron urging him to block "burdensome" new European Union rules on maternity leave.

The EU's General Affairs Council has urged the EU institutions to cut back on the number of officials allowed to take early retirement with full pension rights, reports European Voice.

According to L'Express, an internal document prepared by EU Tax Commissioner Algirdas Semeta says that the Commission expects Open Europe "to publish a list of 'absurd' EU projects" on the eve of the publication of the EU Court of Auditors' yearly report, due for 9 November.

In an op-ed for Handelsblatt, Luxembourg's Foreign Minister Jean Asselborn argues that proposals which aim "to impose sanctions by decree on member states would be poison for Europe". He is in favour of creating a permanent crisis resolution mechanism for the eurozone.  

Le Figaro reports that the European Commission has urged France to partially modify its so-called "fiscal shield", a system ensuring that no French citizen pays a yearly income tax higher than 50%, saying it is discriminatory.

Euractiv reports that Liberal group leader Guy Verhofstadt warned that the European Parliament was determined to use its new powers under the Lisbon Treaty and would not let EU economic governance plans be "diluted" by Germany and France.

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: or call us on 0207 197 2333.

Wednesday, October 27, 2010

Open Europe press summary: 27 October 2010


EU Commissioner: Franco-German calls for treaty change are "irresponsible";
Commission seeks eurozone crisis mechanism without treaty change;
The creation of a permanent crisis resolution mechanism for eurozone countries will be discussed at the European summit this Thursday and Friday, following Franco-German calls for EU treaty change to enable struggling eurozone countries to default. The Mail and the Express report that comments from Downing Street that David Cameron may agree to treaty change in return for a one-year cash freeze on the 2011 EU budget has attracted widespread criticism from Conservative backbenchers, who have called for Cameron to repatriate powers. Open Europe is quoted by Euractiv saying that the prospect of a new treaty constitutes "a once-in-a-generation opportunity to renegotiate the UK's relationship with the EU" and bring powers back from Brussels.

Meanwhile, EU Economic and Monetary Affairs Commissioner Olli Rehn said yesterday that the Commission would "by far" prefer introducing a permanent crisis resolution mechanism without treaty change. He added that Germany's proposal to suspend voting rights within the Council for countries in breach of EU rules on deficit and debt "is not necessarily in line with the idea of ever closer union."

In an interview with Die Welt, EU Justice Commissioner Viviane Reding said that Franco-German calls for Treaty change are "irresponsible". Reding is quoted in Le Figaro saying that "decisions [in the EU] are not taken in Deauville, but at 27 and by unanimity". She goes on to argue: "France and Germany are the two countries who scuttled the first version of the [Stability and Growth] Pact in 2004 and 2005. The euro has undergone a severe crisis since, but it seems like someone has not yet drawn the lesson...We must stop destroying what the EU institutions propose."

French Europe Minister Pierre Lellouche is quoted by AFP saying that Reding's declarations are "unacceptable".  "When you are a European Commissioner, and moreover Vice-President of the Commission, is it conceivable that you call the President of the French Republic and the Chancellor of the Federal Republic of Germany 'irresponsible'?" he argued.    

Focus quotes German opposition party SPD Vice-Chairman Axel Schaefer saying plans for a treaty change are a "mirage" as all 27 member states must agree to them. In the WSJ, Terence Roth argues: "A permanent crisis management facility may prevent another mortal threat to the euro-zone project. So if the eurozone's top two national leaders are to go down in defeat on their bid to reopen the treaty, they might as well do so in a worthy cause."

An opinion piece in Die Zeit suggests that while France and Germany often lead Europe, "what is the point, if the two-stroke engine runs so fast that it breaks down the body of the EU-vehicle?" The newspaper compares the proposed Franco-German request to being "like trying to persuade a round of alcoholics not only to abstain but to also understand the need to fine them, should they drink again."

Open Europe eurozone debate in Berlin: German MPs warn that 'EU solidarity' doesn't extend to constant wealth transfers from North to South
Open Europe yesterday hosted a debate in Berlin in cooperation with the Bertelsmann Foundation, discussing how the eurozone crisis has affected Germany's relations with the EU. German Green MP Manuel Sarrazin argued that Germany has benefited from the introduction of the single currency, but that continuous transfers of money from stronger to weaker eurozone countries made in the name of "European solidarity" are not a viable solution in the long term.

Open Europe Vice Chairman Derek Scott pointed out that the least expensive solution for Germany would be leaving the euro. Otherwise, Germany may face perpetual payments to deficit countries. German Liberal MP Frank Schäffler noted that "there is a misunderstanding in the concept of [European] solidarity" and that EU law is being broken "in a manipulative way" to support cash-strapped eurozone countries. He also said that Greece will not regain competitiveness while it is in the "chains" of the euro.

A more extended write up will be available on our events page later today.

Final deal reached on the AIFM Directive;
Xavier Rolet: London Stock Exchange at risk from "jealous" regulators in Europe
EU finance ministers and MEPs have reached a compromise deal on the EU's AIFM Directive on hedge fund and private equity managers. The proposal will by 2018 give the Commission and the soon-to-be created European Securities and Market Authority the right to decide whether funds and managers based outside the EU should be granted EU-wide market access.

Open Europe Director Mats Persson was quoted in the Mail saying that the compromise deal would be less damaging than the plans originally proposed by the Commission. But he warned of the risk that the EU's new powers on market access could in future be hijacked by protectionist forces, which would have "a negative impact on growth and investment in Europe at a time when we can least afford it". Mats is also quoted by The Parliament.

Meanwhile, the Telegraph reports that the French Chief Executive of the London Stock Exchange Xavier Rolet has warned MPs that the LSE is at risk from "jealous" regulators in Europe.

Open Europe's Pieter Cleppe was interviewed by German television ARD yesterday, criticising the spiralling cost of the EU's Galileo satellite project, which Open Europe research shows will cost European taxpayers €22bn over 20 years.

Markets spooked by prospect of Greek election
The Telegraph reports that Greek PM George Papandreou has said he will call national elections if his party fails to win upcoming local elections. The main opposition group - New Democracy - has not yet confirmed if it would honour the conditions of the EU-IMF €110bn bailout plan. A socialist rebel candidate opposed to the terms of the bailout currently leads the polls for the Athens region. Yields on 10-year Greek bonds jumped 31 basis points to 9.57%.

Meanwhile, Ireland's government said yesterday that budget cuts of €15 billion are needed over the next four years, double the amount previously expected, in order to meet EU targets, reports the WSJ.

Proposed EU rules on gender discrimination could increase women drivers' insurance premiums by 25%
The Mail reports that research commissioned by the Association of British Insurers reveals that the proposed EU directive on gender discrimination could see costs rise for women drivers by as much as 25% while pension payments made to men would decrease.

AFP reports that EU agriculture ministers met yesterday in Luxembourg. France, Italy and Germany rejected the abolition of direct aid to farmers.

On his BBC blog, Gavin Hewitt argues: "The idealism, the grand projects, the dreams of ever closer union have lost their appeal to a new generation. The memories of war have faded. The Cold War has been consigned to history. The great expansion of democracy to Eastern Europe is over. Increasingly Europeans approach the EU like any other institution and ask what is it delivering, what is it for?"

An editorial in Le Monde looks at the future of the European External Action Service and argues: "If the [EU's] diplomatic service is to avoid bureaucracy and stalemate it will have to be first and foremost realistic: it will not be the tool of a Europe 'which speaks in a single voice' or of the 'Europe puissance' imagined by the founding fathers."

The WSJ reports that EU officials say they hope to pressure China into conceding more openness and access to public procurement contracts for European firms.

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: or call us on 0207 197 2333.