Tuesday, October 19, 2010

Open Europe press summary: 19 October 2010


Germany and France agree on new EU Treaty to change eurozone rules by 2013
Following a meeting in France, French President Nicolas Sarkozy has backed calls from German Chancellor Angela Merkel for changes to the Lisbon Treaty in order to provide for an "orderly handling" of future sovereign debt crises in the eurozone. The arrangements would include the possibility for countries to restructure their debts with private sector involvement, and the suspension of voting rights in the Council of Ministers for countries which violate the EU's budget rules. FAZ quotes Angela Merkel saying that "in the future creditors will be part of the reparation."

In a joint statement, Sarkozy and Merkel said: "France and Germany believe that it is necessary to revise the [Lisbon] Treaty." The revision should be aimed at "establishing a permanent and robust mechanism to ensure an orderly resolution of crises in future [...] The necessary amendments should be adopted and ratified by member states in accordance with their respective constitutional rules in due course by 2013."

In return for Sarkozy's backing, Merkel agreed to give governments six months to bring their deficits within the 3% limit before incurring a fine - widely seen as a major German concession. Sanctions would still kick in automatically after six months unless the Council overturned them with a qualified majority.

Open Europe's Mats Persson is quoted in the Telegraph saying, "This is potentially a hugely significant development. The coalition will simply have to call a referendum should these new powers for the EU spill over to Britain. But this also represents an ideal opportunity for the UK to ask for powers back in return for allowing the eurozone to restructure, since the UK government will hold a veto over any treaty change [at the level of all 27 member states]."

A leader in FT Deutschland criticises Merkel, arguing that "rarely has a government [...] started off so ambitiously, in order to so early, so fast and so fundamentally give in." The article goes on to argue: "The Germans have bowed to French pressure to agree that EU countries should be allowed a say on sanctions against budget sinners in the future. That the French President Sarkozy has given up his resistance against changing the EU Treaty is little consolation", as passing a Treaty will take too long.

Meanwhile, AFP notes that EU Commissioner for Economic and Monetary Affairs Olli Rehn said yesterday that Greece may need to adopt further austerity measures to meet deficit reduction targets agreed for next year under the €110 billion bailout package.  
Commission's budget review includes option to end UK rebate;
Europe Minister: European Parliament's demands for 6% increase in next year's budget are "outrageous"
The European Commission will today unveil its proposals for a review of the EU budget after 2013. The Times reports that the Commission's plans include an option to end the UK rebate in its present form. The article notes that senior figures in Brussels have admitted that the timing of the review is appalling, since it comes on the eve of the biggest cuts of any modern British government. The review will also include proposals for the introduction of an EU tax. 

Meanwhile, Reuters reports that UK Europe Minister David Lidington has said that the European Parliament's demands for 6% increase in next year's EU budget are "outrageous" and cannot be "in the slightest bit justified." He went on to say that MEPs "are getting out of touch with the peoples of Europe. I think they need to wake up and actually realise the kind of world that we are living in." A leader in the Sun argues: "Britain faces steep cuts, why should we accept the EU's demand for our contributions to this circus to rise?" 

An article in the Guardian notes that the UK and France will "resume their fierce battle over hedge fund regulation" at today's meeting of EU finance ministers in Luxembourg.

The Mirror reports that UKIP MEP Godfrey Bloom has urged the European Parliament to rethink plans to extend maternity leave in the EU to 20 weeks at full pay. The proposal will be voted on tomorrow. If adopted, the new rules would cost the UK £2.5 billion per year.

Euractiv reports that a financial tax is no longer on the European Commission's agenda for the November G20 summit in Seoul.

The Mail reports that the European Commission is set to back the sale of meat and milk from the offspring of cloned farm animals despite widespread opposition from consumers.

EUobserver reports that MEPs on the EP's Legal Affairs Committee have scrapped a proposal for the European External Action Service (EEAS) to hire set targets of people from new member states.

Euractiv reports that the Commission will tomorrow propose a 'crisis management' system for cross-border banks, which would force banks to comply with EU rules on how to wind down their operations.

Le Monde reports that Greek Immigration Minister Christos Papoutsis has called for the EU to help Greece cope with illegal immigrants who enter the country through Turkey.

Writing in the IHT, US permanent representative to NATO Ivo H. Daalder argues that "dialogue between NATO and EU political bodies is, for all practical purposes, nonexistent. Coordinating strategy - or discussing how decisions by one organisation might affect the other - happens haphazardly, if at all."

Writing in Le Monde, French MEP Alain Lamassoure - who chairs the European Parliament's Budget Committee - argues that European defence "is, par excellence, the domain in which pooling national resources would allow for substantial savings."

Le Monde reports that EU Justice Commissioner Viviane Reding will today announce that no infringement procedure will be opened against France with regard to repatriations of Roma people.

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