Thursday, October 28, 2010

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.