Thursday, November 11, 2010

Open Europe press summary: 11 November 2010


Rocketing borrowing costs for Ireland and Portugal reignite fears of new eurozone debt crisis;
Barroso: EU is ready to bailout Ireland
European Commission President José Manuel Barroso said yesterday in Seoul that the EU has "all the necessary instruments in place now to support Ireland if necessary". Barroso's statement came after Ireland's borrowing costs on 10-year-bonds reached a record 8.64% - the highest level recorded since Ireland joined the single currency. In the Irish Times, columnist Sarah Carey writes: "We made mistakes, but the Germans haven't really helped - and keeping them happy has made things worse."

Meanwhile, EUobserver notes that fears of a new eurozone debt crisis have also been fuelled by Portugal, whose yield on 10-year-bonds has reached a record 6.8%. El País quotes Francesco Garzarelli, chief interest-rate strategist at Goldman Sachs, warning: "The likelihood of Ireland and Portugal entering an IMF-designed adjustment program funded by the European Financial Stability Facility has, in our view, increased". An article in the WSJ notes that the Greek government is lagging behind its targets on deficit reduction because of "anemic" tax revenue.

Writing in Die Zeit, ECB board member Lorenzo Bini-Smaghi criticises German Finance Minister Wolfgang Schäuble's plans to automatically punish bondholders in the event of future bailouts for ailing eurozone countries, arguing that such an arrangement "would lead to destabilisation of the markets in practice which will have serious consequences for the economies in the eurozone".

€411,000 dog fitness centre tops Open Europe's annual list of wasteful EU spending
Open Europe's annual list of examples of wasteful EU spending receives widespread media coverage across Europe. The list features €411,000 of EU funds spent on a dog fitness centre in Hungary to "improve the lifestyle and living standard of dogs", a €5.25m bill for MEPs' limousines in Strasbourg and a project designed to increase Austrian farmers' "emotional connection with the landscapes they cultivate".

Open Europe Director Mats Persson is widely quoted saying, "Despite the austerity measures sweeping Europe, huge amounts of money are wasted on projects which do nothing to help the EU economy to get back on track." He added, "There should be no talk whatsoever of budget increases until the problems with waste and mismanagement in the EU's spending programmes are stamped out once and for all."

The briefing is reported in the FT, Times, Telegraph, IHT, Sun, Mail, Express, Star and cited by Patience Wheatcroft in the WSJ. The list also features in Austrian dailies Kronen Zeitung and Heute, Czech daily MF Dnes, Finnish paper Iltalehti, Swedish daily Norrbottens Kuriren, Spanish regional La Voz de Galicia, on Le Monde's website, on L', on French BFM TV, Hungarian press agency MTI, Slovak agency Bumm, and on Bruno Waterfield's EUobserver blog.

Meanwhile, EU Commissioner for Regional Policy Johannes Hahn yesterday outlined proposals for regional spending post-2013 including a €15 billion fund to reward those member states that are most effective in using EU money.

European Parliament could compromise on a 2.9% budget increase in exchange for "political demands"
The European Parliament, the Commission and member states' ministers are today meeting to negotiate the 2011 EU budget. The FT reports that the European Parliament is expected to agree to cap the budget rise at 2.9%, as pushed by David Cameron and twelve other EU leaders. However, Alain Lamassoure, Chairman of the Parliament's Budget Committee, noted that this may come at a price, "We are ready to come very close [to Mr Cameron's position]," he said. But as a price for their support, he and other MEPs have set out political demands that could affect EU budget-making for years to come. Top of the list is a commitment to a "serious debate" about EU taxes.

BNR Nieuwsradio quotes Dutch MP Han ten Broeke saying, "If you look at the extra tasks [the European Parliament] has been given that doesn't necessarily mean more money is needed. It spends it on the wrong things."

Commission admits EU salaries will increase in 2011
Euractiv reports that the salaries of EU civil servants in Brussels will increase by 0.4% next year, European Commission officials told journalists yesterday, retracting a previous announcement that EU employees were set for pay cuts. The Commission added that after the 2.4% increase in the cost of living in Brussels the new figures nevertheless represent a 2% reduction in EU officials' purchasing power.

Open Europe's Stephen Booth was quoted saying, "When many countries are cutting back on public sector jobs and salaries, European taxpayers will see any increase in EU salaries as out of step with the economic climate. EU remuneration is already very generous and offers all manner of additional benefits that have been scaled back in national civil services".

Meanwhile, the Times reports that EU spending is also increasing for EU officials' pensions, rising by 6.3% to €1.29bn next year. The article notes that the Commission has a retirement age of 63 and an average annual pension of £54,385.

Douglas Murray: Cameron should pull UK out of EU's Galileo project
Open Europe's briefing on the rising costs of the EU's Galileo satellite project is reported by the Spectator's Douglas Murray, who writes that the study reveals "all too predictable results: incompetence and infighting were the least of it."  Murray tried to confirm Open Europe's figures with an EU spokesman but the answer was that it was still "too early to speculate in terms of amounts". Murray adds that, "Open Europe's projections for the EU have proved more accurate than the EU's before" and calls for Cameron to pull out of the endeavour as "the cost to the UK taxpayer for this political ineptitude has shot up from £385m to an impressive £3billion."

European Council President Herman Van Rompuy said in Berlin on Tuesday, "In every member state, there are people who believe their country can survive alone in the globalised world. It is more than an illusion - it is a lie." Open Europe's Siân Herbert is quoted in the Mail saying "The EU needs to act on citizens' concerns rather than dismissing them".

Conservative MPs cause Government discomfort on EU economic government
During a debate in the House of Commons yesterday, the Government faced criticism over plans to strengthen EU economic governance. Treasury Finance Secretary Mark Hoban insisted there was "nothing new" in the surveillance proposals, noting that the UK would be exempt from fines. However, John Redwood MP is quoted by PA saying, "This is a massive extension of European economic governance, and the UK has to comply with a lot of it."
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German MEP: Commission's new communication strategy "borders on megalomania"
An article in FAZ notes that the European Commission's new communication strategy - aimed at giving Commission President José Manuel Barroso greater media visibility - will see the introduction of teleprompters to make it easier for Barroso and other Commissioners to give detailed speeches. German Liberal MEP Silvana Koch-Mehrin is quoted saying that the Commission's new communication strategy "borders on megalomania".

EU money may have been spent on Elton John concert in Naples
Following a complaint from Italian MEP Mario Borghezio, the European Commission will investigate over €750,000 of EU structural funds allegedly spent by the Campania region to host Elton John's concert during the popular "Festa di Piedigrotta" in Naples, September 2009, Italian daily Corriere della Sera reports.

Meanwhile, the IHT reports that the former Slovakian government gave €600,000 to two football teams from EU programs to educate a few dozen Roma people and spent €1 million to teach leadership skills in a cabbage-processing plant. The stories came to light after a new Slovak government took power after elections last June.

Cecilia Malmström, the European Commissioner for Home Affairs, will next week unveil an internal security strategy that would allow the EU to set rules for the confiscation of criminal assets across member states, to analyse intra-European bank transfers and to set up an analysis centre for cybercrime.

In an interview with France 24, Turkish Prime Minister Recep Tayyip Erdogan has warned that "as long as we are not a member of the EU, the EU will not become a global actor."

Euractiv reports that Italy and Spain have blocked EU-wide patent talks, insisting that any patent should also be translated into their languages, not simply English, French and German.

In an article for European Voice, Derk-Jan Eppink MEP argues that he is against an EU tax "because it will offer the EU bureaucracy fiscal autonomy and allow it to feed itself. Since the Parliament does not protect EU citizens against profligacy, it will generate a spending spree beyond control."

In the Guardian, Timothy Garton Ash argues that Europe needs a common foreign policy in order to engage with China and Russia.


Angela Merkel is calling on G20 colleagues to co-ordinate plans for reducing national economic stimulus measures and, according to Deutsche Welle, describes "protectionism" as "the biggest danger for sustainable growth".

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