Friday, November 05, 2010

Open Europe press summary: 5 November 2010


Nick Clegg: Coalition will not "reopen this issue of the repatriation of powers" from EU
In an interview with the FT, Nick Clegg, UK Deputy PM and leader of the Liberal Democrats, has declared that the Coalition Government would not use the negotiations over a new EU treaty to repatriate powers from Brussels to London, through a referendum. "We are not going to reopen this issue of the repatriation of powers. We are not proposing to go backwards", he said. However, Clegg warned that the UK's cooperation must be matched by serious reforms of the budget and the way EU business is conducted. "There is no interest for the EU in getting entirely on the wrong side of public opinion on this budget issue...They have got to get real. You can't make these budget decisions in a political vacuum", he said.

Economist: Britain may have to make concessions to win support for "sensible" EU financial regulation;
HSBC boss warns company might re-consider London location over EU bonus rules
The Economist looks at the EU's new financial supervisors and features Open Europe's graph showing that while the UK is home to roughly 36% of the EU's wholesale finance market, it will have the same voting weight within the new financial supervisors as all other member states under simple majority rules. The article notes, "Although Britain has the largest stake in getting the new rules right, it will have no more say in drafting most of them than countries with far less economic interest in the outcome. In the tortuous world of Brussels horse-trading, Britain may have to make concessions on all sorts of side-deals to win support for sensible regulation of one of its main industries."

Meanwhile, the Commission will today publish its various proposals for stricter regulation and supervision of credit rating agencies (CRAs), including ideas for encouraging either the ECB or national central banks to issue ratings, and a special liability regime at the EU level so that CRAs can be sued for incorrect decisions. The Commission also proposes that CRAs should be obliged to give countries several days' notification of rating decisions, so that struggling eurozone countries, in particular, have time to point out any factual errors and take measures.

Outgoing HSBC Chief Executive Michael Geoghegan has said that the company will review the location of its London head office next year, amid concerns over new EU rules on bonuses and George Osborne's £2.5bn bank levy.

Ireland's borrowing costs hit record highs for fourth day running;
Brittan: "If something is unsustainable it will not be sustained"
The cost of insuring Ireland's government debt against the risk of default has hit a record high for the fourth consecutive day, forcing the Irish government to introduce budget cuts twice as severe as originally planned, according to the FT. On his Telegraph blog, Ambrose Evans-Pritchard notes, "The spreads over German Bunds are mimicking the action seen in Greece in the final hours before the dam broke."

Meanwhile, the FT reports that Franco Frattini, Italy's Foreign Minister, has lashed out at France and Germany for trying to "pre-cook" agreements for the rest of the EU, citing the recent Franco-German deal on treaty changes to the rules of the eurozone. According to Mr Frattini, Italy and other governments would oppose substantial changes to the Lisbon Treaty requiring ratification by parliaments or national referendums. "That would open a Pandora's box," Mr Frattini said. EUobserver quotes Czech Prime Minister Petr Necas saying his country's rules for approving an EU treaty change were "very complicated."

European Voice reports that the ECB warned yesterday that the proposed sanctions for those breaking debt and deficit limits still gave too much discretion to politicians.

In his Economist column, Charlemagne argues, "Re-opening the EU treaties may be an understandable bid to appease the red bogeymen of [the German Constitutional Court in] Karlsruhe. But it could yet release the even scarier ghouls, goblins and ogres of the bond markets." Writing in the FT, Samuel Brittan argues, "Euro-federalists will fight tooth and nail to prevent a disintegration of the eurozone. They are powerfully reinforced by banks with investments in the peripheral countries. But if something is unsustainable it will not be sustained. Currencies have left monetary unions in the past, a recent example being Ireland's departure from the UK monetary union in 1979."

New plans could make it harder to veto deployment of EU border guards
European Voice reports that EU interior ministers on Monday will discuss a new proposal which would strengthen Frontex, the EU's border management agency, by establishing a reserve of border guards to respond to surges in illegal migration. The article notes that, under the new proposals, once the initial commitment has been made, governments would be able to veto their deployment only in exceptional circumstances.

In a comment piece for the Express, columnist Frederick Forsyth argues that, "If the Government really wanted to stand up for the British it could moderate the savage European Arrest Warrant, the ruinous Working Time Directive, the impudent European Investigation Order and the now compulsory extension of both paternity and maternity leave, which will drive many small businesses to the wall".

Germany has accused the US of breaking a promise on monetary policy made at the G20 summit in Toronto in June by injecting a further $600 billion into its economy to stimulate growth.

European Agriculture Commissioner Dacian Ciolos has said last month's EU budget review poses no threat to the future size of the EU's farm policy. "I think the review is very clear that the common agricultural policy (CAP) must remain a strong policy with a strong budget," he said.

The European Parliament will discuss changes to the 'Citizens' Initiative' next week - with a view to setting a lower threshold for required signatories to make it easier to use.

EU-Info Deutschland reports that, according to a new study, only 4 out of 14 major European car manufacturers have met the emission targets set forth by the EU in 2008.


Obama drops cap and trade for carbon emissions
Following the US mid-terms, AP reports that US President Barack Obama has dropped cap and trade plans to limit global warming gases, quoting him saying that "Cap-and-trade was just one way of skinning the cat; it was not the only way." According to Europe Online-Magazine Rainer Bruederle, German Minister for Economy and Transport, has warned the EU that implementing new environmental goals without international cooperation will be harmful to economic growth.

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