Europe
Merkel hints that Germany may come to Ireland's aid;
Former Bundesbank President: Eurozone bailout would open a Pandora's Box
EUobserver reports that German Chancellor Angela Merkel has given the strongest signal to date that Germany may come to the rescue of struggling eurozone economies, specifically mentioning Ireland. "We have shown solidarity and that will remain so. We should use Sunday's summit [in Brussels] for member states affected to give an honest report of their situation," she said yesterday at a press conference in Berlin.
The article notes that while Merkel refused to be drawn on the exact nature of financial support, she made it clear that action to tackle excessive budget deficits would be a stipulation for receiving aid. She indicated such action could be carried out under Article 100 of the Maastricht Treaty that allows financial assistance to be given to countries experiencing "difficulties caused by natural disasters or exceptional occurrences beyond its control."
The Irish Times reports that German officials admit assistance for several EU members, including Ireland, is all but inevitable. They are now 'brainstorming' possible options and are considering making individual preconditions for each aid recipient. The paper notes that that help for Ireland could be conditional on changes to its corporate tax regime.
Speaking at the LSE yesterday, Karl Otto Pohl, former President of Germany's Bundesbank, said that if Germany decided to bail out other members of the eurozone it would open a Pandora's Box. He said, "It would be like jumping in a swimming pool without water". However, he rejected the idea that the eurozone might break up, saying that for struggling members, "There is no way out". He said that struggling eurozone members would have to change their domestic policies and live with stagnant wage levels until they regain competitiveness.
He added that any bailout of European governments should fall at the door of the International Monetary Fund (IMF), adding that the institution's resources had to be doubled or even trebled in order to deal with the crisis.
A separate EUobserver article notes that the Nordic Council of Ministers is sceptical about any proposal to issue 'eurobonds', which would see the sale of bonds guaranteed by all 16 members of the eurozone. Danish Prime Minister Anders Fogh Rasmussen said, "We should not water down national responsibility in financing public debt." Germany has also expressed its opposition to the proposal, which is supported by Italy, Luxembourg and the IMF.
Meanwhile, the BBC reports that the banking sectors of central and eastern Europe are to get a 24.5bn euro rescue package to support them in the economic crisis. The European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) and the World Bank have pledged the investment.
The Telegraph notes that capital markets have become increasingly wary over proposals to use the EIB as "an all-purpose fireman to prop up weaker regions of the eurozone or come to the rescue of Eastern Europe". The borrowing cost on the EIB's 10-year bonds has risen to 90 basis points above the benchmark German Bunds, suggesting that investors already suspect the bank will be used to issue "EU bonds" for rescue purposes - whatever its original mandate.
The article notes that although there is no EU treaty mechanism for the sort of 'EU bond' proposed by Italy's Finance Minister Giulio Tremonti, "The EIB could take on the role quite easily with a tweak to its mandate and little creativity by EU lawyers."
Irish Times EUobserver FT Telegraph FT 2 FT: Topolanek Telegraph: Hannan blog SKY EUobserver 2 Telegraph: Evans-Pritchard blog BBC WSJ: Kerry Figaro Les Echos WSJ FTD Guardian
Le Monde: "ECB facing a bill of over 1 billion euros due to bankrupt banks"
Le Monde reports that bankrupt banks have left the European Central Bank facing a bill of over 1 billion euros which must be shared between national central banks. Reportedly, Germany's Bundesbank was one of the worst affected by its dealing with Lehman Brothers, and the Luxembourg and Dutch central banks had suffered from the collapse of Icelandic banks.
Le Monde FTD Guardian FAZ FT AFP
Verheugen: "I belong to those in the EU who are against a centralised state. I want independent nation states. I do not want a super-state"
During his visit to Ireland, EU Industry Commissioner Gunther Verheugen told members of the Oireachtas Committee on Foreign Affairs that, "I belong to those in the EU who are against a centralised state. I want independent nation states. I do not want a super-state".
Fianna Fáil TD Michael Mulcahy told Verheugen that "You guys in the European Commission and in the European Central Bank have got to roll up your sleeves," and take various measures that he said would help Europe out of the economic downturn, including the creation of a "bad bank" to absorb toxic assets. Verheugen responded saying that the ECB is independent under the EU treaties, while also warning against protectionism: "We can't reverse globalisation. It wasn't imposed by China, or India. It was the western industrialised countries that have imposed it on them. We have forced developing countries to open up their markets, so we should not complain. It wasn't foreseen that it would create very strong competitors."
Irish Times
New poll: Reducing immigration and the EU's powers should be top priorities of incoming Conservative government
A Daily Telegraph/YouGov survey published today shows that 52 per cent of voters said they wanted a future Conservative government to make its top priority reducing immigration. 62 per cent of Conservative backers and 42 of Labour voters wanted a cut in immigration.
In second place amongst the priorities came reducing the power of the EU and providing more to help families is third.
The poll also shows that in overall support the Conservatives are on 41 percent, down two on last month, and Labour on 31, down one point. The Liberal Democrats polled 15 per cent, down one. When asked who would make the better Prime Minister, 25 per cent said Gordon Brown, down two, and 33 per cent David Cameron, also down two.
Telegraph EurActiv
EU students failing to pay off university loans say Conservatives
The Telegraph reports that 1,580 out of 2,240 students from outside the UK who should have started repaying loans have failed to hand money over. The Conservatives branded the system used to track down foreign graduates "shockingly ineffective". So far, 46,000 students have borrowed £130m.
Telegraph EU Referendum blog BBC Mail
FIFA's 6 + 5 rule does not conflict with EU law, says independent report
The Institute for European Affairs (INEA) has issued a report, commissioned by FIFA, which argues that there is "no conflict in European law" on the free movement of workers with the idea of restricting foreign players in football teams. The 6 + 5 rule established that a football club must field at least six players in any match who would be eligible for the national team of the club's country.
Guardian Times Telegraaf IHT Belfast Telegraph Sun
Schengen could impede Guantanamo prisoners' resettlement
European Voice reports that the Schengen agreement could cause a problem for the possible acceptance of any former Guantanamo prisoners from the US. Detainees accepted by a country within the 25-member Schengen bloc would be able to travel unimpeded to other states in the Schengen zone. Jacques Barrot, the European Commissioner for Justice, Freedom and Security has said the co-ordination between member states is essential and that "there are legitimate doubts that have to be aired because of Schengen".
The 2008 US State Department report on human rights has highlighted issues within several countries including ethnic discrimination in the Belgian labour market and abuses against Roma in nine EU countries.
European Voice EUobserver
Hannan: Alleanza Nazionale to join EPP
On his Telegraph blog, Dan Hannan reports that the Italian Alleanza Nazionale party will join the EPP in June, as part of Silvio Berlusconi's new political movement, Il Popolo della Libertà . He goes to say that ten years ago, suggestions that the Conservatives were in talks with the Alleanza Nazionale were met with newspaper stories that they were in "secret talks" with "neo-fascists". He argues that "I'm waiting for all those Guardianistas and BBC pundits and Labour MPs who have spent the past decade telling us how awful the 'neo-fascists' are to turn their fire against the EPP. Having made clear that the Conservatives should in no circumstances sit with so loathsome a party as the Alleanza Nazionale, they will presumably now demand that we leave the EPP. Won't they? Or am I missing something?"
Telegraph: Hannan blog
EurActiv reports that EU Budget Commissioner Dalia Grybauskaite is to run for the Lithuanian Presidency, with the backing of the current Prime Minister. She will reportedly take a leave of absence until the first round of elections on 17 May, and her portfolio will be assigned to another Commissioner.
The Parliament EurActiv Open Europe blog
Both the FT and the Times have a letter from the MP Bill Cash, in which he argues that the de Larosiere report calling for a European supervisory scheme for banks and financial institutions is "potentially disastrous" for the City of London. It also quotes a report which argues that the EU's Financial Services Action Plan may cost the City up to 23.5 billion pounds.
FT: Letters Times: Letters
US Secretary of State Hilary Clinton is to meet with officials from the EU Presidency, Council of Ministers and European Commission on a visit to Brussels next week.
European Voice
Writing on European Voice Borut Grgic, the founder of the Institute for Strategic Studies, argues that, instead of travelling to Central Asia to secure gas supplies like Russia and Iran, "Europe organises energy conferences - one after the other... Europe's problem is that there are too many cooks, that it does too much talking and too little acting."
European Voice
Austria and Luxembourg have declared that they will resist attempts to crack down on banking secrecy, despite calls from other EU states including Germany and the European Commission for stricter rules to tackle tax evasion.
European Voice
In an article in Le Monde Luc Chatel, French Secretary of State for Industry and Consumption, argues that France's policy of supporting the automobile sector is "not protectionist" and "on the contrary" should be considered "an asset for Europe".
Le Monde
Eurotopics reports that five other EU states in addition to Slovenia are blocking Croatia's accession talks to the EU.
Eurotopics
Caroline Flint, Britain's Minister for Europe, has warned Labour MPs and trade unions that their campaign against companies which recruit "foreign workers" and undercut local pay levels is playing into the hands of the BNP.
Independent
Greece, Cyprus, Malta and Italy are asking for urgent help from the European Union to deal with illegal immigration as their respective Ministers of the Interior have said they are unable to contain the large flow of migrants from other parts of the Mediterranean.
Le Figaro
In an interview with the FTD Polish PM Donald Tusk has cricitised state spending by the big member states, saying "the whole festival of big plans and big numbers which one can hear every couple of days makes me nervous", adding that "in Poland we know that a life on credit doesn't lead to anywhere".
FTD
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: openeurope.org.uk or call us on 0207 197 2333.
Friday, February 27, 2009
Thursday, February 26, 2009
Burnt offering debate?
The Holocaust isn't Kosher
Debating the Holocaust: A New Look At Both Sides
by Thomas Dalton , Ph.D
**********************
Everybody should feel free to question whatever they want, including the holocaust (Hebrew shoah/burnt offering) or whether or not Obama is a natural born citizen. Furthermore, even Jewish law, biblical law, knows our Great Creator God doesn't accept human burnt offerings (Judges 11:29-40) - they're pagan and treif (unclean, not kosher) - although the God of Israel respects martyrdom (The Suffering Servant) and honors the death of His Suffering Servant (Yeshua is the Suffering Servant), so why persist in polluting such a word? Especially when the vast majority of Jews did not offer themselves as sacrifices for any cause or reason. They were marked for death simply for being Jews. Some got swept away due to circumstances beyond their control, suffering for the irresponsibility of others, especially their bloody leaders (Miriam Weiss: Holocaust Survivor and Kibbutz Mother). Other Jews failed to save themselves by taking the warnings they were given seriously or were just plain hypocrites (WHAT IS WRONG WITH THE RABBIS?.
Don't call it the holocaust: from now on call it Hitler's war against the Jews, attempted genocide, ethnic cleansing, or just plain old persecution since too many Jews downplay or deny or are ignorant about the ethnocentric aspects of the Bible and Judaism.
Debating the Holocaust: A New Look At Both Sides
by Thomas Dalton , Ph.D
**********************
Everybody should feel free to question whatever they want, including the holocaust (Hebrew shoah/burnt offering) or whether or not Obama is a natural born citizen. Furthermore, even Jewish law, biblical law, knows our Great Creator God doesn't accept human burnt offerings (Judges 11:29-40) - they're pagan and treif (unclean, not kosher) - although the God of Israel respects martyrdom (The Suffering Servant) and honors the death of His Suffering Servant (Yeshua is the Suffering Servant), so why persist in polluting such a word? Especially when the vast majority of Jews did not offer themselves as sacrifices for any cause or reason. They were marked for death simply for being Jews. Some got swept away due to circumstances beyond their control, suffering for the irresponsibility of others, especially their bloody leaders (Miriam Weiss: Holocaust Survivor and Kibbutz Mother). Other Jews failed to save themselves by taking the warnings they were given seriously or were just plain hypocrites (WHAT IS WRONG WITH THE RABBIS?.
Don't call it the holocaust: from now on call it Hitler's war against the Jews, attempted genocide, ethnic cleansing, or just plain old persecution since too many Jews downplay or deny or are ignorant about the ethnocentric aspects of the Bible and Judaism.
Open Europe press summary: 26 February 2009
Europe
De Larosiere report calls for a pan-European advisory council on financial risk;
Commission calls for restructure of "zombie banks"
European Voice reports that Jacques de Larosiere's report on financial regulation, published yesterday, calls for the President of the ECB to chair a proposed European Systemic Risk Council (ESRC), a pan-European advisory council on financial risk. The report stopped short of calling for a single market regulator which would have been "unrealistic". The Irish Times reports that the ESRC would comprise of ECB governors, national supervisors from the financial sectors, and a representative from the EU Commission.
In addition, the report calls for a new European System of Financial Supervisors, made up of three committees covering banking, insurance and securities, according to the IHT. The Irish Times reports that these would be existing committees, which would be transformed into new authorities: the European Banking Authority, European Insurance Authority, and European Securities Authority. EUobserver reports that they would gain new powers to issue licenses to credit-rating agencies, which could be revoked following poor performance.
According to the IHT, the report's authors have indicated that the City of London would, to some extent, be supervised by a pan-European watchdog.
The Guardian reports that the Commission has recommended that banks weighed down by toxic assets should be wound down or restructured. Internal Markets Commissioner Charlie McCreevy said, "If we don't face up to this issue then we risk prolonging this crisis with zombie banks that are incapable of performing a useful role in our economies."
The FT reports that the Managing Director of the German agency responsible for issuing German debt, Carl Heinz Daube, has rejected the possibility of a joint European bond, citing "different debt management systems and no common fiscal policy."
WSJ IHT Telegraph EUobserver FT FT: Leader Irish Independent FT: Brussels blog BBC: Mardell blog European Voice EurActiv Telegraph 2 Telegraph: Leader FT 2 FT 3 Bruegel EurActiv 2 Irish Times
Chris Davies: MEPs allowances are "like a birthday present that arrives every week"
Lib Dem MEP Chris Davies has an article on the BBC website arguing in favour of increased transparency in the European Parliament, following revelations that MEPs could add 1m pounds to their family income over a five-year term from allowances alone.
Davies notes that under current rules MEPs are not required "to produce any receipts to justify use of the office budget. A signature to support a claim for the daily Brussels subsistence allowance (266 pounds) doesn't guarantee that any work is done. And the travel allowance? Well, it can be like a birthday present that arrives every week."
He goes on to argue that, "The [European] Parliament is far from toothless...individual MEPs can have a great deal more legislative influence than their counterparts at Westminster. Their actions can change the law of the land in 27 countries, not just one, and the lobbyists know this very well indeed." Arguing that rules for both allowances and conflicts of interest need to be changed, he notes "First point of call for anyone seeking to know whether a parliamentarian has a financial interest that may sway a vote will be the Register of Interests." But that, "Procedures in Brussels trail a long way behind those now established at Westminster."
According to Sueddeutsche Zeitung, EU fraud often remains unpunished. It reports that according to a working paper by the European Parliament "with falsified records, corruption or incorrectly billed subsidies, criminals obtain 300 million euro every year from the EU budget. Only a small portion of that is being paid back." Inge Grassle MEP is quoted saying that, "In member states there is a lack of interest in prosecuting when cases come from Brussels"
BBC
German bread bakers angered by EU 'taste police';
"What the EU is doing amounts to stupid interference"
The IHT looks at the Commission's proposal for reducing the permitted salt levels in bread to 1.0 grams of salt for every 100 grams of flour - a proposal which has caused angry reactions in Germany where bread on average contain 1.5 grams of salt for every 100 grams, sparking accusations of the EU acting as a 'taste police'.
It is noted that the reaction from the German bakers has been so intense that EU Health Commissioner Androulla Vassiliou yesterday postponed making a decision on new regulations.
Matthias Wiemers, Chairman of the Central Association of German Bakeries, a lobby for 12,000 of the country's 15,000 bakeries, is quoted saying "What the EU is doing amounts to stupid interference. The EU is trying to change the way we bake our bread, change the way we market it - and of all things, change the taste of our bread. And all this is taking place just months before we go to the polls to elect a new European Parliament. This is exactly the kind of interference and overregulation by Brussels that annoys citizens and even makes the EU unpopular."
Roland Ried, Spokesman for Bavaria's 2,500 bakeries, is quoted saying, "So, we are being asked to change our recipes by reducing the level of salt. But that means we will have to bake the bread for longer and use more energy. The EU should be concentrating on the financial crisis, tax reform and foreign policy instead of over-regulating our lives."
The article notes that "The anger of the bakers seems to reflect a rising backlash against the EU from a country that has long been among the most supportive of European integration."
Research in 2007 indicated that nearly half of loaves on supermarket shelves in Britain are above the Commission's proposed threshold, indicating that the proposed rule could also affect millions of loaves sold each year in the UK, the Telegraph reports.
IHT Telegraph Open Europe research
EBRD: Economic crisis risks throwing eastern Europe into "reverse"
The WSJ reports that the European Bank for Reconstruction and Development has warned that the economic crisis "is threatening to throw nearly two decades of economic reform into reverse" in central and eastern Europe. EBRD President Thomas Mirow said, "The region's problems are deeply interwoven with those of the rest of Europe, and the solution lies in a coordinated response from public authorities and international financial institutions."
The paper reports that the Euro has come under pressure over concerns it could be dragged down by eastern Europe's problems. eurozone banks have loans outstanding in central and eastern Europe amounting to $1.3 trillion.
EUobserver reports that eastern European member states' fears that they will be left behind by richer EU members in the economic crisis are growing ahead of an informal EU summit on Sunday. Of particular concern is the idea of creating a single bond for the eurozone, which could push up the cost of borrowing for east European governments outside the Euro. "We want to block the potential eurobond project. To do everything to prevent a two-speed Europe. The introduction of eurobonds for the eurozone only would mean precisely this," Polish Deputy Prime Minister Grzegorz Schetyna said yesterday.
The Coulisses de Bruxelles blog reports that the Czech EU Presidency has told its EU partners that the summit on Sunday will be in reduced format, with only one seat per country. The blog suggests that the idea is to marginalise Czech President Vaclav Klaus.
Meanwhile, the Telegraph reports that Hungary is on the verge of bankruptcy, with its citizens struggling to pay off mortgages and personal loans taken out in foreign currencies. The WSJ reports that Standard & Poor's Ratings services have downgraded Ukraine's sovereign debt deeper into junk status.
WSJ EUobserver Telegraph WSJ 2 FT: Analysis Irish Times Guardian: Garton Ash Coulisses de Bruxelles
In a debate in the Commons today James Paice, Shadow DEFRA Minister, cited Open Europe's recent research on the cost of EU regulation.
Open Europe
In an article for the Australian financial paper The Daily Reckoning, William Rees-Mogg quotes from Open Europe's recent bulletin on the German Constitutional Court's decisions on the compatibility of the Lisbon Treaty with the German constitution.
Daily Reckoning Open Europe bulletin
An article on the AgoraVox Italia website cites Open Europe's recent publication on EU communication policy.
AgoraVox Open Europe: EU communication policy and the campaign for hearts and minds
Verheugen: Ireland should not be punished for voting No in second Lisbon Treaty referendum
In an interview with the Irish Times, EU Industry Commissioner Gunter Verheugen said that, "I do not believe that a country or a people can be punished just because [of] a democratic right to say yes or no to an important proposal or important political decision. We have to respect this." He added, "The EU is not a state, it is a strong community of member states and the basic rule is that you can only go a step further if all member states agree."
In the interview, which focused on the economic crisis, Verheugen also said that it would be wrong to write off the Anglo-Saxon economic model or globalisation: "Some people are now blaming the UK and Ireland as the countries that imported the wrong business model to Europe. In principle the idea to transform an economy and build it on [a] modern globalised basis is reasonable, but as always, also in life mistakes were made."
Meanwhile, Euractiv reports that the President of the Czech Senate has said that a debate on the Lisbon Treaty originally scheduled for April could now be delayed until May, renewing suspicions that Prague may fail to ratify the Treaty before the end of its EU Presidency.
Irish Times EurActiv
EU rejects coordinated car aid plans
The European Commission has said it has no plans for a pan-European aid package for the auto sector, despite calls for coordinated action to help the industry amid a dramatic decline in demand across the continent, reports the WSJ. EUobserver notes that the Commission said that the car industry had been facing "longer-term structural problems" long before the financial crisis, and "primary responsibility for dealing with the crisis lies with industry." France, Germany, Italy, Spain, Sweden and the U.K. have proposed rescue plans for their car industries.
Deutsche Welle reports that the Commission has vowed to take legal action against countries that give unfair support to their national car industries.Deutsche Welle WSJ IHT EUobserver
Bavarian Minister-President Seehofer demands referendum on Turkey's accession to the EU
Die Welt reports that Minister-President of Bavaria and head of the CSU, Horst Seehofer, has said: "I want German citizens to be asked whether the European family should be extended to Turkey. Europe has to be much closer to its citizens".
Welt FAZ
EU Trade Commissioner says concerns over 'Buy America' clause remain
The IHT reports that despite concessions from the United States, EU Trade Commissioner, Catherine Ashton, has said she remains unsure about what would be "the technical impact of the wording" in the "Buy America" clause of President Barack Obama's $787 billion stimulus package, signed into law on Tuesday. Ashton said she was seeking "clarification from the administration about how they are planning to use it."
IHT
The European Commission's review of the EU budget has been delayed until October.
Followthemoney
On his FT blog, Foreign Affairs Editor Gideon Rachman looks at the "sorry state of the press", writing that three years ago, Le Monde had a four-strong Brussels bureau, and now there is only one reporter, and saying "even the French can't afford to cover the EU properly."
FT: Rachman blog
CESIFO Institute warns of inflation due to zero interest policies and increased government spending
FT Deutschland reports that the European Economic Advisory Group of the prominent economic CESIFO institute has warned of the long-term consequences of a zero interest rate policy and dramatically increasing government spending. French economist and EEAG President Gilles Saint-Paul reportedly said that while inflation is not an immediate problem due to the crisis, the increases in money supply will unleash their inflationary effects in due course.
Eurointelligence CESIFO report
France, Germany and the UK are proposing a tough list of additional EU sanctions to be imposed against Iran. Five countries - Greece, Cyprus, Spain, Austria and Sweden - are reportedly opposed to the new sanctions.
FT
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: openeurope.org.uk or call us on 0207 197 2333.
Wednesday, February 25, 2009
Open Europe press summary: 25 February 2009
Europe
Commission report to call for financial 'early warning system';
German Foreign Minister: "Turbo-capitalism of the past few years is dead"
The BBC reports that a European Commission report written by former Bank of France Governor Jacques de Larosiere, to be released today, will include proposals for an EU-wide supervisory scheme for banks and other financial bodies, including a new pan-European watchdog. The report is the product of an eight-man committee appointed by Commission President Jose Barroso last November to focus on "European supervisory arrangements covering all financial sectors". The proposal is one of 30 recommendations made in the report, which include those on capital requirements for banks, accounting principles, relations with the US, and the need to reform the Basel II global-banking standards.
PA reports that the proposed body will be asked to act as an "early warning system" against future economic shocks. The WSJ reports that Mr. de Larosiere will say Europe needs a wider range of supervision to address the fragmented nature of the current national setup, according to people familiar with his plans. It is not yet clear what the proposed relationship, if any, the European Central Bank will have with the body.
The WSJ notes that the UK has previously stated that regulation is better done where each bank is based, and that it should be aligned with national finance ministries responsible for bailing out banks if things go wrong. However, BBC Europe Editor Mark Mardell notes that "Gordon Brown has recently dropped his opposition to tighter regulation, but we will have to wait and see what he's prepared to swallow."
The FT reports that UK industry and the City of London's interest in the European deliberations is "growing rapidly". John Liver, of Ernst & Young said, "The City is now realising these issues could have important consequences so they had best engage with the process...There's a thin red line of people involved in strategic thinking within financial services and they're already very busy."
Meanwhile, Deutsche Welle reports that German Foreign Minister and SPD candidate for German Chancellor Frank Walter-Steinmeier is aiming to turn financial regulation into a key campaign issue. In an interview with the FT, he said, "The turbo-capitalism of the past few years is dead, irrevocably so, we must now create a new order for the future."
Euractiv reports that the Commission has given the go-ahead for the nationalisation of banks as a measure of last resort, setting out a range of requirements for banks eligible for state aid.
FT BBC BBC: Mardell blog WSJ Les Echos Guardian: Tisdall Deutsche Welle EurActiv
Business morale in Germany at 18 year low;
BNP Paribas: "Markets think Germany will have to pay the bill for bailing out Eastern Europe"
The FT reports that German business confidence has fallen to its lowest level for at least 18 years after a decline in industrial orders late last year. FT Deutschland notes that German politicians are "desperate".
Meanwhile, the Telegraph reports that the cost of bankruptcy protection on German debt has reached an all-time high as a result of spill-over from the financial crisis in eastern Europe and mounting concerns about the stability of Germany's banking system. Hans Redeker, Currency Chief at BNP Paribas, is quoted saying: "the markets have started to price in a de facto bail-out of Eastern Europe and they think that Germany will have to pay the bill."
Le Figaro reports that an unnamed European diplomat revealed his concern that "Europe has a new baby on its hands" with eastern Europe.FT IHT FTD 1 FTD 2 EU Observer Telegraph Open Europe blog Le Figaro La Tribune
ECB indicates willingness to back bailout of distressed countries
The Irish Independent reports that the European Central Bank has signalled that it may back a bailout of distressed countries like Ireland, should a situation become "inevitable". ECB Governing Council member and head of the Bundesbank, Axel Weber, stressed that any aid should be tied "to very strict" conditions and modelled after International Monetary Fund support. The paper notes that one of the ideas being considered is the offering of "bilateral bonds" that would allow a struggling country to borrow money at rates enjoyed by the likes of Germany, when it issues government bonds without having to pay the current risk premium as well.
FAZ notes that early on in the financial crisis only Greece seemed to be at risk but since then, Spain and Portugal have also had their creditworthiness downgraded by rating agency Standard & Poor's and it is expected that analysts will also add Ireland to the list.
FAZ Irish Independent
EU to put halt on enlargement over fears of foreign workers backlash?
The Telegraph reports that the Dutch and German governments have put plans for further enlargement on hold amid fears of a popular backlash over foreign workers and rising unemployment levels. Ministers will next week decide whether an application from Montenegro for EU membership will be allowed to continue. Several countries are said to be concerned that if Montenegro is considered for entry, bids will quickly follow from Albania, Bosnia and Serbia. The article quotes an "official" involved in the talks saying "The Dutch said that the Lindsey refinery dispute has proved that enlargement and free movement of workers can be difficult to sell to EU electorates...the British defend free movement and enlargement but if even they cannot sell it to their own people, who else can?"
Irish Independent
Big fall in number of east Europeans seeking work in UK
According to Home Office figures published yesterday, the number of east and central Europeans registering to work in the UK has fallen to its lowest level since their countries joined the European Union five years ago, the FT reports. The Guardian notes that the final three months of 2008 saw 29,000 applications to work in Britain from migrants from the countries that joined the EU in 2004 - down from 53,000 over the same period in 2007 and 63,000 the year before.
FT Independent Mirror Mail Guardian BBC
Dutch retailers protest against EU import duties for driving up consumer prices
According to ANP, Dutch retailers have protested to their government against EU import duties, saying that "in the name of antidumping, the crisis and saving jobs, one duty after another is being installed. Especially China is being targeted, but also products from Australia and the US are being made unnecessarily expensive", adding that "the consumer pays a higher price".
ANP
Sarkozy: "if the United States defends its farmers...maybe we can do the same in Europe"
EUobserver reports that French President Sarkozy has called on the EU to protect its industry in the face of US protectionism, saying "if the United States defends its farmers as it does, maybe we can do the same in Europe. If the United States defends its industry, as it does - and they are right - maybe in Europe we can do the same". He also said that France and Italy would insist on this at a meeting of EU leaders in Brussels on Sunday.
EUobserver
British diplomat: EU bodies are "self-absorbed"
In a letter to the Times, former Commonwealth Deputy Secretary-General Sir Peter Marshall argues that "Like the rejected constitutional treaty that it so closely resembles, the straitjacket Lisbon treaty has become part of the problem rather than part of the solution, a sobering truth that would by now have been accepted by bodies less self-absorbed, and less seemingly deaf to constructive questioning of prevailing orthodoxies, than the institutions of the European Union."
Times: Letters
German CSU party calls for "slim Europe"
Suddeutsche Zeitung reports that the Bavarian CSU party, part of the ruling CDU coalition, has set a different course in EU policy than the CDU, with Thomas Silberhorn, the CSU speaker on EU affairs, quoted saying: "Externally we need a strong Europe, when it concerns competing with external power. Internally we need a slim Europe, which confines itself".
Suddeutsche Zeitung
EU administrative error over days at sea
The European Ombudsman has upheld a complaint by Scottish fishermen against the European Commission for an administrative error that reduced the number of days they could spend at sea. The mistake was included in a 2007 Council ruling which reduced the west of Scotland allocation from 280 to 250 days according to the BBC. European Voice reports that the Commission "immediately denied" any error had taken place, and it has until April to respond.
BBC European Voice
Conservative proposal for food labeling "certain to fail" EU legal test says Labour
PA reports that the Shadow Defra Secretary, Nick Herbert, has called for a mandatory country of origin indication on meat products, but the Environment Secretary Jane Kennedy has said such a proposal was "certain to fail" the European Commission's legal test.
No link
France and Italy yesterday signed an agreement to co-operate on nuclear energy and, with French help, Italy wants to build new nuclear reactors, for the first time in two decades.
FTD
Hungary's currency fell abruptly against the Euro yesterday after the Hungarian Prime Minister, Ferenc Gyurcsany, was apparently misquoted by Bloomberg as saying "we are in serious trouble indeed" with reference to Hungary, rather than Europe as intended.
EurActiv
President Sarkozy has drawn criticism over his plan to nominate Francois Perol, Deputy Chief of Staff of the Elysee, as the Chairman of a new bank formed by the merger of Banque Populaire and Caisse d'Epargne, two troubled French mutual banks. The merger was supervised by Mr Perol.
Irish Times
The FT reports that Iceland has dropped its plans to take the UK Government to the European Court of Human Rights over its use of anti-terror legislation to freeze Icelandic assets last year.
FT Telegraph
Credit rating agency Standard and Poor's has cut the debt rating of Latvia to that of junk status, which is rare for a sovereign state, and has said it may further cut the rating this year, as well as that of Lithuania and Estonia.
Independent
The IHT reports that Hungarian Prime Minister Ferenc Gyurcsany has urged the EU to speed up Euro membership, saying: "the best protection against foreign exchange problems is to join the euro-zone".
IHT FTD Guardian
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: openeurope.org.uk or call us on 0207 197 2333.
Commission report to call for financial 'early warning system';
German Foreign Minister: "Turbo-capitalism of the past few years is dead"
The BBC reports that a European Commission report written by former Bank of France Governor Jacques de Larosiere, to be released today, will include proposals for an EU-wide supervisory scheme for banks and other financial bodies, including a new pan-European watchdog. The report is the product of an eight-man committee appointed by Commission President Jose Barroso last November to focus on "European supervisory arrangements covering all financial sectors". The proposal is one of 30 recommendations made in the report, which include those on capital requirements for banks, accounting principles, relations with the US, and the need to reform the Basel II global-banking standards.
PA reports that the proposed body will be asked to act as an "early warning system" against future economic shocks. The WSJ reports that Mr. de Larosiere will say Europe needs a wider range of supervision to address the fragmented nature of the current national setup, according to people familiar with his plans. It is not yet clear what the proposed relationship, if any, the European Central Bank will have with the body.
The WSJ notes that the UK has previously stated that regulation is better done where each bank is based, and that it should be aligned with national finance ministries responsible for bailing out banks if things go wrong. However, BBC Europe Editor Mark Mardell notes that "Gordon Brown has recently dropped his opposition to tighter regulation, but we will have to wait and see what he's prepared to swallow."
The FT reports that UK industry and the City of London's interest in the European deliberations is "growing rapidly". John Liver, of Ernst & Young said, "The City is now realising these issues could have important consequences so they had best engage with the process...There's a thin red line of people involved in strategic thinking within financial services and they're already very busy."
Meanwhile, Deutsche Welle reports that German Foreign Minister and SPD candidate for German Chancellor Frank Walter-Steinmeier is aiming to turn financial regulation into a key campaign issue. In an interview with the FT, he said, "The turbo-capitalism of the past few years is dead, irrevocably so, we must now create a new order for the future."
Euractiv reports that the Commission has given the go-ahead for the nationalisation of banks as a measure of last resort, setting out a range of requirements for banks eligible for state aid.
FT BBC BBC: Mardell blog WSJ Les Echos Guardian: Tisdall Deutsche Welle EurActiv
Business morale in Germany at 18 year low;
BNP Paribas: "Markets think Germany will have to pay the bill for bailing out Eastern Europe"
The FT reports that German business confidence has fallen to its lowest level for at least 18 years after a decline in industrial orders late last year. FT Deutschland notes that German politicians are "desperate".
Meanwhile, the Telegraph reports that the cost of bankruptcy protection on German debt has reached an all-time high as a result of spill-over from the financial crisis in eastern Europe and mounting concerns about the stability of Germany's banking system. Hans Redeker, Currency Chief at BNP Paribas, is quoted saying: "the markets have started to price in a de facto bail-out of Eastern Europe and they think that Germany will have to pay the bill."
Le Figaro reports that an unnamed European diplomat revealed his concern that "Europe has a new baby on its hands" with eastern Europe.FT IHT FTD 1 FTD 2 EU Observer Telegraph Open Europe blog Le Figaro La Tribune
ECB indicates willingness to back bailout of distressed countries
The Irish Independent reports that the European Central Bank has signalled that it may back a bailout of distressed countries like Ireland, should a situation become "inevitable". ECB Governing Council member and head of the Bundesbank, Axel Weber, stressed that any aid should be tied "to very strict" conditions and modelled after International Monetary Fund support. The paper notes that one of the ideas being considered is the offering of "bilateral bonds" that would allow a struggling country to borrow money at rates enjoyed by the likes of Germany, when it issues government bonds without having to pay the current risk premium as well.
FAZ notes that early on in the financial crisis only Greece seemed to be at risk but since then, Spain and Portugal have also had their creditworthiness downgraded by rating agency Standard & Poor's and it is expected that analysts will also add Ireland to the list.
FAZ Irish Independent
EU to put halt on enlargement over fears of foreign workers backlash?
The Telegraph reports that the Dutch and German governments have put plans for further enlargement on hold amid fears of a popular backlash over foreign workers and rising unemployment levels. Ministers will next week decide whether an application from Montenegro for EU membership will be allowed to continue. Several countries are said to be concerned that if Montenegro is considered for entry, bids will quickly follow from Albania, Bosnia and Serbia. The article quotes an "official" involved in the talks saying "The Dutch said that the Lindsey refinery dispute has proved that enlargement and free movement of workers can be difficult to sell to EU electorates...the British defend free movement and enlargement but if even they cannot sell it to their own people, who else can?"
Irish Independent
Big fall in number of east Europeans seeking work in UK
According to Home Office figures published yesterday, the number of east and central Europeans registering to work in the UK has fallen to its lowest level since their countries joined the European Union five years ago, the FT reports. The Guardian notes that the final three months of 2008 saw 29,000 applications to work in Britain from migrants from the countries that joined the EU in 2004 - down from 53,000 over the same period in 2007 and 63,000 the year before.
FT Independent Mirror Mail Guardian BBC
Dutch retailers protest against EU import duties for driving up consumer prices
According to ANP, Dutch retailers have protested to their government against EU import duties, saying that "in the name of antidumping, the crisis and saving jobs, one duty after another is being installed. Especially China is being targeted, but also products from Australia and the US are being made unnecessarily expensive", adding that "the consumer pays a higher price".
ANP
Sarkozy: "if the United States defends its farmers...maybe we can do the same in Europe"
EUobserver reports that French President Sarkozy has called on the EU to protect its industry in the face of US protectionism, saying "if the United States defends its farmers as it does, maybe we can do the same in Europe. If the United States defends its industry, as it does - and they are right - maybe in Europe we can do the same". He also said that France and Italy would insist on this at a meeting of EU leaders in Brussels on Sunday.
EUobserver
British diplomat: EU bodies are "self-absorbed"
In a letter to the Times, former Commonwealth Deputy Secretary-General Sir Peter Marshall argues that "Like the rejected constitutional treaty that it so closely resembles, the straitjacket Lisbon treaty has become part of the problem rather than part of the solution, a sobering truth that would by now have been accepted by bodies less self-absorbed, and less seemingly deaf to constructive questioning of prevailing orthodoxies, than the institutions of the European Union."
Times: Letters
German CSU party calls for "slim Europe"
Suddeutsche Zeitung reports that the Bavarian CSU party, part of the ruling CDU coalition, has set a different course in EU policy than the CDU, with Thomas Silberhorn, the CSU speaker on EU affairs, quoted saying: "Externally we need a strong Europe, when it concerns competing with external power. Internally we need a slim Europe, which confines itself".
Suddeutsche Zeitung
EU administrative error over days at sea
The European Ombudsman has upheld a complaint by Scottish fishermen against the European Commission for an administrative error that reduced the number of days they could spend at sea. The mistake was included in a 2007 Council ruling which reduced the west of Scotland allocation from 280 to 250 days according to the BBC. European Voice reports that the Commission "immediately denied" any error had taken place, and it has until April to respond.
BBC European Voice
Conservative proposal for food labeling "certain to fail" EU legal test says Labour
PA reports that the Shadow Defra Secretary, Nick Herbert, has called for a mandatory country of origin indication on meat products, but the Environment Secretary Jane Kennedy has said such a proposal was "certain to fail" the European Commission's legal test.
No link
France and Italy yesterday signed an agreement to co-operate on nuclear energy and, with French help, Italy wants to build new nuclear reactors, for the first time in two decades.
FTD
Hungary's currency fell abruptly against the Euro yesterday after the Hungarian Prime Minister, Ferenc Gyurcsany, was apparently misquoted by Bloomberg as saying "we are in serious trouble indeed" with reference to Hungary, rather than Europe as intended.
EurActiv
President Sarkozy has drawn criticism over his plan to nominate Francois Perol, Deputy Chief of Staff of the Elysee, as the Chairman of a new bank formed by the merger of Banque Populaire and Caisse d'Epargne, two troubled French mutual banks. The merger was supervised by Mr Perol.
Irish Times
The FT reports that Iceland has dropped its plans to take the UK Government to the European Court of Human Rights over its use of anti-terror legislation to freeze Icelandic assets last year.
FT Telegraph
Credit rating agency Standard and Poor's has cut the debt rating of Latvia to that of junk status, which is rare for a sovereign state, and has said it may further cut the rating this year, as well as that of Lithuania and Estonia.
Independent
The IHT reports that Hungarian Prime Minister Ferenc Gyurcsany has urged the EU to speed up Euro membership, saying: "the best protection against foreign exchange problems is to join the euro-zone".
IHT FTD Guardian
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: openeurope.org.uk or call us on 0207 197 2333.
Tuesday, February 24, 2009
Open Europe press summary: 24 February 2009
Europe
German Finance Minister wants to help eurozone countries which have "difficulties with their payments";
ECB says German plan breaches "no bailout" clause in EU TreatyDer Spiegel reports that German Finance Minister Peer Steinbrueck is looking into ways to help struggling eurozone member states. The article notes that Steinbrueck was "speaking about the unspeakable" when he hinted at the risk of a country having to leave the eurozone: "We have a few countries in the eurozone who are getting into difficulties with their payments", he said, "if one euro zone member gets into trouble, then collectively we will have to help." According to Der Spiegel reports, not one single representative of the eurozone had until last week been willing to discuss the possibility of aid measures for struggling countries, instead pointing to the "no bailout" clause in the Maastricht Treaty. This clause prohibits countries from providing financial aid to individual eurozone members.
The article notes that Steinbrueck's plan has already come under criticism. ECB Chief Economist Jurgen Stark is quoted saying: "the ban preventing the EU and its member states from taking responsibility for the debts of partner countries is an important foundation needed for the currency union to function." In an interview with Frankfurter Allgemeine Zeitung, former ECB Chief Economist Otmar Issing said that watering down the "no bailout" clause would be a disaster "for the political stability of the monetary union."
Meanwhile, Le Monde reports that the Euro is getting weaker amid concerns over the health of the eastern European economies. The FT reports that the cost of insuring the debt of the leading eastern European countries rose to record highs yesterday and a leader in the Guardian notes that these nations are heavily indebted, and many of those debts are in foreign currency, which means that repayments in their own money are soaring. The FT reports that central European banks have coordinated statements to support their currencies.
Commenting on the problems that the EU's new member states are facing, a leader in Handelsblatt argues that "Euro dreams will not save Central Europe: most politicians in the region see the euro as a solution, but, for example, the euro has not been a cure at all for Ireland. The unlimited capital streams in the monetary union provide for excesses, whereby the strict monetary framework makes it harder in difficult times to adapt wages to more competitive levels."
Spiegel FAZ FT AFP FTD WSJ: Tilford FT Le Monde FT: Peel FT Irish Times: Leader Irish Times: Smyth BBC: Mardell blog Guardian: Leader
Trichet backs increased regulation for all financial institutions;
Expert group likely to call for new EU agency for financial regulation
European Central Bank President Jean-Claude Trichet has backed European proposals for greater global market regulation, saying "The current crisis is a loud and clear call to extend regulation and oversight to all systemically important institutions -- notably hedge funds and credit-rating agencies", reports the WSJ. He has also warned that "strains in the financial sector are spilling over into the real economy...This has set in motion a process of negative feedback", according to the Telegraph.
According to EUobserver, an expert group headed by former International Monetary Fund chairman Jacques de Larosiere will publish a report tomorrow that will likely call for the setting up of a new EU agency to regulate financial institutions. It will recommend this be modelled on the European Monetary Institute of 1992, the forerunner of the ECB. The group was mandated by Commission President Barroso last October to devise ideas for new a new regulatory financial framework for Europe.
Meanwhile, the Independent reports that the hedge fund industry is trying to deflect the threat of tougher EU regulation, quoting Andrew Baker, the Chief Executive of the Alternative Investment Management Association (AIMA) who says "It is important to stress that hedge fund managers in Europe are currently rigorously regulated at both national and European levels...The industry is also subject to a whole range of European directives. It is part of the solution, not part of the problem." The Guardian reports that the industry will argue for improved self-regulation in public hearings at the Commission on Thursday and Friday.
WSJ FT FT: Tett FT: Leader Telegraph Telegraph 2 Independent Guardian WSJ 2 EUobserver
Open Europe Vice-Chairman Derek Scott was on BBC Radio 4's The World This Weekend programme on Sunday discussing potential outcomes from April's G20 summit in London.
BBC Radio 4: The World This Weekend
On Conservative Home, MEP candidate Zehra Zaidi looks at the potential end of the UK's opt-out from the EU's 48 hours working week. Citing Open Europe's estimate that ending the opt-out would cost the UK economy between 47.74 billion and 66.45 billion pounds by 2020, she argues that "The bottom line is that we should be able to retain the flexibility to set our own working hours."
Conservative Home
Lords committee: EU patients' mobility could advantage the rich and educated
A new report from the House of Lords EU Committee has warned that the Commission's proposed Health Directive - under which patients would have the right to be treated in another member state and claim up to the amount their treatment would have cost in their home country - could advantage the rich and educated. Although welcoming the proposal, the Committee said that if patients had to pay for treatment themselves, and claim reimbursement later, those without adequate financial means would not be able to take advantage of their right to cross-border healthcare, the Telegraph reports. It called for NHS trusts to pay for the treatment rather than expecting patients to fund it and then apply for a reimbursement. The report also warned against the "unpredictable impact" of the directive and said that more should be done to ensure Britain can refuse to accept a patient from another state if it would increase waiting times for treatment
Telegraph BBC
EU regulation threatens German bread
FAZ reports that German bakers are nervous about EU plans to introduce new thresholds for permissible salt, sugar and fat contents of groceries, to be decided in the coming weeks. FTD notes that German pretzels and wholegrain bread could be classified as "unhealthy", if they contain more salt than regarded as adequate by the European Food Safety Authority (EFSA). German MEP Renate Sommer is quoted in the FTD saying that "this is the classification of food into good and bad".
According to FAZ, German bakers have complained that consumers will be indirectly urged to buy packed toast bread as opposed to wholegrain bread because they think it is healthier. To show consumers what saltless bread would taste like, German bakers are planning a "Day of the European Commission's Bread". The final decision on the proposal will be taken in April by the European Parliament and by the member states.
FTD
German economist: "let's introduce the German Mark again"In an interview with Frankfurter Rundshau German Economics Professor Wilhelm Hankel has said that "the euro hampers the fight against the crisis", adding that "financial markets reckon that the eurozone will break up" and "it would be wiser to abandon the euro and to introduce the German Mark again".FR
Commission's energy and broadband package criticised as "geographically unbalanced"
Sueddeutsche Zeitung reports that the Commission's proposal to use 5bn euros of unspent funds on clean energy and broadband projects has been rejected by at least five member states. It quotes the Austrian Foreign Minister, Michael Spindelegger, saying the Commission's list of projects was "geographically and sectoral unbalanced. [It was overall] not acceptable".
The FT reports that Bulgaria, Greece, Portugal and Spain are leading a southern European bloc criticising the Commission for favouring eastern Europe at the expense of the rest of the EU.
Allgemeine Zeitung FT Euractiv European Voice EUobserver
Irish Europe Minister: Those who say EU is undemocratic "mischievously misrepresent reality"
The Irish Times reports that Ireland's Minister for European Affairs Dick Roche has said that the EU is a fully accountable, democratic body, saying, "Those who spread allegations about unaccountable elites in Brussels foisting decisions on the people of Europe are badly mistaken. Either they completely misunderstand the manner in which the union operates, or they mischievously misrepresent the reality of how the union operates."
Meanwhile, Foreign Affairs Minister Micheal Martin said a draft text outlining 'guarantees' on neutrality had now been written in co-operation with the legal service of the Council of Ministers. He said there was no final decision yet on whether Ireland would withdraw from the European Defence Agency.
Irish Times Irish Times 2 Telegraph: Hannan blog
EUobserver reports that the European Commission has invited business and social representatives to its private weekly meetings for the first time, in the face of growing social unrest in the EU. One of the issues to be discussed will be the Posted Workers Directive, the subject of recent protests at the Lindsey oil refinery.
EUobserver
Germany considering Opel bailout
The German government is considering a bailout plan for German carmaker Opel. EUobserver reports that Berlin is ready to give Opel credit but has ruled out the option of a takeover. The funding is estimated to be worth 3.3 billion euros.
EUobserver
French Agriculture Minister's hope of election to European Parliament threatened by change to CAP subsidies
An article in Le Monde suggests that current French Minister for Agriculture Michel Barnier's election to the European Parliament in June as top candidate from the ruling UMP party for the Ile-de-France region could be in trouble following his plans to reduce agricultural subsidies for large cereal producers. The plans seek to divert subsidies received from the EU's Common Agricultural Policy to smaller farms. Orama, the trade union for cereal producers, has called to vote against Barnier and it is thought that around 10% of voters from the region could switch their votes.
Le Monde Independent: Lichfield Les Echos
Commission prepares trade duties for US biofuels
The IHT reports that the EU is preparing to impose trade duties on biofuels imported from the United States to prevent American producers from putting European producers of biodiesel out of business.
IHT
Smaller EU member states, such as Sweden and Finland, have complained about being left out of the EU's decision-making procedure after the block's six richest countries met on Sunday in Berlin to discuss the economic crisis.
Deutsche Welle
The European Parliament and the Council are heading for initial agreement on a "Single European Sky", proposed by the Commission last summer, to integrate EU airspace.
EurActiv
EUobserver reports that an extrapolation of 19 national polls has indicated that if the European elections were held today, the balance of power in the European Parliament would stay broadly the same, with the mainstream parties losing some ground and far left and right parties gaining some seats.
EUobserver
Spain's Justice Minister Mariano Fernandez Bermejo yesterday resigned after a hunting trip he shared with a prominent judge, prompting accusations that the government is to close to the country's judicial system.
IHT
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: openeurope.org.uk or call us on 0207 197 2333.
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