Wednesday, April 01, 2009

Open Europe press summary: 1 April 2009


Commission salaries matched with 1950s steel industry pay
Open Europe's findings on the size of Commissioners' pensions and salaries is covered in Le Monde and Le Figaro. Le Monde notes that Commission President Jose Barroso is paid more than Nicolas Sarkozy, Angela Merkel, Gordon Brown and Barack Obama. A Commission spokesperson is quoted saying, "It is completely wrong to talk about golden parachutes", and the paper notes that the salaries are historically high in order to be competitive with salaries in the steel-manufacturing industry, which prospered in the 1950s. The research is also covered in Polish daily Gazeta Wyborcza, and Open Europe Director Lorraine Mullally was interviewed for Polish television channel Telewizja Polska. Open Europe's Pieter Cleppe was also interviewed for French channel TV LCI.
Le Monde Gazeta Wyborcza Elsevier Economiste Delfi Standaard LCI (6.45 min in) Open Europe press release OE blog

MEPs back extension of maternity leave to 18 weeks on full pay
PA reports that MEPs have backed an EU-wide extension of maternity leave to 18 weeks on full pay. British Conservative MEP Philip Bushill-Matthews has warned the plan will damage young women's job prospects and harm small businesses, if it is approved by EU ministers. Current UK maternity entitlement is 52 weeks. Providing criteria are met, the mother is paid 90 per cent of her average weekly earnings for the first six weeks, followed by 33 weeks on a fixed sum of Statutory Maternity Pay (SMP) - currently £117.18 (£123.06 from April 5). The vote will be followed by a vote of the full European Parliament, and a decision of EU ministers, with a final decision still months away.

Mr. Bushill-Matthews said: "The EU should not be dictating to British mothers and fathers how much leave they must take. Britain needs more flexible maternity and paternity rules but forcing all employers to pay 18 weeks' leave at full pay could force a reduction in the overall amount of time new parents can take leave for...Most businesses will be watching their bottom line closely right now and all this new law will achieve is the likelihood of greater unemployment of women of child-bearing age. This is just another example of how over prescriptive one-size-fits-all EU employment legislation can promote unemployment, especially amongst the most vulnerable in our society."
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Europe Minister has not read the Lisbon Treaty
The Mail, Telegraph, Sun and Evening Standard report on Europe Minister Caroline Flint's admission in Parliament on Monday that she has not read the Lisbon Treaty. Open Europe's Lorraine Mullally is quoted in the Telegraph and the Mail saying "This is an unbelievable admission. It is extremely worrying that the minister responsible for promoting the treaty in this country has no idea what it actually says. Perhaps this explains why she is against giving the British people the vote on it they were promised - she simply has no idea how important it is."
Mail Telegraph Sun

Open Europe: EU Commission's 'Better Regulation Agenda' has failed to halt the rising cost of regulation
On Monday, Open Europe held a debate in Brussels looking at the issue of EU regulation, drawing on the themes of its recent publication "Out of control? Measuring a decade of EU regulation". The report found that since the European Commission introduced its 'Better Regulation Agenda' in 2005, the annual cost of EU regulation across the bloc has gone from €108bn to over €161bn - an increase of 50%.

Open Europe Research Director Mats Persson presented the findings of the report and said that despite various positive steps, "The EU's Better Regulation Agenda has not addressed the flow of new regulation, which means that the cost of EU regulation is going up, year on year." He added, "The idea of more regulations meaning 'more Europe' must be resisted, particularly in times of recession."

Marianne Klingbeil, representing the European Commission, said that "We live in a society that is older and richer...We have a request for safety, we have a request for environmental protection, which we didn't have to this extent ten, twenty, thirty years ago." She said: "You have to make sure that you have at European level and at national level what needs to be regulated at national and European level". However, she rejected Open Europe's recommendation for an independent board to evaluate Commission proposals.

Christofer Fjellner MEP welcomed Open Europe's report and the opportunity to debate the issue of regulation, saying, "Putting a price tag and making everything that politicians don't see with their proposals visible, I think, is extremely important."

Jens Hedstrom of Business Europe said, "This report shows that there are a lot of rules, they are very complex and we have a price tag on it, which is very costly for business."

Meanwhile, in a debate in the House of Lords on Monday, Lord Howell of Guildford quoted from Open Europe's report. He asked Lord Malloch-Brown, Minister of State, Foreign and Commonwealth Office, "Is he aware that since the initiation of the UK regulatory reform agenda announced by the Government in 2005, the latest very detailed estimates suggest that the cost of regulation has risen from £16.7 billion a year to £28.5 billion--that is a 74 per cent increase, of which some 71.6 per cent is EU originated? Whatever one's view about the virtues of the EU--one can see many of them--surely Ministers should be far more robust about resisting unnecessary and excessive regulation than they have been if this trend is to be stopped."
Hansard Open Europe report Open Europe events

Britain to lose independent voice in reformed IMF?
The Telegraph reports that Joaquin Almunia, the European Commissioner for Economic and Monetary Affairs, has said that in future the EU would have "one voice" in institutions such as the International Monetary Fund (IMF). "For me the most important thing is to have one European voice and position on these bodies," he said.

The article reports that, while Britain, France or Germany would not lose their votes or place at the IMF's top table they would, Mr Almunia insisted, be required by the EU to "present the same things and positions". He admitted that some countries, such as Britain, might have to be pushed into merging national votes into a collective EU position, saying "Some will not adapt to this on their own initiative, they will need to receive pressure".
WSJ Telegraph

MEPs vote to radically tighten energy efficiency regulation for buildings
The European Parliament's Industry Committee has voted to amend the 2002 Energy Performance of Buildings Directive, stating that, by 31 December 2018 at the latest, EU member states must ensure that all newly-constructed buildings produce as much energy as they consume on-site - e.g. via solar panels or heat pumps.

The Committee also voted in favour of an amendment that would require existing buildings' energy performance to be upgraded to meet minimum energy performance requirements whenever they undergo renovation, such as when windows, boilers or air conditioning systems are replaced. The Committee's report will be debated by the Parliament in May.
EP press release

MEPs back plan for cross-border medical treatment funding
PA reports that MEPs have backed plans for cross-border medical treatment to be funded by the patient's national health system. This would mean that the NHS would be required to fund treatment that UK citizens receive in the EU.

A Government spokesman said that, "The Government remains absolutely committed to ensuring that, where UK patients choose to travel abroad for care, the NHS retains the ability to decide what care it will fund. Equally, we want to ensure that anyone travelling to the UK for healthcare from elsewhere in Europe pays the full NHS cost of treatment upfront, and that NHS patients in the UK are not disadvantaged.
Conservative Home Open Europe briefing

Emerging divisions within the G20 sharpen;
Japanese PM: Germany does not understand the importance of fiscal stimulus
The Irish Independent reports that top officials from the UK and the US have shrugged off suggestions that French President Nicolas Sarkozy may walk out of the conference in protest at excessive 'Anglo-Saxon' influence over the agenda. According to the WSJ Sarkozy's spokesman said that "there is no threat" to leave the summit.

The Telegraph reports that divisions are emerging between the French and Germans, who want tighter banking regulation, while the US and the UK are preparing to resist such crackdowns. The Irish Times reports that after talks in Berlin yesterday, Russian President Dmitry Medvedev threw his weight behind Merkel's plans to overcome the financial crisis with new regulation rather than extra spending.

The BBC notes that France and Germany are generally unhappy with the current draft G20 accord. President Sarkozy told French radio that although there were projects on the table, "as things stand at the moment, these projects do not suit France or Germany," adding "as of today, there is no firm agreement in place."

The BBC also reports that Sarkozy and Merkel will hold a joint press conference this afternoon. According to the Independent, British officials believe that Sarkozy and Merkel will not want to be accused of wrecking the conference, and that this pre-summit broadside is an attempt to grab a share of the limelight.

In an interview with the FT, Japan's Prime Minister Taro Aso argues that Germany has failed to understand why fiscal action is vital for economic recovery. He cites the experience of Japan over the last 15 years and says, "I think there are countries that understand the importance of fiscal mobilisation and there are some other countries that do not - which is why, I believe, Germany has come up with their views."
FT: Leader FT FT: Letters FT: Wolf Irish Independent Telegraph Telegraph: Meyer Telegraph: Leader Mirror IHT Guardian: Leader BBC European Voice FT: Rachman blog Telgraph: Hannan blog Le Point AFP La Tribune Le Figaro Le Monde WSJ Independent Times IHT Guardian Guardian 2 Irish Times FT 2 FT 3

OECD report warns world trade is in "free fall"
The FT reports that G20 leaders will pledge to promote trade and avoid protectionism during their meeting, but the pledge not to raise new barriers to trade at the previous summit has already been flouted.

According to the Telegraph, a new report from the OECD says that, world trade is in "free fall" and will slump this year at the fastest rate since records began, at 13.2% in 2009. The article reports that World Bank President Robert Zoellick has called for the G20 to sign up to an urgent plan to provide financing for exporters and traders in the developing world.
FT Telegraph

PA reports that the UK Government has been hit with a £25 million fine from the European Commission over financial irregularities in delivering local regeneration projects funded by the European Regional Development Fund between 1997 and 1999.
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European Parliament report recommends EU take control of Britain's naval bases
The Mail and the Express look at a new report commissioned by the European Parliament which says that military facilities in the Falkland Islands, Gibraltar and Cyprus should become part of an EU 'forward presence' to help safeguard Europe's trade routes, operating under EU flags as part of the European Security and Defence Policy. According to the Mail, the plans suggest that two aircraft carriers being built for the Royal Navy should become an EU "capability". The paper reports that the idea has been rejected by the Ministry of Defence.
Mail Express EU Referendum blog

McCarthy: UK should allow financial services reform that hampers independence
In the FT, Sir Callum McCarthy, former Chairman of the Financial Services Authority, looks at various proposals to reform the financial services sector and argues that "The UK's traditional approach has been to resist processes that would impinge on its sovereignty or independence. It is far from clear that this is in the UK's interest."
FT: McCarthy

Handelsblatt reports that a Commission paper published yesterday warns that EU states' current account deficits are drifting apart further than ever. Meanwhile, the monthly fiscal report in FAZ confirms that the economy of the eurozone is in a deeper recession than initially expected. In the second quarter of 2008, the GNP of the eurozone decreased by 1.5 percent and industrial production by 3.5 percent compared to the previous year.
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Commission retreats on forcing recreational fishermen to register catches
PA reports that, following a campaign by MEPs, EU Fisheries Commissioner Joe Borg has now confirmed that recreational fishermen not selling their catch will be excluded from efforts to widen fishing controls and report their catches. However, instead of removing the reference to recreational fishermen from the proposal, it will be left up to national authorities to decide whether to include amateur anglers in the regulation.
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Ashton: There is a difference between protecting and protectionism
Speaking on the BBC's Hard Talk programme, EU Trade Commissioner Catherine Ashton defended EU member states' subsidies to the car sector, saying that it's necessary to "Make a distinction, and it's a very clear one, between protection and protectionism". She added that she was "Confident the EU hasn't cross the line" of protectionism yet.

Ashton also defended the EU's recent re-introduction of milk subsidies. "In 2007 we took off subsidies because prices were high. We're entitled within the World Trade Organisation rules to have subsidies as prices fall, so what we've done is to bring in temporary measures." When questioned, she denied the use of anti-dumping measures by the EU as a protectionist tactic: "Absolutely not. I'm in charge of making sure that we apply the rules and that we apply them properly...I have said categorically from the day I got this job I will apply the rules and I will apply them properly in this context."
BBC Hard Talk

The Telegraph reports that the EU's Common Agricultural Policy is costing British consumers around £10.3 billion a year, the equivalent of £398 per household, while doing little to help British farmers. While the UK has nearly as much farmland as Germany, it gets only 60 per cent of the level of grants that Germany does, and a fifth less money than Italy, despite having a seventh more farmland.

Brown squeezes extra funds for the IMF by announcing contributions in euros rather than dollars
On his FT Brussels blog, Tony Barber notes that Gordon Brown has managed to maximise EU contributions to the IMF by announcing fresh contributions of €75bn rather than $75bn-$100bn. Barber writes, "He did so knowing full well that the euro was strong enough against the dollar for the amount, when converted into dollars, to end up being slightly more than $100bn - which was precisely his intention".
FT: Brussels blog FT

In an article in the Irish Independent, Sean O'Grady looks at the potential breakup of the eurozone and argues that, "The eurozone is a one-legged man auditioning for the part of Tarzan...It makes no sense in a single-currency zone if one country does its own thing".
Irish Independent: O'Grady

German Chancellor Angela Merkel confirmed yesterday that Germany was willing to provide financial guarantees to help General Motors' Opel subsidiary, but she rejected calls for the state to take a stake in Opel as part of a possible bailout.

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.

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