Monday, January 11, 2010

Open Europe press summary: 11 January 2010

UK could face £7bn bill if the EU bails out Greece;
Anatole Kaletsky: The eurozone will be tested to "near-destruction"
The Mail on Sunday reported that if an EU rescue fund for the troubled Greek economy matched the country's budget deficit, the UK would be asked for £7billion, assuming contributions matched each country's share of the total EU economy. The article noted that, until now, discussion has focused on whether fellow eurozone members could be asked to bail out Greece. But under Article 122 of the EU Treaty, all EU members could be liable. The Treaty article says: "Where a member state is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the council of ministers, on a proposal from the European Commission, may grant, under certain conditions, Union financial assistance."
The paper reported that the EU Council decision would be made on a majority vote with Britain having no veto. If other troubled eurozone members such as Ireland or Spain were excused from making a contribution, Britain's share could be even larger. A Treasury source would not comment on whether any official calculations have been made regarding Britain's potential exposure.
In the WSJ, Erwin Stelzer writes "we are about to learn whether the euro can survive a two-speed euro zone. If France and Germany do recover at a rate that requires the ECB to tighten so as to avoid inflation, the laggards would be hard hit - higher interest rates don't make life easier in recession-bound economies."
He adds, "Germany, France and other countries have too big a stake in the long-run viability of their new currency to see Greece do what its politicians might feel they have to do to preserve their alliance with the public-sector trade unions - drop the euro, and re-establish their national currency, sufficiently devalued to stimulate exports and economic growth. It is unlikely to come to that - there is so much political capital invested in the euro by the political class that even the stern and parsimonious [German Chancellor] Angela Merkel will in the end contribute to a bailout fund if necessary."
In the Times, Anatole Kaletsky argues that "before this crisis is completely finished, the cohesion of the eurozone will be tested to near-destruction."
Meanwhile, EurActiv reports that eurozone unemployment reached an 11-year high in November and stands at 10% of the workforce, the first time it has reached this figure since the introduction of the single currency.
Mail on Sunday Bloomberg EurActiv Weekend FT WSJ: Stelzer Times: Kaletsky FT FT 2
Former head of Civil Service: Treasury needs to be a bigger player in EU financial services policy
Writing in the FT former Cabinet Secretary and head of the Civil Service Lord Turnbull suggests six steps to improve the Treasury and help it meet new challenges. He writes, "The Treasury needs also to be a bigger player in EU financial services policy. It has been behind the game recently in allowing two seriously flawed directives to be promulgated, the directive on alternative investment fund managers and Solvency II. Hence the need for a heavyweight financial secretary."
FT: Turnbull Open Europe research: AIFM Directive
New European Commission will treat tax harmonisation as a high priority
The Irish Mail reports that sources in Brussels have indicated that the new European Commission will treat the 'harmonisation' of taxes across the bloc as a matter of high priority. Open Europe's Pieter Cleppe is quoted saying that "the tax harmonisation plan will impinge on national tax sovereignty and could have severe consequences for the Irish economy", adding that "Germany and France are very angry at Ireland because Ireland is attracting business and tax income from other countries due to their low taxes" and "many of the large EU states are eager to end Ireland's dominance in attracting foreign direct investment".
Irish Daily Mail

Germany opposes Spanish call for economic sanctions to enforce EU economic plan
EUobserver reports that "a call by the Spanish EU presidency for financial sanctions under a new EU long-term growth strategy has sounded alarm bells in Berlin". It notes that Spanish PM Jose Luis Zapatero's call for "corrective measures" for member states that fail to meet the EU's 10-year economic strategy programme has "prompted a chilly response from Germany". The German Economic Minister, Rainer Bruderle, warned against creating "a new bureaucracy," adding, "I do not think the idea of imposing sanctions on member states for not fulfilling fixed targets is sensible".

On her Mail blog, Mary Ellen Synon comments: "only Day 8 of the new EU under the Lisbon Treaty...and calls are already being made that the Commission must be granted new powers, in addition to all the new powers the Lisbon Treaty already hands to the eurocrats. This is yet another example of how the EU works by 'permanent revolution.' No agreement is ever final, nothing is ever settled - no national power is ever safe. All that is ever final is the relentless push towards 'ever-closer union'".

Meanwhile, the Economist's Charlemagne blog notes that ALDE group leader Guy Verhofstadt's view is that the Commission needs "sticks and carrots", in order for the economic strategy to work, which "would mean additional EU structural funds for countries delivering credible reform plans and results...I see three big problems with this idea. The first is, governments will never stand for it. The second is, I fear it may be counter-productive. The third is, this focus on top-down process ignores the real reason Europe is not more dynamic: lots of voters do not want it to be."
EU Observer Handelsblatt Eurointelligence
El Pais El Mundo European Voice Mail: Synon blog Economist: Charlemagne notebook

Incoming Slovakian Commissioner warns of "more political" EU Commission
In an interview with EurActiv, incoming Slovakian Inter-institutional Relations Commissioner Maros Sefcovic has said that "Due to a stronger and more political Parliament, it is natural to have a more political Commission". He said that the expansion of the use of qualified majority voting will likely speed up the legislative process: "Decisions made by qualified majority voting will in fact count for more than 90% of areas...The veto vote will no longer be the last thing to rely on. I believe that the further step towards qualified majority voting will speed up decision-making and make the process more efficient."
Cathy Ashton is first Commissioner to face European Parliament hearings today
Incoming EU Commissioners will face hearings before the European Parliament this week, beginning today with EU Foreign Minister Catherine Ashton and Janusz Lewandowski, the Polish nominee for the EU budget portfolio. European Parliament President Jerzy Buzek warned that there would be "no free ride" for any nominees. A vote on the entire Commission is expected on 26 January. The Times quotes an EU source saying: "She [Cathy Ashton] will have a tough time at the hearing simply because there is a lot of unease about her performance so far". The official said that in a key meeting of foreign ministers last month, Lady Ashton continually deferred to Carl Bildt, the Swedish Foreign Minister, which held the EU's rotating presidency.
The article also quotes Conservative MEP Charles Tannock, a member of the Foreign Affairs Committee that will question Lady Ashton, saying: "To be honest, she does not have to impress the committee. She just has to get a bare pass, because these appointments are all a stitch-up between the political groups, and the Socialists will bend over backwards to protect her."
On his BBC blog Gavin Hewitt writes that he expects "the questions will probe her plans for Europe's new diplomatic service, its cost and how it will be set up. Above all, she will have to answer how all of this will give Europe a stronger and more coherent voice in the world...For these few days individuals who will hold considerable power within Europe will be held to account in public."
Meanwhile in his Sunday Telegraph column Christopher Booker argued that until the new Commissioners take office, "we continue to be ruled by the old commissioners who, under the rules, should have retired on October 31."
WSJ FT EUobserver BBC: Hewitt blog Times Irish Times Sunday Telegraph: Booker
UK energy bills will rise to pay for £75bn wind energy projects under EU targets
Saturday's Mail reported that UK consumers face rising energy bills to pay for the Government's £75billion plan to build 6,400 giant wind turbines around the coast - a measure it argues is required to meet EU renewable energy targets. Under the targets, Britain must generate 15 percent of all energy used on fuel, transport and electricity from 'renewable' sources by 2020.
Meanwhile, PA notes that UK wildlife charity the RSPB has released a report highlighting a range of environmental measures which it claims are squandering taxpayers' money on damaging schemes, including EU targets for biofuels and "the £2.5 billion in EU subsidies that goes to landowners and farmers each year, yet does little to protect wildlife or provide public services like improved water quality." In the Sunday Times, Dominic Lawson looked at the debate on climate policy, noting the many effects of EU policies such as the banning of incandescent light bulbs and the subsidised closure of Corus' steel plant in Redcar.
Mail Guardian WSJ RSPB Sunday Times: Lawson Open Europe research
Conservatives would limit immigration from any new countries joining EU
The Express reports that David Cameron has pledged to cut net immigration into the UK by 75 percent. Proposals include an annual limit on non-EU immigration, and curbs on the right to work in Britain of citizens of any new countries which join the EU. Meanwhile, a leader in the Telegraph argues "It is a shame that Mr Cameron did not discuss Europe yesterday. Our control over immigration is enormously limited by the law of the European Union, leading to scandalous abuses. British registrars have reported that Pakistani men are contracting marriages with European women they barely know. East European gangs are involved in the racket, which has been made possible by a Law Lords' ruling that cast aside tough Home Office regulations."
Express Telegraph: Leader

Spain to revive data-sharing proposal rejected over privacy concerns
European Voice reports that the Spanish EU Presidency has said it will seek increased sharing of airline passenger data between member states, as part of its response to last month's failed airline terrorist attack. Spain's Interior Minister Alfredo Pérez Rubalcaba said they would revive a proposal, first presented by the European Commission in 2007, for the sharing of so-called Passenger Name Record (PNR) data. The Commission last year withdrew its PNR proposal after the EP Committee on Civil Liberties raised concerns that the information-sharing envisaged in the proposal would infringe people's right to privacy. A complaint about the proposal was also raised before Germany's Constitutional Court.

European Voice Open Europe research
Poland expects less cash from new EU budget
Polish news site Nasze Miasto reports that, as MEPs today begin to discuss the 2014-2020 EU budget, it is expected that Poland will receive considerably less in allocations than the €67 billion it received between 2007-2013.
Nasze Miasto
Spanish EU Presidency reassures Iceland that Icesave issue separate to EU membership bid
PA reports that the Icelandic government passed a bill on Friday approving a referendum on the Icesave bill, which was rejected by the Icelandic President last week. Voters will be asked whether or not to ratify the bill on a date before 6 March.
EUobserver reports that a statement from the Icelandic Foreign Ministry over the weekend said: "The Spanish EU Presidency viewed the Icesave issue and Iceland's EU application as separate issues, and that the new situation that has arisen in Iceland would not have any impact on EU's treatment of the application". On Friday Spanish Foreign Minister Miguel Angel Moratinos had told reporters that the dispute "could slow the [EU] negotiation process a bit."
Writing in Saturday's Times Bronwen Maddox argued that "In asserting that Iceland must repay in full, Britain is making two contestable assertions. The first is that if Iceland's private fund can't pay, the responsibility passes to the Government and taxpayers. EU rules do not say this, if only because they fail to provide for such dramatic circumstances." Writing in the FT, Icelandic economist Magnús Árni Skúlason argues that "the legality of the claims and the demand for a state guarantee of the Icelandic deposit guarantee scheme need to be clarified by the European Court of Justice."
Times: Maddox Swedish Television FT FT: Comment EUobserver European Voice EurActiv
In an interview with the Polish TVP news, Open Europe's Pieter Cleppe commented on the European Commission's decision to sue EU member states over the 3.7% pay rise for EU staff. He said: "EU staffers should maybe show some of the 'solidarity' of which they are often talking. It would be wrong to assume that EU staffers are not aware of how they are damaging the image of the EU by doing that. It just raises the suspicion that they are only there for the money." Open Europe's Mats Persson was quoted by Hungarian news site Origo commenting on the dispute.
Origo OE blog

Handelsblatt reports that the European Parliament's Economic Affairs Committee has invited the three candidates for Vice-Presidency of the European Central Bank for a discussion. It is the first time that candidates have been invited before the selection decision. Eurozone ministers will make a decision on the post on 18 January or 15 February.
No link

The FTD reports that EU anti-terrorism coordinator Gilles de Kerchove has said he is against a general application of the new full body scanners for airports, saying they should be used on selected flights or passengers.
The EU has been urged by European trade unions and industry groups to take a firmer stance against illegal file sharing on the internet, according to the Guardian.
Saturday's Guardian reported that the Spanish EU Presidency has launched a campaign for a Europe-wide system of restraint orders aimed at curbing violence against women, calling for crime statistics to be reconfigured to highlight gender violence and for EU legislation offering protection to battered women across national borders.
German Chancellor Angela Merkel's "presidential style" of leadership has brought about division within her CDU party, according to a group of senior regional officials from the party, the WSJ reports.
A special Guardian series identifies Russian energy giant Gazprom as one of five companies to shape the next decade, and writes: "one company dominates not just existing European supply but, more importantly, its future sources."
European Voice reports that unofficial results indicate that Social Democrat Ivo Josipović has been elected as Croatia's President with 61.2% of the vote. He will serve a five year term, and the article notes that he will almost certainly preside over Croatia's entry into the EU.
European Voice EurActiv BBC EUobserver
An ICM poll for the Sunday Telegraph showed Labour on 30 percent, one point higher than last month's poll, despite a week of party in-fighting and a failed plot against Gordon Brown. The Conservatives were unchanged on 40 percent and the Liberal Democrats were down one point on 18 percent.
Sunday Telegraph
Conservatives shelve plans to scrap Human Rights Act
The News of the World reported that Conservative plans to scrap the Human Rights Act are to be shelved - despite a promise to get rid of it immediately once they come to power. In the paper, Vernon Bogdanor, Professor of Government at Oxford University noted that "This has nothing to do with the EU. It is administered by a quite different body, the Council of Europe, which has no power over individual governments. However, in 1998 Tony Blair passed a Human Rights Act ensuring these European rights became part of our law."
The Independent reports that Green MEP Caroline Lucas is on course to win the first Westminster seat of Brighton Pavilion at the next General Election and become the first ever Green MP. The Greens currently hold an eight-point lead over the Conservatives for the seat.

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