Tuesday, January 05, 2010

Open Europe press summary: 5 January 2010

Greece risks sanctions if its economic plans fail to get EU approval
The FT reports that officials from the European Central Bank and European Commission will visit Athens tomorrow to inspect the Greek government's draft economic programme, and assess whether it is likely to achieve a sizeable reduction in the budget deficit.
Last month, the Greek parliament approved the 2010 budget that foresees reducing the budget deficit to less than 9 percent of GDP, from an anticipated 12.7 percent in 2009. However, according to Greek financial website Ta Nea, the deficit last year may have in fact reached 14.5 percent of GDP.
Under EU rules the Greek government must also provide the Commission with a longer-term stability plan, setting out how it plans to reduce its deficit. The Commission, which expects to receive a final version of the plan in the first half of this month, will make a recommendation in early February on when, and at what speed Greece should reduce its deficit to the 3 percent EU limit. Other EU governments are expected to endorse the Commission's recommendation soon after.
The Telegraph reports that if Greece fails to assuage the Eurogroup by mid-February, it will face the threat of sanctions: a suspension of (European Investment Bank) loans, and ultimately fines. Greece has been under "monthly monitoring" since mid-2009 by the Eurogroup of EU finance ministers, a task delegated to Commission officials. The article argues that they are effectively policing details of the Greek budget, which is a policy that takes the EU into "hazardous terrain", since it is unclear whether any nation "will tolerate such an erosion of fiscal sovereignty for long."
In an interview with Handelsblatt, Morgan Stanley economist Joachim Fels notes that, "when budgetary reforms in Greece fail to deliver, then the rest of the Eurozone will help. This is because the consequences for the Eurozone financial system are too important. After all, Greek government bonds are being held by banks, insurance companies and others investors in all of Europe".
Meanwhile, the Economist's Charlemagne notebook cautions on the danger of using "peripheral" as a shorthand description for "broke" for EU countries, pointing out "The way that some press reports talk about the dangers facing 'peripheral' members of the Eurozone, you would think that bond yield spreads had been replaced by distance charts, as predictors of sovereign default."
Telegraph FT Irish Times EUobserver BBC FT Economist: Charlemagne notebook Handelsblatt
Spain claims support from EU's big three for new counter-terrorism body
EUobserver reports that the Spanish EU Presidency's plan to set up a special EU unit aimed at sharing counter-terrorism intelligence among member states is supported by the UK, Germany, France, Denmark, the Netherlands, Italy, Belgium and Portugal, according to Spanish sources. The article notes that the new body will facilitate the direct exchange of intelligence between two or several member states in close co-operation with the EU's existing special counter-terrorism co-ordinator, Gilles de Kerchove, and the EU Joint Situation Centre (SitCen) - a Brussels-based crisis management unit which includes counter-terrorism activities.
Austrian daily Der Standard reports that there is scepticism towards Spain's proposal, noting that the European Commission doesn't want to announce its position before an EU meeting in Madrid on Friday and that some countries' security services doubt whether agents will be willing to share sensitive national information. The article reports that a meeting of anti-terrorism commanders is planned for 21 and 22 January in order to discuss the establishment of the new counter-terrorism body, which may include the exchange of national experts between member states.
The Irish Times notes that the Lisbon Treaty empowers member states to deepen their security co-operation with the creation of a standing committee within the European Council, known as COSI, "to ensure that operational co-operation on internal security is promoted and strengthened".
Irish Times EUobserver Standard Le Figaro Open Europe research
German CSU party wants to "limit the influence of Brussels on Germany"
Frankfurter Allgemeine Zeitung reports that the German CSU party, the Bavarian sister party of German Chancellor Angela Merkel's Christian Democrats, will pledge to "limit the influence of Brussels on Germany" at its party conference on Wednesday. The newspaper has seen the party's draft EU policy program which reads: "not every problem in Europe is a problem for Europe. All problems which can be solved by the member states should be solved there." The policy paper also rejects a unified European social policy and the extension of EU discrimination regulations. In justice and home affairs, it argues that national policies must be given priority, warning that the European Commission should "not put into question national best practices".
The document also warns the European Commission against pursuing the introduction of an EU-wide tax and states that, even if the Lisbon Treaty gives the EU new competences, "no additional resources should be made available", arguing that increased spending should be financed by savings elsewhere. The text also calls for the EU to end its enlargement negotiations with Turkey.
No link
Tony Barber: Van Rompuy is making his mark and using his "authority to the full"
On his FT Brussels blog, Tony Barber notes that newly appointed EU President Herman Van Rompuy "is already making an impact on the way the EU goes about its work." Van Rompuy has called on EU leaders to attend an extraordinary summit on economic policy to be held on 11 February and Barber notes that "By calling an unscheduled summit, Van Rompuy was signalling to the world that he intends to use his presidential authority to the full." Barber adds, "It became clear last month that EU summits will take on a substantially different format under Van Rompuy.  Foreign ministers of member-states will, for example, no longer be automatically invited to the regular summits held in Brussels four times a year."
Le Monde looks at the challenges facing Van Rompuy, noting that he will have to find a balance with the Spanish rotating Presidency and establish himself among world leaders whilst not stepping on the toes of the EU's big countries.
Open Europe's Stephen Booth was quoted on Czech news site Kurzy discussing the salary and benefits of EU President Herman Van Rompuy.
FT: Brussels blog Kurzy Le Monde
The Coulisses de Bruxelles blog reports that the beginning of the hearings of the new Commissioners before the European Parliament, which had been scheduled for 11January, risk being postponed because of another strike of a large number of EU civil servants, including the interpreters working at the Parliament. This would extend the so-called "daily business" period, during which the Commission is not allowed to take any crucial decisions.
Coulisses de Bruxelles
The Telegraph reports that Goldman Sachs is the latest investment bank to review the location of its London operations, and suggests that the bonus tax, combined with the introduction of the 50% top rate of income tax, and increased EU financial services regulation "has led to outrage in the City".
Following the UK's decision to introduce full-body scanners at airports, Spain and Germany have both ruled out the immediate use of the scanners. The European Commission, which could theoretically propose EU-wide legislation on body scanners, said it was "analysing" the use of full-body scanners at airports.
FT Bloomberg
The Independent reports that Alistair Darling yesterday urged Iceland to ratify a Bill that would see the recession-hit country repay more than €3.8bn lost by savers in Britain and the Netherlands when the online savings bank Icesave went bust in 2008.
Independent FT
It is widely reported that a hacker yesterday infiltrated the Spanish EU Presidency's official website and replaced a picture of Spanish PM Jose Luis Rodriguez Zapatero with one of the fictional Rowan Atkinson character, Mr Bean.
Telegraph Independent FT Guido Fawkes blog BBC Le Monde
The Guardian reports that new regulations, under the EU's batteries directive, come into force this month that require retailers selling batteries to provide collection and recycling facilities for their eventual disposal.
EUobserver reports that Iran has denied that it cancelled a planned trip by MEPs to the country, claiming they had postponed the visit themselves. German Green MEP Barbara Lochbihler indicated that the Iranian Ambassador to Brussels, Ali Asghar Khaji, had blocked the visit, scheduled for 7-11 January.
EUobserver reports that Bulgaria is threatening to block Turkey's application to join the EU unless it pays out billions of euros in compensation for displaced people, in a case dating back to the days of the Ottoman Empire.
EurActiv reports that the Spain has unveiled an art installation to mark its six month EU Presidency in the EU Council's Justus Lipsius building, consisting of a video installation featuring men, women and children involved in different activities: walking across an electric carpet, climbing it, cleaning it and picking up luggage.

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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