Government criticised for bypassing Parliament in controversial EU-US anti-terror deal;
UK Europe Minister unaware of Commons debate on the issue
The Government has come under fierce criticism from MPs from both parties for its failure to give Parliament the eight-week period granted by the Lisbon Treaty to scrutinise a decision to 'opt in' to a controversial EU-US anti-terrorism data-sharing deal. PA reports that Sarah McCarthy-Fry, the Treasury Exchequer Secretary, was forced to answer an urgent question in the Commons yesterday as Michael Connarty, Chairman of the Commons European Scrutiny Committee, complained that the Committee and Parliament were being treated with "disdain and contempt". He said, "It was the first test of the Lisbon Treaty assurance and was a very bad start to the new process".
In a public lecture at the LSE yesterday evening, Open Europe asked Chris Bryant, the UK's Europe Minister, to comment on the debate in the Commons. However, Mr Bryant was not even aware that the Commons debate had happened remarking: "What on earth does this have to do with Sarah McCarthy-Fry, I don't think this is right". Then calling to an assistant, he asked "Did Sarah McCarthy-Fry answer a question today?", continuing "I'm really perplexed about it because if anyone would be answering EU [questions] it should be me...I don't know if I can say much more."
Meanwhile, it is looking more likely that MEPs will vote to reject the so-called SWIFT agreement, which establishes a data-sharing system on financial data between the EU and the US. The WSJ reports that the European Parliament's Civil Liberties Committee rejected the agreement yesterday - a decision that will have considerable sway when the full Parliament votes on the agreement next week.
EUobserver reports that MEPs were infuriated when EU ministers agreed the interim deal with the US on 30 November last year, just a day before the Lisbon Treaty came into force, which would have allowed MEPs the right to block the legislation. MEPs complained about being sidelined in negotiations with the US authorities and that the privacy guarantees for EU citizens were not satisfactory.
EUobserver reports that US Secretary of State Hillary Clinton called Jerzy Buzek, the President of the EU Parliament, to voice the US' concerns that the agreement may not be approved.
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Stock markets fall as fears over euro spread
The WSJ reports that stock markets plunged amid rising fears of a government debt default in Europe, highlighting the fear of contagion from Greece to other countries like Portugal and Spain. Blue-chip stock indexes in Spain and Portugal slumped nearly 6% and 5%, respectively, while an index of Europe's 600 biggest companies dropped 2.7%. The Telegraph reports that Julian Callow from Barclays Capital said the EU may need to invoke emergency treaty powers under Article 122 to halt the contagion, issuing an EU guarantee for Greek debt. "If not contained, this could result in a 'Lehman-style' tsunami spreading across much of the EU."
In Spain, default insurance surged 16 basis points after Nobel economist Paul Krugman said that "the biggest trouble spot isn't Greece, it's Spain". The article notes that Spanish Finance Minister Elena Salgado criticised EU Economics Commissioner, Joaquin Almunia, who she said helped trigger the panic flight from Iberian debt by pointing out that Spain and Portugal were in much the same mess as Greece.
The WSJ notes that "the market now believes a future bailout is more likely because the European Union would find it harder to abandon Greece if the country made an effort to fulfil its obligations."
Meanwhile, the Economist argues that calling in the IMF is the only way to restore confidence in Greece's finances. It argues, "Because Greece is a full member of the EU and the euro, any European lender would find it hard to convince markets that it could hang tough against political pressure and social protests. In contrast, the IMF is independent, can afford to be unpopular and has experience of bailing out indebted governments that nobody in Brussels (or Frankfurt) shares."
A separate article looks at the options for a potential EU bailout and notes that "A template for such a fund already exists. The EU has a loan facility to help members outside the euro with balance-of-payments problems. The fund's ceiling was raised to €50 billion last spring, to cope with the potential need for emergency loans to Hungary and others. The facility is financed by EU-backed bonds, issued as the need arises. Loans for Greece could be raised in the same way, though it would mean that countries outside the euro, including Britain and Sweden, would be liable if they were not repaid."
The Independent reports that the Greek government's emergency efforts to revive the country's ailing economy met with angry protests in Athens yesterday, as customs officials and tax collectors went on the first of an expected rash of strikes.
Open Europe blog Open Europe blog 2 WSJ WSJ: Hannon WSJ: Analysis Telegraph Independent EUobserver Independent 2 Irish Independent Irish Independent 2 WSJ Mail IHT: Norris Irish Times Die Welt FT Economist Economist 2 Economist 3
Mats Persson: What exactly did the EU want the US President to come all the way over to Madrid to talk about?
Writing for the Telegraph, Open Europe's Director Mats Persson argues that US President Barack Obama's decision to "snub" the EU is an "illustration of why Europe needs to concentrate on delivering policies for the 21st century, rather than on being seen as a 'global power'" and that "The EU's consistent failure is an inability to recognise that it is the former that brings about the latter, and not the reverse."
Mats notes that the Lisbon Treaty has always been seen by the European elite as a means of projecting European influence on the global stage but that "The truth is that the Lisbon Treaty locks in a failing model, an inward-looking model, that puts Brussels at the centre of the universe, when the challenges of the modern world are increasingly global. The awkward institutional set-up created by the Treaty does nothing to make Europe a more powerful or efficient global player. From Haiti to Copenhagen, this is becoming increasingly clear."
"If EU leaders really wanted to lure Obama to Europe, they could start by dropping their protectionist trade and agricultural policies and take the lead in the WTO talks; or providing a pragmatic and cost-effective solution to lowering emissions - one that the rest of the world could afford to follow; or creating a financial and regulatory framework which underpins global, sustainable initiatives rather than undermining them."
Meanwhile, the Economist's Charlemagne argues that the EU lacks dynamism because "lots of Europeans do not want to live in the most dynamic and competitive economy in the world. They prefer to work fewer hours than Americans or Japanese (about 10% fewer, on average), to take long holidays, and to retire as soon as possible."
The article adds, "European reactions to the cancelled Madrid summit were telling...Nobody mourned for specific ideas that Europe wanted to talk to Mr Obama about, because nobody has a clue what would have been on the agenda."
An editorial in the WSJ argues "From Washington's point of view, the world's rising powers are Brazil, China, India and others in the Asia-Pacific region. The 'special relationship' with Britain and close ties with the Central European allies remain critical to US security, but those can be nurtured apart from the EU. This has all been painfully sobering for Continentals who hailed the Obama ascendancy. Their infatuation with him was always in part a case of projection. Europe thought it had the first modern President eager to make the Old World an equal partner in running the planet."
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Germany weakens in its resistance to EU 'economic governance'
DPA reports on the joint press conference between French President Nicolas Sarkozy and German Chancellor Angela Merkel in Paris, in which it was announced that there would be a Franco-German initiative for the EU summit on 11 February. Mr. Sarkozy is quoted saying: "We will be there to present joint proposals on an issue that is of paramount importance in our eyes; the economic governance of the 27. This is a point on which we really agree with each other." Handelsblatt notes that this is the first time Mrs.Merkel has spoken of an "economic government" for the EU.
Handelsblatt notes: "This is a new tone because, since the introduction of the euro, France has insisted that the EU would let the informal Council of the Eurogroup become an economic government. Until now, the German government had resisted this, due to its concerns about the independence of the European Central Bank. The term 'economic government' was considered controversial. Now even Merkel mentions it."
DPA Stern Standaard Die Welt Sud Ouest
NATO mission to train Afghan army and police hampered by EU foot-dragging
The IHT reports that ahead of a major security and defence conference in Munich this weekend, NATO yesterday acknowledged it lacked almost half the trainers it had promised to help build up the army and police in Afghanistan. The article notes that the failure to send all the trainers promised in October underscores the difficulty the US-led military coalition faces in trying to get Europe to live up to its commitments, even though the Europeans favour a greater emphasis on training and development aid rather than military operations.
FT: UK must renegotiate its EU renewables targets
An editorial in the FT looks at Ofgem's report on the UK's energy market and notes that the UK is bound by an EU directive that stipulates that 15 per cent of its energy needs come from renewable sources by 2020, arguing "This is expensive and unnecessary." It concludes that the UK should renegotiate this commitment: "Changing a European treaty will not be easy. Britain will need to find allies in other countries similarly hard-pressed by the targets. But it should not be impossible. The growth and stability pact shows that any deal can be changed if enough member states find it a sweat."
FT: Leader Open Europe research
European Commission accused of "hoarding" €6 billion in competition policy fines
The Parliament magazine reports that the European Commission has been accused of "hoarding" €6billion raised from fines on companies that have engaged in anti-competitive practice, which include Intel and Microsoft. Conservative MEP Ashley Fox is quoted saying: "monies raised from anti-competition fines should ideally be returned to those consumers who have paid over the odds for products and services," instead of being held by the Commission as a surplus. Citing the UK as an example, Mr. Fox argues that if Britain were to receive a share of around 10% of the Commission surplus, the amount would be about €572 million, which he said would provide "a much needed boost to the UK coffers".
Hackers pocket £1.8m after accessing EU's emissions trading database
Der Spiegel reports that the European Commission plans to rework security loopholes in its internet systems, following last week's successful attack by hackers, in which EU emissions trading permits worth 3 million euros (£1.8m) were stolen using a spoof European Commission website.
Spiegel Die Presse Express
Romania said yesterday that it had approved an American proposal to place anti-ballistic missile interceptors on its soil, as part of a revamped US missile shield in eastern Europe.
In an interview with Le Monde, Guido Westerwelle, the German Foreign Minister says that Germany wants to strengthen its relationship with Poland as well as France and that the strengthening of one relationship does not mean the weakening of the other.
Potential instability in Bosnia and violence in South Caucasus will pose the main threats to EU security in 2010, the US' intelligence chief, Dennis C. Blair, has said.
China filed a complaint yesterday against European Union shoe tariffs at the World Trade Organisation.
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EUobserver reports of a potential collapse of Ukraine's presidential election this weekend following a last-minute change to the electoral law, which has prompted Prime Minister Yulia Tymoshenko to threaten to declare the poll invalid.
The Prime Minister of Iceland, Johanna Sigurdardottir, has warned the European Commission of the "damage" that could be caused by making links between the ongoing Icesave banking dispute and future economic support being delivered by the International Monetary Fund (IMF).
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.