Wednesday, March 17, 2010

Open Europe press summary: 17 March 2010

Ministers' vote on AIFM Directive postponed until after UK general election;
Brown accused of trying to hide weakness of UK Government
The FT reports that European finance ministers yesterday postponed a vote on the EU's proposed AIFM Directive to regulate hedge funds and private equity firms after "a last-minute intervention" by Gordon Brown.  Ministers are still at loggerheads over how to regulate funds and managers established outside the EU. The Directive is likely to come up for discussion again at the next meeting of finance ministers in May or June and the Independent quotes Spanish Finance Minister Elena Salgado saying, "It is a major priority of ours to get a deal on hedge funds through during our presidency, so we still have a few weeks ahead of us to get this done."
The Telegraph notes that Brown called his Spanish counterpart Jose Luis Rodriguez Zapatero, whose country holds the EU Presidency, insisting Britain would not accept a compromise plan. In the FT, Nikki Tait writes, "Britain, if not completely isolated, would almost certainly have lacked the votes to block approval of the Spanish compromise."
However, the Times quotes the Conservatives' City spokesman Mark Hoban saying that the decision to drop the vote on the Directive "hides the fundamental weakness in the Government's position." He added, "If the debate had gone ahead, the Government's failure to build alliances to block damaging parts of the directive would have been obvious for all to see."
The Directive will be agreed under qualified majority voting, meaning the UK can still be outvoted if it doesn't get the changes it is seeking to the Directive. In the Independent, David Prosser writes, "don't be too surprised if, after the election, Britain quietly gives way on a good deal of its current bargaining position. That's if Labour wins - if not, this matter will be the Tories' problem." In the Times, David Wighton concurs: "So the French were persuaded to park the whole thing until...well, until after the election. Then, if a returned Labour government is forced to climb down, it will be less politically damaging. Or, more likely, it will prove a real hospital pass from Alistair Darling to George Osborne."
Open Europe's findings that the Directive, if passed in its current form, could cost the EU economy €9.2 billion in lost tax revenues are quoted by Hungarian business daily Vilaggazdasag.
Meanwhile, Euractiv notes that US officials remain concerned about protectionist elements of the Directive that could restrict US firms' access to the EU market. "The best thing for effective regulation would be for the EU to drop limited access on passports and rules on depositaries and then to talk to the US about getting tough on disclosure rules and leverage limits," an official said.
OE research: AIFM Directive OE research: AIFM-Investment Trusts OE press release OE blog Guardian FT FT 2 FT 3 FT 4 Irish Times BBC European Voice EUobserver EurActiv Telegraph El Pais El Pais 2 2 El Mundo ABC Világgazdaság La Tribune Le Point Les Echos ECR City AM Independent Times IHT EurActiv Independent: Prosser Times: Wighton
Angela Merkel planning to block finance ministers' agreement on Greek aid package;
Belgian PM: Greater financial integration is "inevitable" consequence of euro
Handelsblatt reports that German Chancellor Angela Merkel is planning to block the proposed outline of a deal for financial assistance to Greece, a plan for which eurozone finance ministers agreed the 'technicalities' on Monday. German Finance Secretary Jörg Asmussen is cited saying that no decision on whether to go ahead with the plan is expected at the next European Council meeting on 25 March.
The Telegraph reports that German Finance Minister Wolgang Schäuble told the Bundestag that the assistance agreed would be a "last resort" if Greece is near default. He added that he expected a political decision on the technical agreement to be taken at the next European Council meeting, in contrast to Angela Merkel's reported comments.
The FT reports that Greece has expressed disappointment over the eurozone's failure to offer a specific pledge of financial aid, with Greek PM George Papandreou saying the deal for a contingency plan for Greece was "a step forward, but it's not enough...Greece cannot go on borrowing at such high interest rates". Credit rating agency Standard and Poor's gave Greece a vote of confidence by affirming its BBB-plus credit rating, but warning that the long-term outlook remained negative.
Meanwhile in an interview with EUobserver, Belgian PM Yves Leterme said that joint economic governance between some, or all EU member states, would be an inevitable consequence of the creation of the single currency, adding: "You can have doubts about the political will today...but the idea of strengthened economic government has been put on the table and will make progress. In the end, the EDA [European Debt Agency] or something like it will become a reality. I'm convinced of this...It's about Europe's financial stability and it's not an ideological debate about federalism. I myself am a federalist. But more integration and deeper integration are simply logical consequences of having a single currency."
Advisors to the Belgian PM said that although a proposed European Monetary Fund would most likely need a new EU treaty, a debt agency could be set up on the basis of Article 136 of the EU treaties. He added that pro-integration countries must take action on proposals soon, adding: "[The Greek crisis] creates a momentum which we have to seize."
Meanwhile Les Echos reports that during a speech in the German Bundestag Chancellor Merkel said that, "in the future, we need to introduce a clause in the [EU] Treaties providing for the possibility to expel a country from the Eurozone, in case it repeatedly fails to fulfil its commitments in the long term".
FT FT 2 Irish Times: Beesley BBC: Hewitt blog IHT IHT 2 Telegraph El Pais ABC Les Echos Le Monde Les Echos 2 Handelsblatt EUobserver Telegraph: Hannan blog Le Monde 2
Barnier announces plans to crack down on CDS swaps
Reuters reports that Internal Market Commissioner Michel Barnier has said that he will present proposals to crack down on "naked" selling and speculation in the market for credit default swaps (CDS), with a draft law ready as soon as June. 
The head of the European Parliament's Committee on Economic and Monetary Affairs (ECON), Sharon Bowles has criticised a potential ban on the selling of sovereign credit default swaps.  Commission President José Manuel Barroso said last week that the speculative trade in sovereign CDS had "aggravated" the Greek crisis, but Bowles said there is not enough evidence for the claim.
Reuters Les Echos Europolitics
Irish 'Yes' campaign group warns against further EU treaties
The Irish Times reports that the group 'Ireland for Europe', which campaigned for a Yes vote in Ireland during the second Lisbon Treaty referendum, has cautioned against another referendum on an EU treaty for a long time. In a book about the campaign, one of the group's leaders Professor Brigid Laffan, Vice-President of UCD, writes: "The EU must now work with the treaties and institutions that it already has for at least 15 years, as both the domestic systems and Europe's electorates cannot cope with further treaty change."
Irish Times OE blog
EU members to repay €350 million in misspent EU farm subsidies
EUobserver reports that the European Commission is set to reclaim €346.5 million of "unduly spent" CAP funds from 20 member states who failed to apply proper financial controls. Greece will have to pay back the largest amount - €132.6 million - for paying cotton farmers who were "overshooting" EU quotas. The UK will have to pay back €14.2 million for failing to meet reporting deadlines.
EUobserver Press Release Diário Digital AGI ASCA
EU civil servants to wait a year for ruling on 3.7% pay rise
Belgian daily HLN reports that 44,000 EU civil servants will have to wait until 2011 to know whether they are entitled to a pay rise of 3.7%. EU member states refused to agree to the proposed pay rise in December last year.  Instead a 1.85% was agreed but the European Commission has lodged a complaint with the European Court of Justice, seeking the full 3.7% rise. The ECJ has now rejected the Commission's demand to fast-track the procedure, and is unlikely to give a verdict before July 2011.
HLN OE blog OE blog 2
Swedish Radio interviewed Open Europe's Pieter Cleppe on how the EU Commission subsidises the media such as Café Babel or Euradionantes. He said: "Some of them are doing a good job, but their credibility is being damaged because of the fact that they get EU money. Others are proper propaganda outlets".
Swedish Radio EUobserver Open Europe Research


Germany defends domination of eurozone
In a speech in the German Bundestag yesterday, Germany's Finance Minister Wolfgang Schäuble rejected recent claims from France and other European countries that Germany's export-driven economy is putting undue pressure on its neighbours, and is quoted in the FT saying: "I want to repudiate, very clearly, calmly and coolly, the criticism ... that those who are reasonably successful in competition are to blame for the problems of others".  Handelsblatt quotes Anton Börner, President of the Federal Association for Wholesale and Foreign Trade (BGA) as saying "The accusation that German exports harm the economy of other European member states is absurd".
The FT's Alphaville blog quotes Lombard Street Research's Charles Dumas, taking the view that: "The comic aspect of the attempts by Germany to make the rest of Europe converge on German practice is that the German economic performance has been dismal. What is now being enforced is that nobody else in the Eurozone - or its irrational aspirant members - is to be allowed any growth either. Europe is being forced into a German lowest common denominator..."
FT: Alphaville blog Welt Les Echos FT Le Monde Le Monde Handelsblatt
Danish government complains that EU's 'mutual recognition' of court rulings could undermine free speech
EUobserver reports that Danish Justice Minister Lars Barfoed has asked the European Commission to intervene to stop a Saudi Arabian lawyer, Faisal Yamani, from using British courts to bring a libel case against Danish newspapers who published cartoons portraying the Prophet Mohammed. He is quoted saying, "it would be taking it to the extreme if a UK court could rule against the Danish media and then require compensation and court costs to be paid."
The Telegraph notes that EU officials have acknowledged that libel judgements in the British courts have become a major issue since "Rome II" rules on mutual recognition of European court rulings entered into force last year. In the negotiations, libel and defamation law was left out of the rules on conflicts of jurisdiction, allowing Mr. Yamani to pursue the case in the UK courts, which have tougher libel laws than their Danish counterparts.
Telegraph EUobserver
MEPs on the European Parliament's Environment Committee have backed proposals to oblige food manufacturers to display the calorie count of food and drink products on the front of packaging. MEPs also voted for all foods (including processed foods) to be labelled with their country of origin. The EP will now begin negotiations with the Council, with a plenary vote expected in May.
Deutsche Welle Hamburger Abendblatt Handelsblatt The Parliament Europe 1 FT European Voice
Writing in the FT David Gardner looks at the Conservatives' attitude towards the EU and argues, "Europe is a need not a luxury, an opportunity not a threat - at least for those who know how to exploit it."
FT: Gardner
EUobserver reports that a new study from Amnesty International has accused several EU countries, including Spain, Germany and the Czech Republic, of trading in equipment used in torture, despite a 2006 EU law banning the trade. 
EUobserver La Repubblica In The News
The Portuguese government has announced a far-reaching programme of privatisation and reducing public control in 17 different sectors, including airlines, banking and energy. The plan was presented to EU finance ministers yesterday, with the Portuguese national parliament to debate the matter on 25 March, before it is officially presented to EU authorities, reports EUobserver.
City AM reports that, according to the Centre for Economics and Business Research (CEBR), annual growth in the US will be just above three percent in 2010 and then nearly 3.5 percent in 2011. The European Union will lag behind, growing just 0.7 percent in 2010 and 1.3 percent in 2011.
City AM

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.

No comments: