Monday, March 22, 2010

Open Europe press summary: 22 March 2010

On Thursday 25 March Open Europe is holding an event in Brussels from 2 - 3.30pm, entitled "The AIFM Directive: Striking the right balance between protection and growth?" Speaking at the event will be: Gunnar Hökmark, MEP for Sweden (EPP) and Member of the EP's Committee on Economic and Monetary Affairs; Othmar Karas, MEP for Austria (EPP) and Member of the EP's Committee on Economic and Monetary Affairs; Uwe Eiteljoerge, European Commission, DG Internal Market, Asset Management Unit; Karel Lannoo, CEO, Centre for European Policy Studies; and Mats Persson, Director, Open Europe.


Places are limited. If you would like to attend, please RSVP to Pieter Cleppe at or Tel: 00 32 2 540 86 25.




Barroso brands Merkel's call to expel profligate countries from the euro "absurd"

In an interview with France 24, Commission President Jose Manuel Barroso dismissed Chancellor Angela Merkel's suggestion that the EU needed a mechanism to expel member states from the euro. "I do not comment on other's comments," he said, but added: "What I can tell you is the position of the Commission...currently, excluding a member state from the eurozone is not possible. It's absurd." In an interview with Handelsblatt, he said, "After the hard time we had ratifying the Lisbon Treaty, I don't want to philosophise on further treaty amendments".


According to Euractiv, Barroso did however stress that surveillance of eurozone countries should be strengthened. "This is what we are going to put forward next month: some mechanism [...] that will guarantee that a country can in fact respect the fundamental principle of fiscal stability" he said.

EurActiv France 24


France and Germany split over role of IMF in Greek bailout

The Guardian reports that German Chancellor Angela Merkel and European Commission President Jose Manuel Barroso are "set for a showdown" over a potential EU rescue package for Greece. The Weekend FT reported that Barroso has urged EU leaders to use this week's two day summit in Brussels to reach an explicit agreement on the details of any aid, while El Pais reports that Spanish Foreign Minister Miguel Angel Moratinos has said he wants an agreement to be reached at the summit.


However, the WSJ notes that German Chancellor Angela Merkel yesterday warned other European leaders against unsettling financial markets by raising "false expectations" that there will be a decision on aid for Greece this week. She said, "I don't see that Greece needs money at the moment, and the Greek government has confirmed that." He added, "I believe that as long as Greece doesn't need help this issue doesn't have to be at the forefront of our talks."


Meanwhile, Saturday's Times reported that France and Germany are split over the prospect of the IMF helping Greece, with Germany's stance softening and France insisting on a European solution. The article quotes a board member of Germany's central bank saying that Greece had not done enough to mend its finances. Asked what Greece should do if it could not refinance its debt, Thilo Sarrazin said: "Then it should do what every defaulter has to do and file for insolvency."

Die Welt reports that confidential papers, leaked to the paper by high ranking EU diplomats, reveal that EU leaders are considering a joint EU-IMF solution. The WSJ notes that although Merkel would prefer a joint solution, German Finance Minister Wolfgang Schäuble has expressed strong reservations about IMF involvement. A leader in the FT argues "The Fund is the best body to help a country that has messed up its finances."


An FT/Harris poll has found that almost a third of Germans believe Greece should be asked to leave the eurozone while it sorts out it's finances and that over 60 percent were opposed to the German government helping Greece with its budget deficit. Some 40 percent of Germans also thought they would be better off outside the euro.

WSJ WSJ 2 EUobserver FT Guardian IHT EurActiv EUobserver European Voice Saturday's Times Saturday's Independent Weekend FT Bloomberg FT: Leader Reuters WSJ: Editorial Reuters Handelsblatt El Pais AGI Reuters Italia Nieuwsblad


German MEP says EU external action service is being hijacked by France

Euractiv informs that Catherine Ashton will unveil her long-awaited proposal for setting up the European External Action Service during this week. EUobserver reports that EU member states are calling for more money and clearer powers for the head of the EU's diplomatic corps, as foreign ministers meet in Brussels today to review plans for the new institution. It reports that an internal paper drafted by the Spanish EU presidency strikes a blow against the European Commission by saying the European External Action Service (EEAS) should make the big decisions on how to spend the €6 billion a year development budget. The paper also calls for the commission to stay out of the management of foreign embassies.


Another EUobserver article reports that Ashton's draft proposal for the structure of the EEAS has been criticised by German liberal MEP Alexander Graf Lambsdorff for being "a continuation of French policy by other means." He said it accords too much power to the secretary general of the service, on the model of the French foreign ministry. The job of Secretary General is being tipped go to the French Ambassador to the US, Pierre Vimont, or the Secretary General of the French foreign ministry, Pierre Sellal. He will have unrivalled access to Ms Ashton and will control any communications sent up to her from the service.

EUobserver EUobserver 2 Euractiv Express Daily Mail


The Parliament reported from Open Europe's debate last week, during which the Conservatives' leader in the European Parliament, Timothy Kirkhope MEP, set out the party's potential European policy should they win the election.

The Parliament Open Europe events


Eurozone comment round-up;

Münchau: Greece and others cannot sustain EMU with Germany under current policies

A number of comment pieces in the papers look at the issue of diverging economic competitiveness between eurozone states. In a letter to the FT German government spokesman Ulrich Wilhelm argues that the "key to correcting imbalances in the eurozone and restoring fiscal stability lies in raising the competitiveness of Europe as a whole."

Writing for the paper, Wolfgang Münchau argues that at least four countries: Greece, Spain, Portugal and Ireland, "are probably not in a position to maintain a monetary union with Germany under current policies indefinitely...It would be unreasonable to ask Germany to raise wages or cut exports, but there is a legitimate complaint about Germany's lack of domestic demand. Berlin should accept it needs to develop a strategy. But the opposite is happening."

Ambrose Evans-Pritchard argues in the Telegraph, "The deeper truth that few care to face is that under the current EMU structure Berlin will have to do for Greece and Club Med what it has done for East Germany, pay vast subsidies for decades. Events of the last week have made it clear that no such money will ever be forthcoming...I blame the EU elites that charged ahead with this project for the wrong reasons - some cynically, mostly out of Hegelian absolutism - ignoring the economic anthropology of Europe and the rules of basic common sense."


Writing in the FT Martin Taylor, Chairman of Syngenta, argues that the "least damaging solution" to the eurozone crisis "might be a north/south split of the currency...better two effective groups than one dysfunctional currency."

FT: Münchau FT: Taylor Economist: Charlemagne notebook Telegraph: Evans-Pritchard WSJ Guardian: Lapavitsas Independent FT: Letters


EU will now send three presidents to summits

The Sunday Express reported that, despite promises that the Lisbon Treaty would make the EU more streamlined, the EU will be sending up to three different presidents to international summits such as the G20. Commission President Jose Manuel Barroso has succeeded in his demands to join Council President Herman Van Rompuy at such summits, claiming that only he has the expertise to deal with specific policy matters.


Open Europe's Sarah Gaskell was quoted saying, "This surely must be the final nail in the coffin of the Government's promise that the Lisbon Treaty would bring greater clarity to the European Union. Instead of Europe speaking with one voice we have two of the EU's many presidents fighting for the limelight and over who gets to speak on what issue. Other countries at the G20 will be completely puzzled by the EU's failure to decide who should speak for it. It seems to change from one day to the next."

Sunday Express Sunday Express: Leader


Britain to resist next year's £119 million increase in EP budget.

The Telegraph reports that the UK is set to oppose an increase in the European Parliament budget that will raise the cost of each MEP to a level four times that of a Westminster MP. UKIP MEP Marta Andreasen is quoted arguing that "the European institutions are preaching economy for all except themselves [...] How much more gravy does Europe want on the gravy train"?


Meanwhile, the Mirror reports that BNP's Nick Griffin and Andrew Brons have failed to submit quarterly accounts, like other parties, and have put much of their party leadership on the EU payroll.



UKIP leader: Hung parliament needed to avoid "certain disaster" for Britain

Speaking at the UKIP party conference in Milton Keynes, UKIP leader Lord Pearson of Rannoch noted that David Cameron's refusal to offer a referendum on Europe means a Conservative victory would spell "certain disaster" for Britain. He argued that "whatever the doubts about a hung parliament, a Conservative victory would be an absolutely certain disaster - just as bad as Labour." He added: "David Cameron has ruled out any sort of referendum on our relationship with Brussels for five years. Five more years of ever-deeper integration", he said, adding that "the easiest way, perhaps the only way [for the UK], to solve the problems of the economy and immigration is to leave the EU".  



The WSJ reports that the EU is coming under pressure to develop a system to deal with the failure of large cross-border banks, with IMF Director Dominique Strauss-Kahn saying that "politicians need to rise to the challenge". EU Internal Market Commissioner Michel Barnier also said: "My personal conviction is that financial institutions should contribute to a European resolution fund".



The ruling conservative UMP party suffered defeat at the hands of the Left in the second round of the French regional elections yesterday, receiving 37.5% of votes. A coalition of Socialist, Communist and green movements received 53% of the vote. Several sources report that President Sarkozy is considering reshuffling his government during the next few days.

WSJ EUobserver BBC FT Times Guardian Guardian: Leader IHT Le Figaro Le Monde Independent Telegraph


In a letter to Saturday's Guardian Lib Dem MEP Diana Wallis argues that, contrary to Simon Hoggart's suggestion, the European Parliament is not an "abusive imps' tea party", but "a breeding ground for new talent, with senior MPs from the three biggest UK parties having started their political careers in the European parliament."

Guardian: Letters


Romanian daily Jurnalul quoted Open Europe Director Mats Persson discussing the EU's wasteful spending as part of its culture programme.



According to the Telegraph, more than 5,000 undergraduate places at twenty of the most sought-after UK institutions went to candidates from other EU countries last year - an increase of 32 per cent in three years.



EurActiv reports that EU Internal Market Commissioner Michel Barnier has said that he is not in favour of the principle of self-regulation, adding: "Barroso has given me a mandate to clean up the internal market and close its missing links".



Handelsblatt reports that German MEPs have accused British aid to General Motors of being a distortion of competition.  Christian Democrat MEP Herbert Reul is quoted saying: "apparently Germany is being treated more intensely than other countries."



Dutch Foreign Minister Maxime Verhagen has said that the Netherlands will not block the start of Iceland's EU accession talks over the unresolved Icesave bill.


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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