Wednesday, June 23, 2010

Open Europe press summary: 23 June 2010



Diplomats agree EU treaty change to temporarily increase number of MEPs;

UK Parliament will have to ratify

National diplomats have this morning finalised changes to the Lisbon Treaty in order to allow 18 extra MEPs to take their seats. EU leaders agreed at last week's EU summit to launch an Intergovernmental Conference to handle the required treaty change. This short IGC was dealt with at "Coreper II", the meeting of the permanent representatives of the member states in Brussels.


Now it is up to national parliaments to ratify the treaty change. Despite already taking their salaries, the 18 additional MEPs cannot take their seats before the ratification is finalised in all 27 member states.

EP press release Conservative Home Open Europe blog


Deadlock in talks over powers of EU's new financial supervisors;

France and Germany unite against UK

Reuters reports that EU diplomats and MEPs are deadlocked on talks over the creation of the EU's three new financial supervisors for banking, insurance and securities. At the heart of the disagreement, which could postpone negotiations until after the summer and drag out the planned starting date for the watchdogs beyond the beginning of 2011, is whether the supervisors will get powers to overrule member states. MEPs want them to be able to instruct local regulators on what to do in an emergency. Germany and France have sided with one another against Britain to back giving the new authorities these powers, said one source involved in the talks.



Eurozone fears worsen over Spanish banks

The FT reports that investor worries over the eurozone resurfaced yesterday after a warning from ECB Board Member Christian Noyer that some banks faced funding difficulties. The front page of Handelsblatt carries the headline "battle of the Euro", noting that both Spain and Greece now have to pay higher interest rates on their government debt than they did before the eurozone bailout packages were launched.


Handelsblatt features interviews with both Greek Finance Minister George Papaconstantinou and Spanish Foreign Minister Elena Salgado. Salgado is quoted saying that Spain does "not need" a bailout and that the country will not take up any of the €440bn eurozone bailout fund. She also noted German political opposition to agreeing the various bailout packages for Greece and the rest of the eurozone: "We are committed to solidarity, and the people have accepted that. In [the Spanish] parliament there was a unanimous decision in favor of helping Greece. There is certainly a different feeling in Germany."


Sueddeutsche quotes German Bundesbank official Thilo Sarrazi, saying, "A monetary union should last for at least 100 years, but the European one has already built up so much tensions in 10 years time that one has to ask: what will happen further?"


Writing in the Independent, Sean O'Grady argues, "There is no alternative for Germany but to expand her economy and suck in more imports from the south. We need to see more Alfa Romeos on the autobahns: Germany's trade surplus with Italy, or Spain or Greece, is, after all, only the mirror image of those nations' deficits."

Handelsblatt FT WSJ FT: Pisani-Ferry Open Europe blog Mail: Alexander Independent: O'Grady Handelsblatt 2 Handelsblatt 3


Osborne axes Treasury's "Euro Preparations Unit"

The Telegraph notes that in yesterday's Budget, Chancellor George Osborne restated the Government's position that it will not prepare to join the euro in this parliament. He also axed the Treasury's "Euro Preparations Unit", which ensured that every upgrade or replacement of IT systems at the Treasury was 'Euro compatible'. Open Europe Director Mats Persson was quoted saying, "There is no appetite among the British public to join the Euro so it is good to hear the Chancellor confirming this for sure. The eurozone crisis has raised economic and political questions about whether Britain should join the Euro at any time."



UK, France and Germany announce the introduction of a bank tax

Le Point reports that the UK, France and Germany have released a joint declaration announcing the introduction of a bank levy in their countries. The new tax will be based on banks' balance sheets. The document follows a statement by the EU Commissioner for Financial Services Michel Barnier, who said yesterday that "the bank tax must be created whatever happens and whatever [the other G20 members] do". Britain and France both feel that the money raised through this new levy should be considered as part of general tax revenue. On the contrary Germany - backed by the European Commission - would like the money to be channelled into a bank resolution fund.

Les Echos  Le Point Repubblica WSJ IHT


Sarkozy seeks to maintain influence over ECB

Le Figaro and Handelsblatt report that French President Nicolas Sarkozy wants to maintain French influence over the European Central Bank by appointing his economic advisor Xavier Musca to the ECB's governing council when current President Jean-Claude Trichet steps down in October 2011. Le Figaro suggests that Sarkozy would lend support to Axel Weber, the German candidate to succeed Trichet, on this condition.


Meanwhile, Handelsblatt reports that German Economy Minister, Rainer Brüderle, has come out in support of Bundesbank President Axel Weber's criticism of the ECB's decision to purchase eurozone government bonds. Brüderle thinks that "this position will in the end help Weber to become Jean-Claude Trichet's successor" as ECB President.

Handelsblatt Handelsblatt 2 Le Figaro


EP's finance committee backs binding rules on remuneration packages in finance sector

Het Laatste Nieuws reports that the ECON Committee of the European Parliament has backed advice calling for binding rules on the remuneration policy of companies and financial institutions. Belgian MEP Saïd El Khadraoui, who drafted the non-binding report, is quoted saying that "the European Commission has issued recommendations on this, but the majority of the member states haven't taken any initiative. That should not be possible any longer."



FT: "There can be few European politicians who have maximised their influence as expertly" as Van Rompuy

A profile of EU Council President Herman Van Rompuy in the FT reads, "When he got the job last November, Mr Van Rompuy was dismissed by some, particularly in the British press, as an uninspired compromise choice, a grey mouse... EU politicians who have seen him at close quarters say, however, that they are impressed... There can be few European politicians who have maximised their influence as expertly as he has done this year."



Commission considers increasing supervision of oil drilling

FT Deutschland and Handelsblatt report that due to the recent catastrophe in the Gulf of Mexico, the Commission is considering tightening the safety rules for drilling in the North Sea. "The industry has to do everything to prevent a similar catastrophe that would have such an oil slick as a consequence," said EU Energy Commissioner, Günther Oettinger. Concrete legislative proposals will be put forward by Oettinger in the autumn, FT Deutschland reports.



EU gets caught up in Russia-Belarus "gas war"

EUobserver reports that Belarus leader Alexander Lukashenko has stopped Russian gas exports to the EU after Russia refused Minsk's offer to pay a gas bill in the form of Belarusian-made machinery. The Commission said the cut would hit 6.25 percent of total EU consumption, affecting Germany, Lithuania and Poland.

Telegraph EUobserver


EUobserver notes that yesterday the human rights group Amnesty International sent a letter to the European Commission lamenting that several EU member States - especially Italy - are systematically turning a blind eye on the worrying human rights situation in Libya in order to ensure Libyan leader Colonel Gaddafi's cooperation in controlling the flow of illegal immigrants from Northern Africa.



The IHT reports that David Cameron has suggested new taxes that would require heavy emitters to pay a minimum price for permits to pollute under the EU Emissions Trading System.



A Merrill Lynch survey shows that the net wealth of Asian millionaires has eclipsed that of Europeans for the first time.



An editorial in the WSJ suggests that "If the UK insists on holding Iceland's EU accession hostage to the Icesave issue, it seems likely that Icelanders would rather walk away from EU accession than agree to foot a bill equivalent to more than 40% of Iceland's GDP."

WSJ FT: Brussels blog


Lithuanian Prime Minister Andrius Kubilius said yesterday that his government intends to make further big budget-deficit cuts to join the euro in 2014.



The EU and India are working to complete a bilateral free-trade agreement in the autumn that is intended to triple their €53bn trade flow within five years, the Indian Minister of Commerce and Industry said.



The WSJ notes that EU transport ministers are tomorrow expected to back plans to unify the 27 member states' national air-traffic systems under a project dubbed the "Single European Sky".



Swedish demands for lifting the EU ban on snuff will not get the support of EU Commissioner for Health and Consumer Policy John Dalli. Mr Dalli is currently working on a new, more aggressive tobacco directive to be completed by November, and said that to lift the ban on snuff would "send out the wrong signals".

Dagens Nyheter




Europe set for clash with US at G20 over austerity in the short-term

Conflicting views over fiscal stimulus and austerity could lead to a clash between the EU and the US at the upcoming G20 summit scheduled for this weekend, according to the WSJ. The US has expressed concerns that the recent wave of European fiscal austerity could lead the global economy into a double dip recession. "We must demonstrate a commitment to reduce deficits in the long term, but not at the expense of short-term growth," said the US Treasury Secretary, Timothy Geithner. President Obama warned countries to be prepared for future stimulus. Mr Obama wrote to other leaders last week, "we should be prepared to respond as quickly and forcefully as needed to avert a slowdown in economic activity."

Economista FT WSJ WSJ 2


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