Friday, June 04, 2010

Open Europe press summary: 4 June 2010


Government promises "fresh approach" on UK involvement in EU;
Opposes sanctions for non-eurozone countries that breach deficit rules
In yesterday's first House of Commons debate on European affairs under the new Government, Foreign Secretary William Hague outlined the coalition's policy on Europe and said the new Government would "bring a fresh approach to Britain's involvement in the EU".

He said the Government would maintain its position that "there should be no further transfer of sovereignty or powers from Britain to the EU over the course of the Parliament". On the question of reform to the rules of the eurozone, he said: "Sanctions for breaches of the stability and growth pact may be the right way forward for our partners in the euro area. But they should never apply to those countries which retain their own currencies - and this country will retain its own currency".

Speaking in response Lib Dem MP Simon Hughes said: "we need to revisit some of the decisions like the working time directive where I think we made a mistake, and there have been mistakes in the European Union. And my great enthusiasm for the European Union and for better collaboration across Europe doesn't make me blind to things that have not gone well and where we need to do better. And overly prescriptive regulation such as the working time directive is one of those. I don't take the view that there's only ever a one-way traffic of power from this parliament and this country [to the EU]."

Labour MP Gisela Stuart said: "Europe is facing a political and economic crisis which, although it has been brewing for a considerable time, is, in some ways, being denied both here and abroad...People argue that Greece should leave the euro, but I think that the least bad solution would be for the German bloc to leave the euro. That would, in a sense, allow for competitiveness to develop. Germany's banks would still have to recapitalise, but it would be less costly to do this directly than it would be to do it indirectly by trying to rescue Greece."

Open Europe's Sarah Gaskell appeared on LBC radio this morning, discussing William Hague's comments in the House of Commons yesterday.

German MEP says eurozone bailout is "highly undemocratic";
Eurozone Chairman Juncker evasive on issue of common bond
EUobserver reports that the leader of German Liberal MEPs Wolf Klinz yesterday questioned the way the eurozone bailout plan was drawn up, describing the whole process as "highly undemocratic". Mr. Klinz was particularly critical of the mechanism allowing the Commission to raise up to €60 billion on capital markets using the EU budget as collateral. "This is something that we [the MEPs] are going to follow up", he said, adding that, "it's the first step towards Eurobonds. Personally I am against Eurobonds to finance member States' debts".
Eurogroup Chairman Jean-Claude Juncker said yesterday that EU finance ministers meeting on Monday will finalise the details of the bailout package. AFP notes that Mr. Juncker did not rule out the possibility of the eurozone re-considering issuing common bonds, although the idea is strongly opposed by Germany. "Can the vehicle we are going to put into place on Monday lead us back to the issuing of Eurobonds? If I said 'yes', then everything would be done to avoid the creation of this instrument. I'm not going to tell you what I think, and I therefore prefer not to say anything at all".

Le Monde reports that the French Senate yesterday endorsed the participation of France in the eurozone rescue mechanism with 309 Yes votes against 24 No votes.

Meanwhile, writing in the WSJ columnist Stephen Fidler argues: "Since the crisis started, most of the blame for the crisis has fallen on profligate governments such as Greece. Much less attention has been directed towards a different cast of characters: those governments that have failed to take charge of their banking systems. Chief among the villains here: Germany, which has been preaching fiscal austerity across the euro zone but has done little to shore up its own weak banks".

An article in the Economist suggests that there is "scope for some sort of showdown" between the UK and EU over the fact that Britain is not contributing to the €440 billion eurozone bailout package, adding: "this abstention will be wearily tolerated on the continent." It also suggests that it would be a mistake for Britain to assume that the eurozone crisis "has been a lasting blow for European federalists. The reality could be nearer the opposite. For ardent integrationists, the strategy has always been to make grand European projects a reality as quickly as possible, and then solve any problems that result with more Europe."

Van Rompuy has joined French side in struggle over EU economic government
Handelsblatt reports on a power struggle currently going on at the top of the eurozone. It notes that European Council President Herman van Rompuy and French President Nicolas Sarkozy are in favour of plans for an 'economic government' forum among eurozone members, while German Chancellor Angela Merkel and EU Commission President Jose Manuel Barroso are opposed to this.

The article quotes Van Rompuy saying yesterday: "we need a strong economic government in the European Union and most of all in the Eurozone. I'm working on that." The article notes that he has now given up his role as mediator between the two opposing views, and has now put himself on the French side.

UK gets final warning from Commission over air quality
The European Commission has issued the UK with a second and final warning over air quality levels, particularly in London, calling for the Government to come up with a solution. If it fails to do so, the case will be referred to the ECJ within a year. The UK could then be fined £300 million, which the Local Government Association said will add £15 to the average annual council tax bill, reports the Telegraph.

Commission plays the enforcer on EU rules with member states
The FT reports that the European Commission said yesterday it had formally asked France to comply with an ECJ ruling, which said that the country had failed to implement the third anti-money laundering directive. France now has two months to comply and, if it still fails to do so, the Commission warned that it could refer the case back to the court and ask it to impose financial penalties.

European Voice also reports that the Commission is taking Germany, Austria and Portugal to the ECJ over breaches of internal market rules. The Commission has also initiated infringement proceedings against Sweden, Romania, Poland, Spain, Greece and Cyprus over failing to properly implement legislation to allow cross-border direct-debit payments in Europe.

The German government has nominated the Governor of Lower Saxony and deputy leader of the CDU, Christian Wulff, to be Germany's next President. The opposition Social Democrats and Green Party said they would nominate a candidate today. Le Monde suggests that former Foreign Minister Joschka Fischer may be the centre-left candidate.

EUobserver reports that a recent poll conducted by the Novus Opinion Institute revealed that 61 percent of Swedes oppose membership of the eurozone, with only 25 percent in favour and 14 percent having no opinion. A similar questionnaire carried out in May 2009 showed a much larger 49 percent of respondents to be in favour of adopting the euro.

The Mail reports on EU Budget Commissioner Janusz Lewandowski's comments, that national contributions to the EU budget need to be simplified, signalling that the British rebate will be 'questioned' during upcoming budget negotiations.

G20 finance ministers unlikely to make breakthrough on banking tax
G20 finance ministers meeting in Korea this weekend are likely to discuss plans for a global bank tax, although US Treasury Secretary Tim Geithner said: "I don't think we're on the verge of a global consensus on bank levy yet. There is not universal support for that across the G20, at least at this stage. And I don't think that's going to change in Korea."

Meanwhile the frontpage of Handelsblatt carries the headline "Savings Chancellor versus Debt President", and notes that, in the run up to the G20 summit in Canada later this year, there is an "ice age between Berlin and Washington: in financial policy they don't agree. Obama wants new debt. Merkel wants spending cuts".

Solvency II Directive is "too demanding", French insurance companies say
Le Monde reports that several major French insurance companies have described the terms of application of the EU's Solvency II Directive as "too demanding", especially because it calls for capital add-on requirements. They are warning that the requirements may increase insurance costs. Henri de Castries, CEO of French insurance company Axa, is quoted arguing: "It's the same as with medicines: it's a matter of dosage. A bit is good, too much is dangerous".

Opinion polls are predicting that the Dutch Liberal VVD party is projected to come first in next Wednesday's parliamentary elections, although no party is on course to win an overall majority.

Sueddeutsche reports that the Schengen Information System SIS II will be introduced in 2013 at the earliest, with the system providing unreliable so far during tests. €25m has already been spent on the database, but the costs are expected to "explode" to over €140m, according to Basler Zeitung. German Interior Minister de Maizière is quoted saying: "we must have serious doubt if it ever will lead to anything".

Writing in the WSJ Eric Posner, a Professor at the University of Chicago Law School, argues: "European political elites created ambitious political structures that outstripped the sense of European solidarity among their national populations in the hope of pulling those populations along toward a European identity. Each successive treaty created impressive new political structures but not the sense of pan-European solidarity that leaders sought...if anything, political integration is causing a backlash".

The ECJ has ruled that the Netherlands is allowed to block Dutch residents' access to online gambling sites in the UK, saying that such measures are allowed because they meet "the objectives of consumer protection and the prevention of both fraud and incitement to squander money on gambling, as well as the need to preserve public order."

Euractiv looks at the results from a study by Slovakian University Comenius, which concludes that "despite their particular interests in the subjects such as energy security and neighbourhood politics, the Eastern European states, which entered the EU in 2004 and 2007, have since then not managed to influence Brussels in any significant way."

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