Friday, September 24, 2010

Open Europe press summary: 24 September 2010

Europe

Analysts encourage Ireland to tap eurozone bailout fund;
Economy faces double dip recession
The Times reports that analysts have suggested that Ireland should seek an immediate €80 billion bailout from the EU-IMF eurozone rescue fund to tackle its "unsustainable" government debts. The article quotes James Nixon, Chief European Economist at Société Générale, saying that failing to act soon could condemn Ireland's public finances to a "long, arduous, slow death".

The WSJ notes that Ireland's Central Statistics Office yesterday said GDP dropped 1.2% from the first three months of the year - well below the 0.5% growth rate economists had forecast. The FT reports that the cost of insuring against Irish default reached record highs yesterday, having a knock-on effect on Portuguese bond yields, which also increased sharply yesterday.

European Commission will look into permanent eurozone bailout fund "next year"
European Voice reports that EU Commissioner for Economic and Monetary Affairs Olli Rehn said yesterday that the idea of a permanent rescue fund for eurozone countries will be revisited by the Commission "in the course of next year" and that the Commission would "possibly make a proposal" on that.

The FT reports that Rehn will next Wednesday outline proposed sanctions for eurozone member states that break budget and deficit rules. In addition to fines for countries that break EU budget rules, further penalties could be imposed on member states that failed to keep their annual spending under control and those that failed to improve competitiveness. The fines would be "quasi-automatic", meaning they could only be stopped if the European Council voted to veto them by qualified majority within 10 days. The proposals still have to be agreed by member states.

A comment piece in the FT Deutschland further notes: "With the proposed instruments it will be hard to solve the fundamental problems of the [Stability and Growth] pact. If a larger number of states - as it is currently the case - violate the rules, majorities will be found in the future to stop the penalties".

Meanwhile, Handelsblatt notes that Rehn has, for the moment, rejected Germany's demands for the introduction of an "orderly default procedure" for debt-laden eurozone countries. "We first want to let the existing [eurozone] rescue package work and gather experience from its effects on the market", he argued.

Italian Foreign Minister and Lithuanian President among ex-Commissioners still on the EU payroll
There is widespread coverage of the news that former Commissioners are eligible for at least €96,000 a year each after leaving office under a 'transition allowance', lasting three years. However, most Commissioners serve for at least five years, entitling them to more. Open Europe's Stephen Booth was quoted by the BBC saying, "The EU's current rules on former Commissioners urgently need to be toughened up. Ex-officials are being allowed to take up well paid positions in the private sector or in national governments while still receiving huge EU payoffs, paid for by the taxpayer".

Among the ex-Commissioners still receiving salaries are the Italian Foreign Minister Franco Frattini and the Lithuanian President Dalia Grybauskaite. Stephen added, "How can citizens expect these people to take an objective view on EU policy when they are still receiving payments from the European Commission?" Stephen also appeared on BBC Radio 4's PM programme and Open Europe is quoted by AFP.

The Independent notes that two former Commissioners, Louis Michel and Danuta Hübner, have taken up seats in the European Parliament but also continue to receive money from the Commission. Louis Michel is quoted by FT Deutschland saying the money "is a professional right". Michael Mann, a European Commission spokesman said: "There will be an overhaul next year. We are conscious some things must be done", according to the Independent.

Energy professor: Renewables add £80 a year on average electricity bill of £600
The Independent reports that the world's biggest offshore windfarm - worth £780 million - opened yesterday in Thanet, seven miles off the UK coast, as part of an effort to meet the EU's renewable energy targets for 2020.

The Express notes that, according to Ian Fells - Emeritus Professor of Energy Conversion at Newcastle University - the UK is spending £1billion a year to support renewable energy, which "adds about £80 a year on the average electricity bill of £600". This will reach £30 billion by 2020, "enough to build five nuclear power stations. Yet unlike nuclear power, wind power is intermittent and does nothing to secure Britain's energy supplies", the article argues.

The Belfast Telegraph quotes Open Europe's Director Mats Persson arguing that the EU's three new financial supervisors amount to a clear shift in power from the UK.

The FT reports that senior European telecoms executives reacted coolly to the Commission's proposals on regulating the next generation of broadband internet networks, warning that excessive regulation could make large-scale investments less likely.

In a speech to the European Parliament, Dutch MEP Derk-Jan Eppink accused the leader of Liberal MEPs Guy Verhofstadt of hypocrisy over France's deportations of Roma. He noted that Belgium had previously been condemned by the European Court of Human Rights because in 1999 - when Verhofstadt was the Belgian Prime Minister - 74 Roma people were "collectively expelled" from Belgium. Verhofstadt stated last week that "forcing one ethnic group to return, en masse, to another member state is not in conformity with EU laws, nor in the spirit of the [EU] Treaties".

The Mail reports that Bulgaria has announced plans to issue 500,000 passports to non-EU citizens living in Ukraine and Moldova. From 2013, the UK will lift its current limits on the number of Bulgarian immigrants allowed to work in the UK.
Mail

Under pressure from MEPs, the European Commission is considering the introduction of a ban on goods manufactured in Chinese Laogai (forced labour camps), EUobserver reports.

European Voice reports that EU Foreign Minister Baroness Catherine Ashton has written a letter to Polish MEP Jacek Saryusz-Wolski, rejecting his demand for the introduction of gender and geographical quotas in the next round of appointments to the European External Action Service - the EU's new diplomatic corps.

The Economist's Charlemagne looks at the creeping rivalry for EU-leadership between Commission President José Manuel Barroso and European Council President Herman Van Rompuy, and argues: "This odd double-act will go on through a series of summits with the likes of China, India, Russia and the United States. Will these countries finally take the EU seriously? Or will leaders such as Barack Obama despair of Tweedledum and Tweedledee?" 

Cuban political prisoner and hunger striker Guillermo Fariñas is top of a list of nominees for the European Parliament's 2010 Sakharov Prize for human rights. The prize could negatively impact on Spain's ambition to normalise EU relations with Cuba, reports El Mundo.

In an interview with EurActiv, head of EU farmers' lobby Copa-Cogeca Pekka Pesonen has argued that direct payments should be maintained in the future reform of the EU's Common Agricultural Policy, but that landownership as such should no longer be considered as a reason for being awarded EU farm subsidies.

City AM reports that Digital Agenda Commissioner Neelie Kroes has said that she is set to take steps to cap roaming fees charged by telecom operators, describing these charges as "an outdated concept". 

A leader in the Times argues that "the EU could do more to underpin failing states to its East".

La Repubblica reports that the European Commission has started a formal investigation over the tax breaks granted to the Vatican City by the Italian government, claiming that they amount to a violation of the EU's competition rules.

UK

UK Europe Minister David Lidington has said he may resign over plans to build a high speed railway line through his constituency, Channel 4 reports.

World

The Irish Independent reports that yesterday delegations from all 27 EU member states walked out of the room to protest against Iranian President Mahmoud Ahmadinejad's speech at the United Nations General Assembly. Ahmadinejad was arguing that the US staged the 11/9 attacks in a bid to ensure Israel's survival.



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.