Europe
EU institutions strike a deal on new financial supervisors;
Barnier: The Commission will continue to build EU financial supervision "brick by brick"
It is widely reported that yesterday EU member states, the European Commission and MEPs reached an "agreement in principle" on the creation of three new EU financial supervisors and a Systemic Risk Board. Belgian Finance Minister Didier Reynders, who negotiated on behalf of member states, described the agreement as "maybe the most important decision" the EU has taken in response to the financial crisis.
EU Commissioner for Internal Market Michel Barnier is quoted by European Voice saying that the deal sealed yesterday "is just a first step [...] we will dispose of a framework in which the Commission will continue brick by brick, piece by piece, to propose elements".
The European Parliament declared victory over member states in its efforts to give the EU supervisors substantial powers over national regulators. German MEP Sven Giegold - the EP's rapporteur on the European Securities and Markets Authority - is quoted by EurActiv saying: "At the insistence of the Parliament, these authorities will now have real teeth".
Under the proposal, the EU supervisors will be given binding powers over national authorities in several key areas, including the mandate to ban "toxic" products and impose rules directly applicable to financial firms in "emergency" situations. As a rule, decisions within the supervisors will be taken by simple majority voting meaning that the UK will have the exact same voting weight as all other member states, despite being home to the bulk of the EU's financial sector.
Crucially, the European Parliament also approved the ECB President as chair the new ESRB - something which the UK was strongly opposed to, although this provision will be re-examined in five years. However, the UK Government still welcomed the deal. A spokesperson is quoted by the BBC saying it was "very good outcome for the UK, fully reflecting the priorities" of the Chancellor of the Exchequer George Osborne. Open Europe's Director Mats Persson is quoted in the Telegraph warning that the move is bound to raise fears in the City that it may impose tough new regulations from Brussels.
The agreement now has to be endorsed by the EU's Finance Ministers at a meeting to be held next Tuesday 7 September. The European Parliament is expected to approve the proposal at meetings held between 20-23 September.
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Deutsche Bank Chief Economist: "Spain, Portugal or Ireland will probably have to call for the eurozone aid package this year"
The European Central Bank (ECB) yesterday extended emergency support for eurozone banks amid continued worries over the strength of the economic recovery. The ECB will continue to maintain its main low lending rate at 1 percent, "for as long as necessary", and possibly until 2012, reports the IHT. However, the ECB also raised its growth forecast for 2010.
In an interview with Handelsblatt, Thomas Mayer Chief Economist at Deutsche Bank argues that "the Euro crisis isn't over yet...markets don't believe that. Risk premiums on governments bonds from Spain, Portugal and Ireland have risen again in August. The markets are again relying on support measures from the ECB". He continues, "We must prepare ourselves for a hot autumn. In Spain, PM Zapatero must be able to pass a new savings package in Parliament. The danger is big that he will fail. Portugal has hardly made any progress with its budget consolidation. Ireland has suffered a setback after some initial successes. The risk is big that one of the three countries will have to call for the eurozone aid package - probably this year".
Mayer continues to note that he is "not sure" whether loans from a eurozone aid package would be enough to prevent a member state from financial collapse, saying: "the Eurozone is not prepared at all for a state bankrupsy", adding that he favours German Finance Minister Wolfgang Schäuble's proposal for an ordered insolvency mechanism for Eurozone member states.
Handelsblatt Irish Independent Times Irish Times IHT El Pais European Voice EUobserver European Voice Corriere Della Sera Il Sole 24 Ore Euractiv.fr WSJ WSJ 2 Bloomberg Wirtschaftspresse Zero Hedge
Open Europe's Vincenzo Scarpetta is quoted in the Express reacting to Libyan leader Muammar Gaddafi's requests for a yearly €5 billion from the EU to help curb the flow of illegal immigrants. "There is a strong case to be made for cooperating with countries outside Europe to address illegal immigration. But handing over billions of taxpayers' cash to a dictator in exchange for a vague promise to stem migration flows is probably not the best idea - particularly as Colonel Gaddafi would find it difficult to deliver on this promise even if he wanted to", Vincenzo said.
Barroso to give 'state of the union' address
The EU's recent eurobarometer study revealing declining public support for the EU continues to recieve coverage. On her Mail blog, Mary Ellen Synon criticises the "absurd" attempts by the Commission to put a positive spin on the results and quotes Open Europe's Mats Persson saying: "'The commission's Eurobarometer is very expensive - almost 27,000 people were interviewed face-to-face - begging the question whether taxpayers' money really should be used in this way".
Meanwhile, the Parliament reports on the news that EU Commission president José Manuel Barroso will give an annual 'state of the union' address starting on Tuesday. Open Europe's Siân Herbert is quoted saying: "Frustrated by its declining popularity the overarching aim is to centralise public communication and to "personalise" the image of the EU policies based on president Barroso." On his Telegraph blog, Dan Hannan gives several reasons as to why the support for the EU is declining.
The Parliament Mail blog: Synon Telegraph blog: Hannan OE blog
Iain Dale's diary claims that former UKIP MEP Nikki Sinclaire is currently under investigation by the EU's Anti-Fraud Unit OLAF and the West Midlands Economic Crime Unit on allegations of misuse of European Parliamentary allowances including alleged abuse of travel expenses.
John Rosenthal: "it is no accident that EU funding leads to politicised science"
A report by John Rosenthal for the Hoover Institution looks at "The EU Connection in Climate Research". He argues "for scare-mongering climate researchers, private American foundation money is just icing on the cake. EU money is the cake", while adding that "it is no accident that EU funding leads to politicised science. Promoting research that supports EU policies is, after all, one of the stated main strategic objectives of the Research dg's framework programmes".
Hoover Institution report
EurActiv reports that French Industry Minister Christian Estrosi yesterday met with EU Industry Commissioner Antonio Tajani to discuss a new blueprint for a reformed EU Industrial Policy, to be unveiled in October. The article notes that one of the central parts of the strategy, the controversial 'country of origin' labelling, still remains blocked at EU Council level.
EurActiv reports on an internal paper revealing that the European Commission is working on a "Single Market Act" encompassing around 30 new legislative proposals in areas like taxation, counterfeiting and small businesses.
FT Deutschland reports that European Commissioner Michel Barnier has threatened banks that the EU may introduce new regulations to lower bank charges applied to bank accounts. In a letter to the European Banking Association, Barnier wrote: "fees structures are so opaque that consumers don't know what they are paying for".
Die Welt reports that former Bavarian PM Edmund Stoiber's mandate as the head of the EU anti-bureaucracy group has been extended by two years after he earned praise from European Commission President José Manuel Barroso for his "terrific" success in fighting bureaucracy.
Berliner Zeitung reports that German politicians have criticised that too many hurdles are being put into place to prevent the European Citizens' Initiative from being effective. Their concerns include that signatures of 1 million citizens will not be enough, but that they will have to come from at least one third of the member states.
The Parliament Magazine reports that Friends of Earth has urged the Commission not to approve former EU Commissioner Günter Verheugen's initiative to set up a private lobby consultancy, arguing he is 'in clear breach of the Commission's code of conduct'.
Charles Kupchan, the Georgetown Professor who predicted that the EU would become more powerful while the US would be losing power, has argued in the Washington Post that "The European Union is dying -- not a dramatic or sudden death, but one so slow and steady that we may look across the Atlantic one day soon and realize that the project of European integration that we've taken for granted over the past half-century is no more...European politics will become less European and more national, until the E.U. becomes a union in name only."
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