Wednesday, October 06, 2010

Open Europe press summary: 6 October 2010


Hague outlines plans for sovereignty bill and 'referendum lock';
"What a sovereign parliament can do, a sovereign parliament can also undo"
Foreign Secretary William Hague has today outlined plans for the Government's new European Union Bill, which will include a sovereignty clause and a 'referendum lock'. On the 'referendum lock', Hague said that any future Government's attempt to transfer powers via a new treaty, or under the Lisbon Treaty's so-called ratchet clauses, will be subject to a referendum.

Hague told the Conservative Party Conference that the sovereignty clause within the Bill will make it explicitly clear that EU directives take effect in the UK only by the will of Parliament, which can be withdrawn at any time. "A sovereignty clause on EU law will place on the statute book this eternal truth: what a sovereign parliament can do, a sovereign parliament can also undo," he said. "It will not alter the existing order in relation to EU law. But it will put the matter beyond speculation," he added.

He said that the EU's "democratic legitimacy was undermined" by Labour's failure to hold a referendum on the Lisbon Treaty.

Stiglitz: Ultra-loose monetary policies led by the Federal Reserve and the ECB are throwing the world into "chaos"
Nobel Prize-winning economist Joseph Stiglitz said yesterday that ultra-loose monetary policies led by the Federal Reserve and the European Central Bank are throwing the world into "chaos" rather than helping the global economic recovery, reports Reuters. These concerns were echoed by the head of the IMF Dominique Strauss-Kahn who said governments are risking a currency war if they try to use exchange rates as a "policy weapon" to solve domestic problems.

Following the Asia-Europe summit in Brussels, European policy makers have increased pressure on China to allow its currency to strengthen, claiming the weak yuan threatens Europe's economic recovery. Meanwhile, EU Trade Commissioner Karel de Gucht warned that the EU could limit the ability of Chinese companies to bid for public works projects unless European companies get the same access to China's market, reports the IHT.

MEPs freeze cash for 118 new posts in the EEAS;
Grässle: The EEAS risks having "many generals but few boots on the ground"
European Voice reports that the battle between MEPs and member states over the top appointments in the new European External Action Service (EEAS) is escalating. Yesterday, the Parliament froze the €18.6m budget for creating 118 new positions in the institution. This money will be released as soon as EU Foreign Minister Catherine Ashton "explicitly commits herself to consulting Parliament on staffing priorities within the service", according to an amendment adopted yesterday by MEPs in the Budget Committee. German MEP Ingeborg Grässle is quoted saying that the EEAS is turning into a "Mexican army", with "many generals but few boots on the ground". She points out that the EEAS structure as it stands would see each Director-General responsible for no more than 74 people, while in the German civil service, an official at the same level is in charge of more than 1,000 staff.

Moody's could further downgrade Ireland's credit rating;
ECB split over haircuts on Irish and Greek bonds
Irish bond yields rose yesterday after credit rating agency Moody's placed Ireland on review for a further possible downgrade, reports the Irish Independent. Taoiseach Brian Cowen last night advised that new austerity measures would not include further cuts to public sector wages.

A separate article in the Irish Independent by columnist David McWilliams laments Ireland's economic problems writing, "take the example of euro membership. Denmark and Sweden [...] decided to keep their own currencies because they were perfectly happy with them and the euro's case wasn't compelling enough. Meanwhile, what did our elite do? They went along for the ride - one which the evidence would suggest was an extremely ill-advised ride. Ireland had much greater cause for concern about joining the euro, but we hardly made a noise. Why?"

Reuters reports that the European Central Bank is split over whether to start imposing bigger haircuts on Irish and Greek bonds that are posted as collateral in ECB refinancing operations.

EU Energy Commissioner wants powers to decide in planning disputes over cross-border infrastructure
Handelsblatt reports that a paper being prepared by European Energy Commissioner Günther Oettinger suggests giving the EU new powers to mediate in disputes over cross-border energy infrastructure projects in order to "simplify" the planning process. The article notes that Oettinger's proposals would see the Commission initially acting as a facilitator in disputes but ultimately with the power to "make a decision" in the matter. The newspaper's EU correspondent Ruth Berschens argues that "imposing construction projects by European decree from Brussels against the will of the citizens will only cause popular anger across Europe."

On his Telegraph blog, Daniel Hannan MEP questions the legality of the "reverse majority rule" which could be used in the future to impose sanctions against countries in breach of EU deficit and debt criteria. "Reverse majority" means that a sanction proposed by the European Commission is considered adopted, unless it is blocked by the Council. However, Hannan notes that this voting arrangement is not mentioned anywhere in the Lisbon Treaty.

Reuters reports that German Chancellor Angela Merkel has thrown her weight behind French moves for tighter controls on commodity trading. "We have very volatile commodity prices and so I would fully support that we should tackle this subject," Merkel told reporters in Brussels.

The Irish Medical Council has written to the Irish Department of Health asking it to lobby for a change to the EU's freedom of movement rules, after 1,105 EU doctors have been registered in Ireland without passing language tests.

Bloomberg reports that the Committee of European Banking Supervisors will host a meeting with regulators from the 27 EU nations in London today to discuss the creation of the EU's new banking supervisor, the European Banking Authority.

EUobserver reports that the EU will invest €50m in co-sponsored projects in Libya over the next three years to help combat illegal immigration. Critics argue that Libya should not receive any such funding as it does not comply with the Convention Relating to the Status of Refugees.

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.