Europe
MEP: Cameron's EU budget promises are "not honest"
The Telegraph reports that Polish MEP Sidonia Jedrzejewska - one of the European Parliament's leading negotiators on next year's EU budget - revealed yesterday that the real extra cost to UK taxpayers of the EU's budget increase in 2011 will be at least £660 million, over 50% higher than the £430 million additional contribution announced by the Government. According to Jedrzejewska, Prime Minister David Cameron and the other national leaders who, during the last European Council summit, signed a letter calling for an increase in next year's EU budget not higher than 2.9%, are privately planning to boost EU funding through the introduction of several "amending budgets" during the course of 2011. "It is not honest. The people who wrote the letter know very well that it will be more in the end. They are just postponing payments", she argued.
European Voice also notes that Jedrzejewska acknowledged that the European Parliament will have to compromise on its initial demands for a 6.2% increase in next year's EU budget, and suggested that a deal could be struck between MEPs and member states on a 4.5% increase.
EU's auditors refuse to sign off spending for 16th year running
The EU's auditing body, the European Court of Auditors (ECA), has refused to sign off EU spending for the 16th year in row. The two biggest areas of the EU budget, agriculture and regional funds, continue to be affected by "material error". Agriculture spending was affected by more errors than last year, but there has been an improvement in regional spending. The ECA found that around 3% of regional funds shouldn't have been paid out compared with 11% last year.
The ECA found that the EU's accounts "give a fair presentation" of spending, meaning that although the spending contained errors, the accounts are a reliable picture of how the money was spent. Mr Vítor Caldeira, President of the European Court of Auditors, said that there had been an overall improvement but added, "Improving the quality of spending should be a high priority. Simplifying legislative frameworks and introducing more cost-effective systems to reduce the risk of error should contribute to this goal."
Meanwhile, Open Europe's Director Mats Persson is quoted by French daily La Tribune commenting on various examples of waste in the EU budget. "Due to its size and complexity, the EU budget is racked by mismanagement and waste, as the responsibility for these funds falls into a black hole between member states and the EU", Mats argued.
Poll: "Fewer than one in five investors expect eurozone sovereign debt issues to be resolved without some form of restructuring or break-up of the euro"
FT columnist Paul Robinson notes that "fewer than one in five investors expect eurozone sovereign debt issues to be resolved without some form of restructuring or break-up of the euro, according to a poll of more than 500 Barclays Capital clients." Another FT article reports that "Irish and Portuguese 10-year bond yields are trading at the levels Greece's yields were at only weeks before its €110billion bail-out" in May.
EU Economic and Monetary Affairs Commissioner Olli Rehn backed yesterday the Irish government's four-year budgetary strategy but said that "Ireland has been a low-tax country" and that it is now time for it to lean towards becoming a "normal tax country" in the European context, reports the Irish Times.
Meanwhile, Greek government bonds fell yesterday in response to the Government's moderate success in Sunday's local elections. An opinion piece in the Guardian by journalist Petros Papaconstantinou and academic Costas Douzinas argues that high levels of voter abstention and spoiled ballot papers reveal that the Greek Government has "no mandate" to rule the country.
Expansión reports that Spain's risk rating and credit default swaps are bordering on highest recorded levels.
FT: Robinson FT FT 2 El Pais El Pais 2 Expansion BBC Reuters Deutschland WSJ WSJ 2 Mail Irish Times Irish Independent Mail: Brummer FT AFP FT Guardian: Douzinas and Papaconstantinou
German Finance Minister unveils plans for an "Insolvency Act" for debt-laden eurozone countries
In an interview with Der Spiegel, German Finance Minister Wolfgang Schäuble has discussed the German government's plans for an "Insolvency Act" envisaging a two-step crisis resolution mechanism for high-debt eurozone countries. Schäuble said: "In the first step, the deadlines for upcoming loans could be extended in a critical phase. If this does not help, in the second step, private creditors will have to accept a deduction in their outstanding accounts. For that, they will be guaranteed that they receive the rest." The plans have been endorsed by German Chancellor Angela Merkel's coalition, Bloomberg reports.
Suddeutsche Zeitung notes that yesterday, during a hearing in the European Parliament, Luxembourg's Prime Minister Jean-Claude Juncker warned that the euro area risks isolation by declaring "ex ante that the private sector has to be involved in every instance of crisis resolution."
Badische-Zeitung Der Standard Der Spiegel Bloomberg Sueddeutsche Zeitung Irish Independent Reuters France AFP
Energy Commissioner: The EU will have to invest about €1 trillion in energy infrastructure over the next 10 years
Handelsblatt reports that EU Energy Commissioner Günther Oettinger will tomorrow unveil a draft proposal to introduce new rules and make sure that EU energy efficiency targets are met by member states. The proposal states that: "Investments of around €1 trillion are needed by 2020 in order to replace out-of-date production capacities, modernise infrastructure and satisfy the demands for CO2-free energy."
Twinings, the British tea manufacturer, is using €12 million in EU grants to relocate part of its operation to Poland within the next year, making nearly 400 UK workers redundant. The European Commission is reviewing the situation to determine whether the company has broken EU rules.
EUobserver reports that Poland's top farm official Marek Sawicki has criticised the EU's Common Agricultural Policy for being "two-speed" and common "only in name". He also called for reduced direct payments for farmers and increased money to help restructure the agricultural sector.
EUobserver reports that yesterday EU interior ministers failed to reach an agreement on German plans to blacklist airports in terrorist-prone countries, but agreed to set up a temporary "ad hoc group" to look at ways to strengthen air cargo security.
European Voice reports that EU interior ministers agreed yesterday to lift visa requirements for Bosnian and Albanian citizens travelling to the EU. The new rules will enter into force in mid-December.
The WSJ reports that EU ministers will meet in Brussels tomorrow to try to reach a final compromise on the language, rules and cost of a single European patent.
AFP reports that, in a speech given yesterday at Chatham House, Turkish President Abdullah Gül criticised the "short-sighted" attitude shown by some European leaders with regard to Turkey's EU accession.
The greatest danger facing the global economy is a return to trade protectionism, Angela Merkel, German Chancellor, has warned ahead of this week's meeting of global leaders in Seoul.
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.
