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Government restarts work on bringing Lisbon Treaty into force
The Sun reports that Foreign Secretary David Miliband has told officials to hold talks on how to bring the Lisbon Treaty into force. Shadow Foreign Secretary William Hague is quoted saying "The Irish people have already rejected this EU Treaty and the British have been denied a say."
In a letter to William Hague, Europe Minister Caroline Flint said: "we now believe it is sensible to restart our work preparing for the Lisbon Treaty coming into force, while also continuing to prepare for the possibility that it may not. This will ensure that we are fully prepared to engage in any implementation discussions with EU Partners, should these occur, and to defend the UK's interests. However, no formal decisions will be taken unless and until all Member States have ratified the Treaty and it enters into force."
In a parliamentary written answer, she said, "The Government will in no way pre-empt the decisions of those countries that have yet to ratify the Lisbon Treaty. However, in light of the decisions at the December European Council, we will now work on all possible scenarios. This will include preparing for the possibility that the Lisbon Treaty will come into force."
In a press release, William Hague responded saying: "It is undemocratic and arrogant for Labour to start work on the renamed EU Constitution. The Irish people have already rejected this EU Treaty and the British people have been denied any say on it. This unelected Prime Minister, Gordon Brown, is putting pressure on Irish voters ahead of their second referendum. He has no mandate from the British people to do so."
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British steelwork association launches campaign to retain UK opt-opt from EU 48-hour working week;
Government welcomes "all support from businesses and workers"
Trade journals Construction News and Contract Journal report on the launch of a campaign by the British Constructional Steelwork Association (BCSA) to protect the right of British workers against the EU's maximum 48-hour week.
The BCSA is calling on all construction workers to sign a petition demanding the UK Government fight in Europe for the opt-out to be retained. It warns that construction firms face project delays and cost increases unless they lobby the Government to retain Britain's opt-out. Members of the European Parliament voted in December to end the opt-out, and the decision on whether or not the opt-out will be kept will be made before June by representatives of the EU institutions meeting in a so-called 'conciliation committee'.
Simon Boyd, Contracts Director at Reid Steel, who is leading the campaign, said: "If this is introduced, it will have a devastating effect on the industry. It will mean that projects take longer to complete and employees will lose out financially. Imagine the amount of stress put on managers and employees having to do more in less time. This could see accidents increased." He said: "The impact could be severe, and end in many companies going out of business. The industry needs to be flexible through peaks and troughs. If our ability to expand and contract the workforce [through overtime at busy periods] is lost, that will kill our competitive edge."
Construction News reports that the Government has welcomed the campaign. A Department for Business Enterprise and Regulatory Reform spokesman said: "Losing the opt-out would cost the UK billions in costs to industry and lost earnings. We are determined to defend it and welcome all support from businesses and workers." The CBI is also calling for the opt-out to be retained. Deputy Director-General John Cridland said: "A ban on working more than 48 hours a week would affect people across the economy."
Contract Journal Construction News
Trichet and Barroso forced to defend the Euro
The Telegraph reports that top EU officials "have been forced into repeated assurances that the eurozone is in no danger of falling apart", following growing stress in Greek, Spanish, Italian and Irish bond markets. The paper notes that growing yield spreads in government bonds imply a large increase in funding costs for the budget deficits of heavily indebted states such as Italy and Greece.
Jean-Claude Trichet, the European Central Bank's President, told the World Economic Forum in Davos that, "There is no risk that the euro will break apart." The article notes that yesterday was the second day Mr Trichet has had to parry questions about the viability of monetary union. Commission President Jose Manuel Barroso said, "The euro has acted as a very important shield. Just compare Ireland with Iceland. I don't agree at all that the euro is at risk."
EU officials are furious over comments this week by Dominique Strauss-Kahn, head of the International Monetary Fund, who said the Euro could prove unworkable unless member states give up some control over fiscal policy. Investor George Soros said it was far from clear whether EMU's weaker states would be able to uphold their bank guarantees, given the "structural weaknesses" of a system where each country is in charge of fiscal policy and EU bail-outs are prohibited.
Italy's Finance Minister, Giulio Tremonti, sitting on the same Davos panel, called for the issue of a "union bond". The paper notes that this would amount to a huge leap forward for an EU debt union. Tremonti went on to say that the Italian economy had been unfairly singled out, reportedly remarking that, "Our banking system is quite solid. They don't speak English."
The Independent notes that Barroso once again hinted that the UK should join the eurozone, saying, "Even the biggest states can't face these challenges alone".
A leader in the Telegraph argues that "the euro will struggle to survive the recession". It cites yesterday's strike in Paris as evidence of "a profound sense of frustration because the French, like the other 15 members of the eurozone, are all too aware that their national governments have only limited room for manoeuvre."
Meanwhile, the Economist looks at Danish Prime Minister Fogh Rasmussen's desire for his country to join the Euro. The article notes that "Rasmussen was a fan of the single currency long before he became prime minister; he has never hidden his ambition to get Denmark to join. In his first seven years, he never found an opportune moment to call a referendum to reverse the negative vote that Danes cast in 2000. But global economic chaos could now afford him one."
Telegraph Bloomberg Standard Independent Telegraph: Leader Economist Irish Times: Lane
Concern over potential trade war between the US and EU
The Telegraph reports that a bill passed late on Wednesday night in the US House of Representatives included a ban on most purchases of foreign steel and iron used in infrastructure projects. The inclusion of protectionist measures has raised alarm in Europe. EUobserver reports that EU Trade Commissioner Catherine Ashton said, "We are looking at the situation. The one thing we can be absolutely certain about is if a bill is passed which prohibits the sale or purchase of European goods on American territory, that is something we will not stand idly by and ignore."
The Economist notes the potential historical parallel of this development with the bill sponsored by protectionist Republicans in 1929 - the Smooth-Hawley Act - which raised tariffs to the highest levels America had ever seen. The result was "a round of reciprocal tariff hikes elsewhere, and a disastrous collapse in international trade."
Reuters Telegraph EUobserver Economist Irish Independent Telegraaf
Taxpayers' Alliance: CFP adds £200 to family food bills
PA reports that the EU's fisheries policy is adding nearly £200 a year to the average family's food bill, according to a report published by the Taxpayers' Alliance and Global Vision. The report claims that the 25-year-old EU deal, which carves up annual fish quotas between the member states, has cost more than 97,000 UK jobs - 9,000 in fishing and 88,000 onshore in dependent industries. As the report was unveiled, protesters paraded around the European Parliament's London headquarters in Westminster, dumping dead fish and demanding the return of fisheries policy to national control.
Shadow Environment Secretary Nick Herbert said the report highlighted an urgent need to reform EU fisheries policy "and reconnect it with the national and environmental interest." He added, "The Government must show leadership and demand real reform which delivers sustainable fisheries, value for money and a viable future for our fishing industry."
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EDF Chief: Carbon market could become the new sub-prime
The Guardian reports that the Chief Executive of the UK branch of EDF, Vincent de Rivaz, has warned that speculators risk turning carbon into a new category of sub-prime investment. He said, "We like certainty about a carbon price... [but] the carbon price has to become simple and not become a new type of sub-prime tool which will be diverted from what is its initial purpose: to encourage real investment in real low-carbon technology."
The article also notes that Tony Howard, Chief Executive of BP, said that a predictable global carbon price was important because it would make "vast numbers of alternative energy sources competitive".
The Clean Development Mechanism scheme, which allows developed countries to effectively import emissions reductions, has also come under fire, reports the BBC, with the Head of Stanford University's Energy and Sustainable Development Program arguing that between a third and two-thirds of CDM offsets in the developing world do not represent actual emission cuts.
The BBC quotes a carbon analyst at Deutsche Bank saying that the fall in the carbon price due to the recession has exposed the frailties of the EU's Emissions Trading Scheme, saying that "Selling allowances would not be happening if they'd had to pay for them in the first place...Getting them free allows them to be sold on a risk-free basis and that is exacerbating the fall in the price of credits".
UK could face EU fines over air quality
PA reports that the European Commission has warned that the UK faces legal action for failing to keep levels of airborne particles, known as PM10s, below levels set in 2005. The Commission has sent a first warning letter, and the UK has two months to respond before any action can be taken.
Commission asks Britain to change 'discriminatory' inheritance tax law
AFP reports that the European Commission said in a statement that, "The European Commission has formally requested the UK to amend its legislation which provides for discriminatory inheritance tax relief."
Dutch Europe Minister adds to pressure on Ireland to ratify Lisbon Treaty
Le Monde reports that Dutch Europe Minister Frans Timmermans has launched an appeal to Ireland to approve the Lisbon Treaty, saying that Ireland "is realising, in times of crisis, the utility of Europe". He also asked Poland and the Czech Republic to "reassure the Irish by making clear they want this Treaty very much". EUobserver reports that a majority of Czechs want their parliament to ratify the Lisbon Treaty, according to a poll, noting that "the number of those against the document has been progressively decreasing out of fear that the country would lose its prestige if it does not approve the [Treaty]."
Meanwhile, Czech political analysts have suggested to EurActiv that President Obama's decision to delay the central European missile shield project could delay ratification of the Lisbon Treaty in the Czech Parliament. There was reportedly a deal between the Czech government and the main opposition party to approve the Lisbon Treaty if the missile shield project received approval, but that deal is now under threat.
Barroso calls for greater ECB supervision of national banks
The Irish Independent reports that Commission President José Manuel Barroso has called for the European Central Bank (ECB) to have greater supervisory powers over national banks. He said, "national supervision systems did not work - that is obvious", adding that he wanted to see a "more coordinated approach at the European level". He said that a provision in the Maastricht Treaty could be used to implement a new system of EU cooperation: "What is true is that today we have a provision in the Maastricht Treaty -- which is provision 105.6 -- which says, if there is unanimity of the governments, some responsibilities in respect of the surveillance area could be given to the ECB."
Meanwhile, the WSJ notes that, while being interviewed about the EU's model of capitalism, Barroso said that "President Obama, is moving toward a European-style model."
Iceland could join the EU by 2011, possibly with Croatia
Senior policy-makers in both Brussels and Reykjavik have announced that Iceland will be put on a fast track to join the European Union in order to rescue the country from financial collapse. The European Commission is preparing itself for a membership bid, depending on the outcome of a snap general election in Iceland expected in May. According to the Guardian, the negotiations could be speeded up to ensure Iceland's accession by 2011. Ollie Rehn, EU Enlargement Commissioner, said, "The EU prefers two countries joining at the same time rather than individually. If Iceland applies shortly and the negotiations are rapid, Croatia and Iceland could join the EU in parallel...[Iceland] is one of the oldest democracies in the world and its strategic and economic positions would be an asset to the EU."
Meanwhile, Le Monde reports that a new minority coalition government composed of the Red Greens and the Socialists is likely to be formed today.
Guardian Times Le Monde Mail Telegraph Reuters
Energy Savings Trust: New EU plans for energy efficiency ratings a waste of time and money
The Energy Savings Trust has warned that the EU plan to change the system of energy efficiency ratings on goods such as fridges and light bulbs will confuse consumers. PA quotes its Chairman, Edward Hyams, saying, "I would have thought that the EU had enough on their plates at the moment without wasting time, money and effort changing something that nine out of 10 people across Europe already understand and recognise."
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New urgency on EU-ACP trade deal
The BBC reports that with the world in economic turmoil, there is now a renewed push to complete a trade deal between the European Union and the African, Caribbean and Pacific nations which had stalled a year ago. Up to now, many of the EU's former colonies have objected to signing the so-called Economic Partnership Agreements, because these required them to open their markets to EU products in return for preserving their ability to freely send goods to the EU. Now, however, there is a new urgency as poorer countries are worried about the impact of the slowdown on their domestic economies.
Martin Kettle: UK must engage with the EU if it wants to keep Obama's attention
Writing in the Guardian Martin Kettle argues that the EU is "at the heart of any serious strategic answer to the question of how Britain can play an effective part in the multipolar world that [US President Barack] Obama is obliged to try to shape."
He notes that "The debate about Europe in this country always takes place on the basis that the EU is too strong. Yet the reality is in many ways the opposite...Whatever Europe's strength vis-à-vis the sovereign states that make up the union, it is certainly too weak to be really effective in representing its own best interests internationally."
He argues that both major UK parties are unwilling to open up or change the terms of the European debate: "The [Conservatives'] position on Europe is tactically smart but strategically stupid, said one minister at this week's seminar. But that is true of Labour's position too. There is no way that Labour is going to fight the European elections this year on the case for Europe, or make [Conservative leader David] Cameron's collision course with the EU a campaign issue in the general election."
Debate on merits of French EU Presidency
French daily La Croix organised a debate which took place last night between Daniel Cohn-Bendit, Co-President of the Greens in the European Parliament and Sylvie Goulard, President of European Movement in France. Both speakers agreed that France's EU Presidency had been both loud and audible but that, on the financial crisis, "France had not spoken the truth" by camouflaging the heterogeneity of national responses with a discourse about European unity. They also agreed that France could have proposed radical reforms, such as allowing the ECB to issue bonds from a European Treasury.
The Head of Latvia's Central Bank has said the Latvian economy is "facing death and we have 3 or 4 minutes to resuscitate it".
UK
In the Times, Camilla Cavendish argues that "it is private innovation and entrepreneurialism that will rebuild the economy" and warns against initiatives to "tax enterprise".
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