Britannia Radio

EU OBSERVER     6.2.09
Brussels to push ahead with ?5bn cash injection despite objections
HONOR MAHONY

  BRUSSELS - The European Commission has said it will press ahead 
with plans to spend billions of euros of EU taxpayers' money on 
energy and broadband projects despite objections from some member 
states and the EU's legal services.

Last week, the commission announced it would use ?3.5 billion of as-
yet-unspent EU money on the planned Nabucco gas pipeline, other new 
pipeliness, electricity networks and alternative energy projects, as 
well as on internet infrastructure across the bloc. A further ?1 
billion was earmarked for upgrading internet infrastructure 
particularly for less populated areas.

The EU's own legal services have said the excess monies should be 
returned to the member states

The plan, unveiled by commission chief Jose Manuel Barroso, is 
intended to give a boost to Europe's flagging economy while at the 
same time push forward with energy diversification and green projects.

However, it has met with a lukewarm reception from several member 
states who are reluctant to see money that would normally be returned 
to government coffers be spent on common projects.

In addition, Germany does not strong favour the 3,300 km Nabucco 
pipeline running from the Caspian Sea to Austria, preferring instead 
the Nord Stream pipeline, which would connect Germany to Russia via 
the Baltic Sea.

Meanwhile, boosting the position of recalcitrant member states, the 
EU's own legal services have judged that most of the money may not be 
used in this way.

The commission on Friday (6 February) said it was aware of this 
position but wanted to forge ahead anyway.
"We have been aware of this legal position for some time," said 
commission spokesman Johannes Laitenberger.
But he added: "We don't agree with it. In our view, this is not 
primarily a legal question. It is a question of political 
will."    [So none of is need take any notice of EU law![

Mr Laitenberger said the commission would continue to try and find a 
solution to the problem.

EU leaders agreed in December that ?5 billion from the EU's unspent 
budget could be used. The matter is set to be discussed by finance 
ministers on Tuesday (10 February) in Brussels.
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  ECONOMIC and other   'Shorts'   6.2.09
TIMES
=UK company collapses up 124% in three months
Experts predict more firms will go bust as number of people filing 
for bankruptcy rises to highest level since 196
=A pay-freeze amid £70 million pre-tax loss
Flag carrier to begin talks with unions over decision not to offer 
pay rises to 43,000 staff as economy hits growth
=Scottish & Southern cuts energy bills
Nine million customers will see their electricity prices fall 9% as 
well as 4% taken off their gas bills
=Royal Mail plan to shed 16,000 jobs
Industrial unrest expected with one in ten of the company's workforce 
under threat in a move labelled 'random' by unions
=Manufacturing falls at fastest rate for 28 years
Annual slump in output signals worst fall since 1981, as industrial 
sector bears the brunt of tumbling production
=Resolute GSK boss outlines go-it-alone policy
GlaxoSmithKline has ruled out joining the takeover activity expected 
to engulf the global pharmaceuticals industry

TELEGRAPH
=US unemployment expected to rocket
The US economy lost more than half a million jobs in January, 
official figures due out later on Friday are expected to confirm.
=Asian shares rise on optimism for banks
Asian stocks rose, led by banks and technology companies, on optimism 
government measures worldwide will ease the financial crisis and stem 
the deterioration in the global economy

FINANCIAL TIMES
=Toyota sees wider losses as sales slide
Carmaker expects Y450bn operating loss
=Bank hints more rate cuts to follow
Borrowing costs still have further to fall after the Bank of England 
cut rates by another half a percentage point to a 315-year low of 1%, 
economists forecast on Thursday   [They're severely mad then! -cs]

BBC ONLINE
=Advertising slump hits News Corp
Mr Murdoch has warned of possible job losses
News Corp has made a $6.4bn (£4.4bn) quarterly loss, as falling 
advertising revenues forced it to cut $8.4bn from the value of assets.

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POLITICS HOME    6.2 09
COMMENTS
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World at One, Radio 4 at 13:24
Hammond: Sarkozy has put his finger on the problem

Philip Hammond, Shadow Treasury Secretary

Mr Hammond said the consensus of economic forcasters has been that 
Britain is indeed facing a "very deep and prolonged recession".

"It's disconcerning to hear the figures of businesss going bust this 
week and all the jobs being lost.

"The root cause of the problem here is the failure of the banking 
system to supply credit. We proposed as long ago as last November a 
loan guarantee scheme, to allow the banks to start lending normally 
to small medium and large business. So those businesses that are 
sound can weather the storm.

"What is happening now is that businesses that were running smoothly 
are facing difficulties due to harsher payment terrms and wirthdrawal 
of overdraft systems. This is giving perfectly good businesses no 
option other than to shrink back and lose jobs."

13:45 BBC News

Speaking shortly afterwards Mr Hammond said that Nicolas Sarkozy is 
the latest in a line of world leaders to dismiss the government's VAT 
cut, and added that Sarkozy had put his finger on the problem by 
highlighting the importance of confidence.

"Gordon Brown has been claiming for some time that his policy is 
endorsed by world leaders. Nicolas Sarkozy is the latest in a long 
line to say.the VAT cut has not worked. Nicolas Sarkozy has put his 
finger on the problem. He said that confidence is the key, and if you 
put down a temporary tax cut people will be cautious.

"Because so much of our public infrastructure is dependant on PFI, 
and PFI are difficult to finance, we've seen a slowing down in the 
build up of capital projects.

"I don't think the plans President Sarkozy has would be appropriate 
for Britain. It would help us if Gordon Brown focuses on the real 
problems we have here instead of travelling around the world trying 
to grab headlines through hyperactivity.

"There are some issues that need to be addressed on a basis of global 
cooperation. We're facing a deeper and longer recession than most 
other economies. We have to deal with our particular problem as and 
the particular distortions in the British economy."

He added: "The French will have a different set of problems and have 
to deal with them in their own way."