Europe De Larosiere report calls for a pan-European advisory council on financial risk; Commission calls for restructure of "zombie banks" European Voice reports that Jacques de Larosiere's report on financial regulation, published yesterday, calls for the President of the ECB to chair a proposed European Systemic Risk Council (ESRC), a pan-European advisory council on financial risk. The report stopped short of calling for a single market regulator which would have been "unrealistic". The Irish Times reports that the ESRC would comprise of ECB governors, national supervisors from the financial sectors, and a representative from the EU Commission. In addition, the report calls for a new European System of Financial Supervisors, made up of three committees covering banking, insurance and securities, according to the IHT. The Irish Times reports that these would be existing committees, which would be transformed into new authorities: the European Banking Authority, European Insurance Authority, and European Securities Authority. EUobserver reports that they would gain new powers to issue licenses to credit-rating agencies, which could be revoked following poor performance. According to the IHT, the report's authors have indicated that the City of London would, to some extent, be supervised by a pan-European watchdog. The Guardian reports that the Commission has recommended that banks weighed down by toxic assets should be wound down or restructured. Internal Markets Commissioner Charlie McCreevy said, "If we don't face up to this issue then we risk prolonging this crisis with zombie banks that are incapable of performing a useful role in our economies." The FT reports that the Managing Director of the German agency responsible for issuing German debt, Carl Heinz Daube, has rejected the possibility of a joint European bond, citing "different debt management systems and no common fiscal policy." WSJ IHT Telegraph EUobserver FT FT: Leader Irish Independent FT: Brussels blog BBC: Mardell blog European VoiceEurActiv Telegraph 2 Telegraph: Leader FT 2 FT 3 Bruegel EurActiv 2 Irish Times Chris Davies: MEPs allowances are "like a birthday present that arrives every week" Lib Dem MEP Chris Davies has an article on the BBC website arguing in favour of increased transparency in the European Parliament, following revelations that MEPs could add 1m pounds to their family income over a five-year term from allowances alone. Davies notes that under current rules MEPs are not required "to produce any receipts to justify use of the office budget. A signature to support a claim for the daily Brussels subsistence allowance (266 pounds) doesn't guarantee that any work is done. And the travel allowance? Well, it can be like a birthday present that arrives every week." He goes on to argue that, "The [European] Parliament is far from toothless...individual MEPs can have a great deal more legislative influence than their counterparts at Westminster. Their actions can change the law of the land in 27 countries, not just one, and the lobbyists know this very well indeed." Arguing that rules for both allowances and conflicts of interest need to be changed, he notes "First point of call for anyone seeking to know whether a parliamentarian has a financial interest that may sway a vote will be the Register of Interests." But that, "Procedures in Brussels trail a long way behind those now established at Westminster." According to Sueddeutsche Zeitung, EU fraud often remains unpunished. It reports that according to a working paper by the European Parliament "with falsified records, corruption or incorrectly billed subsidies, criminals obtain 300 million euro every year from the EU budget. Only a small portion of that is being paid back." Inge Grassle MEP is quoted saying that, "In member states there is a lack of interest in prosecuting when cases come from Brussels" German bread bakers angered by EU 'taste police'; "What the EU is doing amounts to stupid interference" The IHT looks at the Commission's proposal for reducing the permitted salt levels in bread to 1.0 grams of salt for every 100 grams of flour - a proposal which has caused angry reactions in Germany where bread on average contain 1.5 grams of salt for every 100 grams, sparking accusations of the EU acting as a 'taste police'. It is noted that the reaction from the German bakers has been so intense that EU Health Commissioner Androulla Vassiliou yesterday postponed making a decision on new regulations. Matthias Wiemers, Chairman of the Central Association of German Bakeries, a lobby for 12,000 of the country's 15,000 bakeries, is quoted saying "What the EU is doing amounts to stupid interference. The EU is trying to change the way we bake our bread, change the way we market it - and of all things, change the taste of our bread. And all this is taking place just months before we go to the polls to elect a new European Parliament. This is exactly the kind of interference and overregulation by Brussels that annoys citizens and even makes the EU unpopular." Roland Ried, Spokesman for Bavaria's 2,500 bakeries, is quoted saying, "So, we are being asked to change our recipes by reducing the level of salt. But that means we will have to bake the bread for longer and use more energy. The EU should be concentrating on the financial crisis, tax reform and foreign policy instead of over-regulating our lives." The article notes that "The anger of the bakers seems to reflect a rising backlash against the EU from a country that has long been among the most supportive of European integration." Research in 2007 indicated that nearly half of loaves on supermarket shelves in Britain are above the Commission's proposed threshold, indicating that the proposed rule could also affect millions of loaves sold each year in the UK, theTelegraph reports. IHT Telegraph Open Europe research EBRD: Economic crisis risks throwing eastern Europe into "reverse" The WSJ reports that the European Bank for Reconstruction and Development has warned that the economic crisis "is threatening to throw nearly two decades of economic reform into reverse" in central and eastern Europe. EBRD President Thomas Mirow said, "The region's problems are deeply interwoven with those of the rest of Europe, and the solution lies in a coordinated response from public authorities and international financial institutions." The paper reports that the Euro has come under pressure over concerns it could be dragged down by eastern Europe's problems. eurozone banks have loans outstanding in central and eastern Europe amounting to $1.3 trillion. EUobserver reports that eastern European member states' fears that they will be left behind by richer EU members in the economic crisis are growing ahead of an informal EU summit on Sunday. Of particular concern is the idea of creating a single bond for the eurozone, which could push up the cost of borrowing for east European governments outside the Euro. "We want to block the potential eurobond project. To do everything to prevent a two-speed Europe. The introduction of eurobonds for the eurozone only would mean precisely this," Polish Deputy Prime Minister Grzegorz Schetyna said yesterday. The Coulisses de Bruxelles blog reports that the Czech EU Presidency has told its EU partners that the summit on Sunday will be in reduced format, with only one seat per country. The blog suggests that the idea is to marginalise Czech President Vaclav Klaus. Meanwhile, the Telegraph reports that Hungary is on the verge of bankruptcy, with its citizens struggling to pay off mortgages and personal loans taken out in foreign currencies. The WSJ reports that Standard & Poor's Ratings services have downgraded Ukraine's sovereign debt deeper into junk status. WSJ EUobserver Telegraph WSJ 2 FT: Analysis Irish Times Guardian: Garton Ash Coulisses de Bruxelles In a debate in the Commons today James Paice, Shadow DEFRA Minister, cited Open Europe's recent research on the cost of EU regulation. In an article for the Australian financial paper The Daily Reckoning, William Rees-Mogg quotes from Open Europe's recent bulletin on the German Constitutional Court's decisions on the compatibility of the Lisbon Treaty with the German constitution. Daily Reckoning Open Europe bulletin An article on the AgoraVox Italia website cites Open Europe's recent publication on EU communication policy. AgoraVox Open Europe: EU communication policy and the campaign for hearts and minds Verheugen: Ireland should not be punished for voting No in second Lisbon Treaty referendum In an interview with the Irish Times, EU Industry Commissioner Gunter Verheugen said that, "I do not believe that a country or a people can be punished just because [of] a democratic right to say yes or no to an important proposal or important political decision. We have to respect this." He added, "The EU is not a state, it is a strong community of member states and the basic rule is that you can only go a step further if all member states agree." In the interview, which focused on the economic crisis, Verheugen also said that it would be wrong to write off the Anglo-Saxon economic model or globalisation: "Some people are now blaming the UK and Ireland as the countries that imported the wrong business model to Europe. In principle the idea to transform an economy and build it on [a] modern globalised basis is reasonable, but as always, also in life mistakes were made." Meanwhile, Euractiv reports that the President of the Czech Senate has said that a debate on the Lisbon Treaty originally scheduled for April could now be delayed until May, renewing suspicions that Prague may fail to ratify the Treaty before the end of its EU Presidency. EU rejects coordinated car aid plans The European Commission has said it has no plans for a pan-European aid package for the auto sector, despite calls for coordinated action to help the industry amid a dramatic decline in demand across the continent, reports the WSJ.EUobserver notes that the Commission said that the car industry had been facing "longer-term structural problems" long before the financial crisis, and "primary responsibility for dealing with the crisis lies with industry." France, Germany, Italy, Spain, Sweden and the U.K. have proposed rescue plans for their car industries. Deutsche Welle reports that the Commission has vowed to take legal action against countries that give unfair support to their national car industries. Bavarian Minister-President Seehofer demands referendum on Turkey's accession to the EU Die Welt reports that Minister-President of Bavaria and head of the CSU, Horst Seehofer, has said: "I want German citizens to be asked whether the European family should be extended to Turkey. Europe has to be much closer to its citizens". EU Trade Commissioner says concerns over 'Buy America' clause remain The IHT reports that despite concessions from the United States, EU Trade Commissioner, Catherine Ashton, has said she remains unsure about what would be "the technical impact of the wording" in the "Buy America" clause of President Barack Obama's $787 billion stimulus package, signed into law on Tuesday. Ashton said she was seeking "clarification from the administration about how they are planning to use it." The European Commission's review of the EU budget has been delayed until October. On his FT blog, Foreign Affairs Editor Gideon Rachman looks at the "sorry state of the press", writing that three years ago, Le Monde had a four-strong Brussels bureau, and now there is only one reporter, and saying "even the French can't afford to cover the EU properly." CESIFO Institute warns of inflation due to zero interest policies and increased government spending FT Deutschland reports that the European Economic Advisory Group of the prominent economic CESIFO institute has warned of the long-term consequences of a zero interest rate policy and dramatically increasing government spending. French economist and EEAG President Gilles Saint-Paul reportedly said that while inflation is not an immediate problem due to the crisis, the increases in money supply will unleash their inflationary effects in due course. Eurointelligence CESIFO report France, Germany and the UK are proposing a tough list of additional EU sanctions to be imposed against Iran. Five countries - Greece, Cyprus, Spain, Austria and Sweden - are reportedly opposed to the new sanctions.Open Europe
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Thursday, 26 February 2009
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