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Brown calls off Sarkozy visit;
Evans-Pritchard: EU's three new finance authorities should be focus of the City's concern
The FT reports that French President Nicolas Sarkozy abandoned plans to visit Gordon Brown today to try to calm fears that the City of London will be subject to a French-inspired drive for tighter financial regulation, after the appointment of Michel Barnier to the role of EU Internal Market Commissioner including financial services. The article notes that "Downing Street convinced the Elysée palace that a visit by the French president in the midst of a political backlash could be counter-productive." A headline in Le Monde reads: "Did Sarkozy cancel his trip to London at the request of the British?" The Times notes that Whitehall sources insisted that it had been officials in London, not Paris, who cancelled the visit, and the Mail reports that Brown refused to fit a meeting in with him.
In an interview with La Tribune, Michel Barnier says: "I want everyone to find a bit of calm and serenity. What I read in certain British newspapers doesn't make sense. Nobody needs to explain to me the importance of the City. I share the view of the Chancellor of the Exchequer, Alistair Darling: a strong City is in the interests of the whole of Europe." Asked if he will go to London, he says: "I will go to London, of course, if possible before the end of the year. Just as I will go to Madrid, Berlin and the other European capitals. But on Franco-British relations we must not get it wrong. One day I heard the President of the Republic [Sarkozy] expressing in the Council of Ministers his desire to work with London whatever the differences or the problems. He has a good relationship with Gordon Brown and I know that will continue."
The FT quotes French Finance Minister Christine Lagarde insisting that the French "respect and value" the City, but adding: "We need a City that plays by different rules." French Budget Minister Eric Woerth is quoted by the Telegraph saying, "How many Englishmen have there been whose policies didn't suit France? France never said anything...We're not going to apologise (for taking the post)."
Referring to this week's agreement between EU finance ministers to create three new EU authorities with binding powers over national regulators to supervise financial markets, the Telegraph's Ambrose Evans-Pritchard writes "the real threat to the City does not come from the Commission. It comes from the three new agencies created to oversee banking (London), insurance and pensions (Frankfurt), and securities (Paris)."
He adds, "These bodies have the power to impose rules on Britain by majority vote. Each of the EU's 27 states has one vote: Malta counts as much as Britain in deciding the fate of the UK's biggest industry. We have no veto. The UK can invoke a safeguard clause if measures infringe 'fiscal sovereignty'. Yet it takes a vote by EU finance ministers to trigger the procedure."
Evans-Pritchard concludes, "Most thinking is informed by street populism, and a desire to believe that the Rhenish model has been vindicated. That is the view that Britain will face in the voting chamber of les trois agences."
The Independent questions Alistair Darling's claim that he has secured "safeguards" concerning the UK's "fiscal responsibility" for European banking rescues. The paper reports that although the text of the agreement states that the new overarching European supervisory authority "shall ensure that no decision... impinges in any way on the fiscal responsibilities of member states", it offers only limited resistance in cases where a national government and European regulators clash. The article notes that "Article 23 of the document leaves open the possibility that a majority of EU finance ministers and the EU regulator could force the UK taxpayer to foot the bill for the bailout of a European institution."
In the House of Commons last night, Shadow Europe Minister Mark Francois said that the "real loser" from yesterday's meeting of European finance ministers was the Chancellor and the British taxpayer, according to PA.
A leader in the FT argues "The City is rightly alarmed by the approach to finance taken in some EU corridors: the current draft directive on private equity and hedge funds is nonsensical. But not everything that comes out of Brussels is a French plot."
Meanwhile, writing in the Guardian, Fraser Nelson argues that the Conservatives won't "make too much of a fuss defending the City of London from the threat of EU regulation...lest they are accused of being in league with their banker friends."
Le Monde Times EUobserver FT: Peel FT FT: Leader AFP WSJ Guardian City AM Telegraph Telegraph: Evans-Pritchard Telegraph: Hannan blog City AM 2 Independent WSJ 2 Guardian: Nelson Open Europe briefing AFP El País ABC La Tribune Le Monde Le Monde 2 Mail
EU gives €34.5 million to help subsidise over-fishing of bluefin tuna
The Times reports that, in answer to a European parliamentary question from a Spanish MEP, the EU's Fisheries Commissioner Joe Borg has revealed that, between 2000 and 2008, the EU has given a total of €34.5 million to subsidise Mediterranean tuna fishing fleets, despite warnings from scientists that overfishing is pushing the species close to extinction. Spain received more than half of the subsidy, with French and Italian fleets the next biggest beneficiaries. Cyprus, Malta and Greece were also given money.
The article quotes the Green MEP, Raül Romeva i Rueda, saying: "I am shocked at the scale of the subsidies given to the bluefin fleet. This shows clearly the hypocrisy of the EU, which insists on the need to conserve fish stocks while simultaneously encouraging the rapid expansion of a fleet that was already too large." Since 1955, bluefin tuna populations have shrunk to a quarter of their former size, with the bulk of the reduction occurring since 2002. Between 2001 and the present, the average size of the actual fish has shrunk by half.
Majority of British people want immigration to be dealt with at national level
The Guardian reports that, according to an opinion poll carried out by the German-Marshal Fund think-tank, Britons are uniquely sceptical about the EU policy on immigration policy. People were asked, "Immigration policy should be decided on the...regional, national or EU level". A majority (53%) wanted the powers kept at the national level, almost double the European average of 28%. "There is considerable support in the continental European countries polled for addressing immigration at the European Union level," said the survey. "A majority in all European countries except the United Kingdom favoured immigration policy decision-making at the EU level."
Guardian German Marshal Fund: Survey
France and Germany ready to "beef up the capabilities" of the eurozone group
On his blog, Jean Quatremer reports that Berlin and France have demanded that the election of the new Chair of the eurozone be postponed until 18 January so a debate on the "new role" of the eurozone group could emerge. Under the Lisbon Treaty, the eurozone is given a legal form. French Finance Minister Christine Lagarde is quoted saying: "it seems to be important for us to identify the necessary means, the objectives of the group, the priorities we have to set, the question on the necessity to have or not have a secretariat, to beef up the capabilities of the Eurogroup". She also mentioned that the international representatives of the eurogroup would be discussed, an issue that has been blocked for the last ten years.
Coulisses de Bruxelles Eurointelligence
Denmark in last-minute crackdown on VAT fraud under EU's ETS scheme
The Guardian reports that Denmark, host of next week's UN climate change conference, has rushed an emergency law through parliament to clamp down on a virulent form of VAT fraud, associated with the EU's Emissions Trading Scheme (ETS) for carbon. The British, French and Dutch governments took similar action in the summer, meaning that much of the fraud involving carbon credits moved to Denmark, where registration of carbon quotas for the ETS is easy and a VAT rate of 25% makes the fraud attractive to international criminals.
The fraud occurs when a trader of carbon credits in one EU country buys some from another country free of VAT, then sells them on, charging the VAT to the buyer. The seller then disappears without handing the VAT to the taxman. Richard Ainsworth, Professor of VAT policy at Boston University is quoted saying: "It is extremely surprising that after the French, British and Dutch had to move against this fraud in the summer that the Danes did not act more quickly, especially with the climate summit about to start."
Meanwhile, the Economist features a special report on the carbon economy, and reports that the European Commission is now looking at setting carbon prices through a carbon tax rather than the current cap-and-trade system. The article claims that "Both methods have their advantages and drawbacks, but a tax wins out for simplicity and stability."
Guardian WSJ Open Europe research
Agreement on AIFM Directive among member states unlikely before Christmas
The FT reports that negotiations between member states, over revisions to the EU's AIFM Directive, are being described as "difficult" by Brussels diplomats. The article quotes one negotiator indicating that general agreement among member states may not be reached before the Spanish EU Presidency takes over on 1 January: "I find it very difficult to see a deal before Christmas". There are still areas where current proposed changes could be toughened further. For example, UK Labour MEP Peter Skinner wants an amendment to force a separation between depositories and management of the funds they safeguard.
EU Commission review of corporate governance could include issues of board responsibility
The Irish Times reports that outgoing EU Internal Market Commissioner Charlie McCreevy will call for Chief Risk Officers in banks to report directly to a special committee of nonexecutive directors, bypassing Chief Executives and Executive Directors in a speech today. The speech will set out some of the thinking in a forthcoming review of corporate governance by the European Commission, although responsibility for the review will lie with Michel Barnier.
Le Monde reports that President Sarkozy has decided on a 'neither nor' policy for Afghanistan. He will neither withdraw French troops, nor reinforce the French force with more troops. The article notes that although no new troops have been promised, the official French response has been to: "applaud the American troop surge".
Spanish site La Información looks at Open Europe's 'Top 50 examples of EU waste', citing the EU funds used to open an Irish pub in Gibraltar.
La Informacion Open Europe research
The Economist's Charlemagne column considers the possibility of Swiss accession to the EU, writing: "Switzerland has much to balance against accession - its low tax rates, its still-discreet banks, its bigger contribution to the EU budget as a full member. Swiss people fear their identity might 'dissolve' in the EU."
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The IHT reports that Airbus' A400M military transporter will make its first test flight next week, with hopes that the sight of the plane in flight will help persuade European governments to commit to the programme and shoulder some of its rapidly rising costs.
Le Figaro reports that Slovenia has declared that it will no longer use its veto to prevent Croatia from joining the EU in 2012.
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EurActiv reports that with the Lisbon Treaty now in force the EU has an official competence in sport, and is set to launch a wide stakeholder consultation to prepare for the first EU sports programme. The head of the Commission's sports unit said that the programme will: "Contribute to the promotion of European values (physical and moral integrity of sportspersons, fairness of competitions)".
In a debate in the House of Commons on Europe yesterday, Shadow Europe Minister Mark Francois said: "It would also be churlish not to express our gratitude to the Foreign Secretary for his decision to champion Tony Blair in his campaign for the presidency... In the EU, the front-runner seldom gets the job. By doing everything that he could to make Tony Blair the front runner, the Foreign Secretary did a great deal to undermine his case."
The WSJ reports that the US' Special Representative for Afghanistan and Pakistan Richard Holbrooke has made the first public comments about the effects of the Lisbon Treaty, admitting the Obama administration had scarcely registered the shift. However, he added that the Treaty could help advance cooperation between the EU and the US concerning the mission in Afghanistan.
The FT's Brussels blog argues that next week's EU leaders summit in Brussels faces an important choice on Turkey over whether to toughen existing measures which are holding up accession talks over the failure to open up ports and airports to Greek Cypriot traffic.
Belgian daily De Standaard reports that the EU hopes to reach agreement today with Latin America and the US, over the "banana war" which is one of the longest running trade disputes at the World Trade Organisation. A deal would end the preferential treatment of ACP countries and would lead to a lowering of import tariffs on bananas.
Le Figaro reports that the European Central Bank is going to leave interests rates unchanged in an attempt to control the level of inflation in the eurozone.
Romanians will go the polls this Sunday to elect a new President.
Reuters reports that outgoing EU Competition Commissioner Neelie Kroes said yesterday: "In hindsight, perhaps we should have investigated credit rating agencies", over their high ratings for financial products now considered risky. But she did not say whether the Commission would now launch an investigation into the way ratings agencies assign ratings to financial products.
During a hearing in the EP, OECD adviser Geoff Lloyd, told MEPs that a financial transactions tax should be considered as a viable option. It notes that the European Commission has "echoed views it has held for a while, saying that if a Tobin tax were to come into being, it should be aimed at speculative transactions and especially derivatives."
Euractiv
A Group of Polish senators is planning to submit a plea to the Polish Constitutional Court to check whether the Lisbon Treaty is compatible with principles of Polish Constitution, reports Wiadomosci.
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