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Fortnightly Open Europe Bulletin: 22 December 2009

New Open Europe research finds top 100 EU regulations will cost UK economy £184 billion by 2020 The EU in 2010 - what to expect from the Spanish EU Presidency EU environmental policy awards millions in windfall profits to oil companies and heavy industry Open Europe in the news

Quote of the fortnight:   "I am in the hemicycle of the Parliament in Strasbourg.  I can't put up with it anymore!  I can't put up with it anymore!  I think I'm going to have a breakdown before I finish my term."   Rachida Dati, French MEP and ex-French Justice Minister, overheard speaking on the phone in the European Parliament, 15 December 2009

New Open Europe research finds top 100 EU regulations will cost UK economy £184 billion by 2020

Open Europe has published a 'Top 100' list of the mostly costly EU regulations, looking back to 1998. Based on the UK Government's own impact assessments, Open Europe estimates that the top 100 existing EU laws will cost the UK economy a staggering £184 billion between 2010 and 2020, even in the unlikely event that no new regulations are passed during that time period. They will cost the UK £18 billion in 2010 alone. For the same amount of money, the UK could abolish its entire budget deficit.   The costliest regulations are:   1. The Working Time Regulations Cost by 2020: £32.8bn Prescriptive working time rules which have caused massive problems for the UK's public sector, including compromising NHS patients' safety, according to a recent Government report.   2. The Climate Change Act 2008 Cost by 2020: £28.2bn A slew of new energy targets and rules which will add £130 to £200 a year to the annual domestic energy bill for a family of four in Britain. While fighting climate change is vital, the package does not represent the most cost effective way to cut carbon emissions.   3. Energy Performance Certificates for buildings Cost by 2020: £20.2bn This Directive gave rise to the Home Information Packs, which have been  widely criticised by estate agents, chartered surveyors and consumer groups for creating extra costs for home owners while providing little benefit.   4. Temporary Agency Workers Directive Cost by 2020: £15.6bn New rules for temporary agency workers, which, according to former Business Secretary John Hutton, could consign "literally thousands of people to benefit dependency" in the UK.   Open Europe finds that while the UK benefits from some EU regulations, many laws originating in Brussels are overly prescriptive and unnecessarily burdensome, and an incoming UK Government must take a radical new approach to EU legislation.   To read the press release, click here: http://www.openeurope.org.uk/media-centre/pressrelease.aspx?pressreleaseid=131   To read the full Top 100 list, click here: http://www.openeurope.org.uk/research/top100regulations.pdf   Please leave your comments on our blog: http://openeuropeblog.blogspot.com/2009/12/top-100-most-costly-eu-regulations.html

2. The EU in 2010 - what to expect from the Spanish EU Presidency

From 1 January 2010, Spain takes over the six-month rotating presidency of the EU, currently held by Sweden. The new Lisbon Treaty rules mean that the country holding the Presidency is stripped of its power to 'represent' the EU because of the appointment of a permanent EU President and Foreign Minister. However, Spanish ministers will chair most meetings of the Council of Ministers, and as the first in the next 'trio' of presidencies, Spain gets to lay out an agenda for the EU for the first six months of the year.   In a new briefing note, Open Europe outlines the main priorities for the Spanish EU Presidency, and takes a look ahead to key events and developments in the EU in 2010.  These include:   New social legislation to bolster 'European citizenship', including turning the EU into a "factory of rights" "Common economic governance", including the creation of controversial new EU financial supervisory authorities and new rules for managers of alternative investment funds Speedy establishment of the new EU Foreign Service - hoped to become "the biggest diplomatic service in the world" Efforts to turn the controversial 'Stockholm Programme' into concrete justice and home affairs legislation   To read the press release, click here: http://www.openeurope.org.uk/media-centre/pressrelease.aspx?pressreleaseid=130   To read the briefing, click here: http://www.openeurope.org.uk/research/eu2010.pdf   Please leave your comments on our blog: http://openeuropeblog.blogspot.com/2009/12/eu-in-2010.html olicy awards millions in windfall profits to oil companies and heavy industry Global leaders met in Copenhagen between 7 and 18 December in what became a failed attempt to agree global targets for reductions in global carbon emissions. Ahead of the summit, the EU offered to increase its existing pledge to cut carbon emissions from 20 percent to 30 percent by 2020.   However, the EU's principal policy for cutting carbon emissions, its Emissions Trading Scheme (ETS), is failing in its stated objective, which is to create a carbon price that encourages investment in low-carbon technologies by creating a market in tradable carbon permits.   Due to the recession, the ETS has led to a surplus of carbon permits for heavy polluters and oil companies, which they can sell off as a windfall profit. Open Europe has found that oil and gas companies' operations in the UK were granted a surplus of carbon permits worth €28.6m in 2008. For example, ExxonMobil received €4.3m and Total received €5.4m. Meanwhile, heavy industrial polluters such as Corus received €47m, while cement firms Hanson and Lafarge received €17.3m and €20.2m.   The glut of surplus permits on the market has led to a sharp increase in the number of permits being traded via carbon exchanges. Open Europe has found that the two largest carbon trading exchanges, European Climate Exchange and Bluenext, which include members such as Barclays Bank, JP Morgan, Merrill Lynch and Shell, have earned a combined average of €245,000 a day from the trading of carbon permits so far in 2009, in transaction fees alone. In total, they have made over €57m between them in 2009. According to the World Bank, the value of the ETS market increased from $49 billion to $91 billion between 2007 and 2008.   Instead of producing a firm carbon price to encourage investment in greener technologies, the ETS has become a subsidy to some of the UK's biggest polluters and has become an industry in its own right.   Click here to read Open Europe's press release: http://www.openeurope.org.uk/media-centre/pressrelease.aspx?pressreleaseid=129   Click here to leave your comments: http://openeuropeblog.blogspot.com/2009/12/ets-awards-millions-in-windfall-profits.html

 

4. News in brief

MEPs to receive pay rise and allowance increase. MEPs are to receive an extra £32,000 a year in staff allowances, following the introduction of the Lisbon Treaty, in order to employ extra staff, or increase salaries of existing employees. The increase will take the annual allowance to £203,000 in 2010, which will be increased by another £16,000 in 2011, taking the total annual allowance to almost £220,000. This is only one of the allowances available to MEPs. The increase comes on top of the proposed 3.7% pay increase for all EU officials, taking the annual salary of an MEP to £86,000.   The 3.7% pay increase is currently being blocked by member states, resulting in strikes in Brussels by EU civil servants last week. Member states have offered a 1.85% pay rise by way of a compromise, but the European Commission is opposing the pay deal, saying that it breaks EU law. European Parliament staff are set to strike again from 11-15 January. This is despite unemployment, falling wages and austerity measures for national public sector workers across the EU.(The Parliament BBC, 16 December; Telegraph European Voice Irish Times, 17 December; European Voice, 22 December)   18 'ghost' MEPs to receive full pay from New Year. A source in the Swedish government, which currently holds the rotating EU Presidency, has said the 18 'observer' MEPs whose seats were created by the Lisbon Treaty but who cannot do any work until an agreement has been ratified by all 27 member states, will be put on full pay in the New Year.  A European Parliament source said the ratification process could take between two to four years. MEPs earn £81,745 from their salary alone, and if the observers receive the other perks and allowances available to MEPs, the 18 extra MEPs will cost the taxpayer more than £6 million a year. (Telegraph, 14 December)   EU budget to rise 6% to €123 billion in 2010. MEPs have voted to increase the EU's budget to €122.9 billion (£110bn) in 2010, which is a 6% increase on the 2009 budget. Almost half of the budget, 47% or €58bn, will be spent on agriculture and rural development, with €36bn set for regional funding. The UK's net contribution to the EU budget will rise by almost 60% to €7.2bn next year, because of the cut in the annual rebate to the UK, agreed to by Tony Blair in 2005. (BBC, 17 December; EUobserver Independent El Mundo DPA, 18 December)   Eurojust President resigns in corruption scandal. José Luís Lopes da Mota, President of the EU's judicial agency Eurojust for the past two years, has resigned after an EU corruption inquiry suspended him from duty for 30 days. The inquiry related to allegations that Mr Lopes da Mota had put pressure on Portuguese prosecutors in order to stop a corruption probe involving fellow countryman Prime Minister Jose Socrates. (EUobserver El Mundo Jornal de Notícias, 17 December; EurActiv, 18 December)   Only 30% of UK voters think EU membership is a good thing. The latest Eurobarometer poll, conducted in October and November, has found that only 30% of UK voters think that EU membership is a good thing, compared with an EU average of 53%, although this is a slight rise of 2% since the last poll. 30% think membership is a bad thing, compared to an EU average of 15%, and 34% think it is neither a good nor a bad thing, compared with an EU average of 28%.   When asked if the UK had benefited from EU membership, 36% said it had, compared to an EU average of 57%, also a rise of 2% since the last poll. 49% said it had not benefited, against an EU average of 31%, and 15% said they didn't know. (Eurobarometer Eurobarometer fact sheet PA, 14 December)   Commissioner McCreevy: Sarkozy sees European Commission "as a commission for the advancement of French interests". In a speech to the Association of European Journalists in Dublin, outgoing EU Internal Market Commissioner Charlie McCreevy said that French President Nicolas Sarkozy "has laid to rest once and for all the myth that EU commissioners, certainly French ones, when they go to Brussels, are expected to leave aside their home member state national interests and political priorities and act exclusively in the community interest". McCreevy added, "What President Sarkozy's statement tells us is that like many of his fellow countrymen, he does not see the European Commission as a commission for the advancement of European interests. He sees it as a commission for the advancement of French interests." (EUobserver, 22 December) Brussels rules cost UK £18bn a year 22 December Telegraph ICM 20 December Sunday Times NOTW   Open Europe's research showing that the top 100 most costly EU regulations introduced since 1998 will cost the UK £18 billion in 2010 alone was featured in the Sunday Times, the News of the World, and the Telegraph.   Open Europe's Mats Persson was quoted in the Sunday Times saying, "Far too many [EU laws] are overly prescriptive and unnecessarily burdensome for business, the public sector and individuals. Seventy-two per cent of the cost of regulation in this country stems from EU laws. An incoming government must take a radical new approach to EU over-regulation and must be much tougher and smarter when negotiating in Europe."   Key EU financial supervision project clears a major hurdle 16 December Global Risk Regulator   Open Europe's Mats Persson was interviewed for an article in Global Risk Regulator looking at EU proposals for supervision of the financial services sector and the creation of three new EU supervisory authorities. He was quoted warning that the UK is "losing a lot of control over the regulation and supervision of its financial markets. That is, after all, the whole idea behind the proposal. It is intended to create a pan-European supervision structure. Quite clearly, it represents a transfer of power from national supervisors to the three new authorities."   EU's alternative investment directive to cost industry billions 16 December Reuters Global Risk Regulator   Reuters cited Open Europe's study on the EU's AIFM Directive, which found that the initial costs for the combined hedge fund and private equity sectors of the new rules could be between €1.3 billion and €1.9 billion. Open Europe's Mats Persson was quoted in an article in Global Risk Regulator discussing the Directive's progress through the European Parliament.   MEPs' pay rise takes salary to £86,000 16 December Telegraph 14 December The Parliament   In an article on the controversy surrounding the proposed 3.7 percent pay rise for EU officials and MEPs, the Telegraph quoted Open Europe's Mats Persson saying, "During the worst recession for generations, EU institutions are expecting a substantial pay increase for already well-paid MEPs and bureaucrats. In contrast, many member states are proposing pay freezes for public sector workers such as doctors and nurses in order to cope with massive public deficits."   Open Europe's Lorraine Mullally was quoted by The Parliament saying, "EU bureaucrats in Brussels are living on another planet. Why should they get an inflation-busting pay rise while back in the real world public sector workers face pay cuts?"   Pieter Cleppe: The lack of a credible opposition in the European Parliament leaves its new powers under Lisbon unchecked 15 December Deutsche Welle   Open Europe's Pieter Cleppe was interviewed by Deutsche Welle Radio looking at how the European Parliament has already become more assertive given the growth of its powers under the Lisbon Treaty. He argued "it's not just a disgrace that the Lisbon Treaty has been passed, but also the undemocratic way this has occurred is unacceptable". He added: "Looking at European referendums we can see that there is significant opposition to more powers for the EU in Europe. The fact that this is not sufficiently mirrored in the composition of the European Parliament shows that this institution is not democratic enough, a point made by the German Constitutional Court in its verdict on the Lisbon Treaty last June".   'Phantom MEPs' to cost taxpayers £6m a year 14 December Telegraph 21 December Lidove Noviny   In an article looking at the 18 'observer' MEPs, whose seats were created by the Lisbon Treaty, the Telegraph quoted Open Europe's Lorraine Mullally saying, "It's typical of the bloated EU institutions to pay 18 superfluous politicians to do absolutely nothing and for no good reason.  We're in the middle of the worst recession since the 1930s and yet here we are paying for nobodies to do nothing in the European Parliament. It's madness. So much for streamlining things - Lisbon just adds to the ridiculous waste and bureaucracy and taxpayers have to foot the bill."   Lorraine was also quoted in Czech daily Lidove Noviny.   EU's chief environmental policy a failure 14 December ANSA   Italian news agency ANSA cited Open Europe's research which found that oil and gas companies' operations in the UK were granted a surplus of carbon permits worth €28.6m in 2008 under the EU's Emissions Trading Scheme. Open Europe's Stephen Booth was quoted saying, "It is a perverse situation when our chief environmental policy is granting such huge benefits to companies that pose the most harm to the environment. Profits should be greasing the wheels of the emissions trading system rather than lining the pockets of the biggest polluters and carbon exchanges."

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