Europe European Commission will propose plans for EU wide CO2 tax in April FT Deutschland reports that the European Commissioner for Taxation, Algirdas Šemeta, will propose plans in April for an EU-wide CO2 tax. The article notes that Brussels officials can be' stubborn', as this proposal has suffered several failed attempts in the last two decades. A first draft has been seen by the newspaper, and the article notes that the plans include a revision of existing EU minimum rates of consumer taxes on fossil energy products such as gasoline, fuel oil, gas and electricity. On top of that, a harmonised Europe-wide CO2 tax would be introduced from 2013 onwards. Currently only a few countries have such a tax. Roland Stein, a lawyer with Freshfields Bruckhaus Deringer, claims in the article that the CO2 tax will lead to more taxes for consumers and companies. The article adds that the plans will not just serve as climate measures but would, in the longer term, also serve to fund the EU budget directly. The EU needs to reach agreement by 2013 on a new seven-year budget, and Budget Commissioner Janusz Lewandowski aims to provide the EU with direct funds according to the article. An internal Commission paper is quoted, which states that "EU direct financial sources have up till now hardly been linked with EU political objectives", and the article suggests that EU taxes would try to serve that purpose now. French Minister: "We cannot have a single currency in the absence of a European economic government" The FT notes that France wants to push for an "economic government" for the eurozone in the wake of the Greek crisis. "It is too early to talk about this openly," said an official in Paris. "But let's face it, this Greek tragedy is probably the best way to get the debate moving forward. It is a wake-up call." Following last week's EU economic summit, German Chancellor Angela Merkel agreed to treat the summits of the EU's 27 national leaders as the bloc's "economic government". However, President Sarkozy's "preference" remains much tighter co-ordination among eurozone countries and he has not abandoned the idea of occasional summits of eurozone leaders. Reuters quotes French Agriculture Minister and former Europe Minister Bruno Le Maire saying, "I'm delighted by the way the German Government has changed its stance on the economic government. We cannot have a single currency [...] in the absence of a European economic government." Euractiv quotes Spanish Foreign Minister Miguel Moratinos saying, "Economic governance is urgent...The Spanish presidency has a discourse practically the same as that of the French administration on economic governance. And the Germans are in the process of moving in the right direction." European Voice notes that Luxembourg's Prime Minister Jean-Claude Juncker, who chairs meetings of eurozone finance ministers, is pushing for the eurozone to monitor macro-economic imbalances, which he says should enhance co-ordination of member states' economic policy. Labour MP Gisela Stuart is quoted by the Birmingham Post saying "Europe's political elite don't give up, seeing the opportunity to use what they call a 'benign crisis' to bring about a greater degree of integration than would have been possible without a crisis. The fact that electorates across the union do not favour more integration is neither here nor there. The current crisis has already seen unprecedented intrusion by the EU Commission, telling Greek ministers what they must do." Meanwhile, AP reports that in an unpublished paper distributed to national governments last week, EU President Herman Van Rompuy suggests that under a new regime of stronger "economic governance" the EU would have more oversight over how member states run their economies. Van Rompuy proposes that the EU draw up a set of five common economic targets, then tailor them for each country. EU experts would monitor the goals, which would be linked to EU funding and loans. Noncompliant governments may be "named and shamed," which could affect their borrowing on bond markets. Open Europe's Sarah Gaskell, is quoted by AP describing Van Rompuy's move as"a power grab" saying it is a method "to push forward economic integration in a way that's not necessarily transparent." Open Europe blog FT Economist: Charlemagne notebook European Voice AP Reuters FranceEuractiv Greek PM pledges investigation into mishandling of public finances The FT reports that German Chancellor Angela Merkel has criticised global investment banks that may have helped the Greek government to disguise mounting budgetary problems over the years, saying: "It would be a disgrace if it turned out to be true that banks that already pushed us to the edge of the abyss were also party to falsifying Greek statistics". Greek PM George Papandreou has said a special parliamentary commission will be set up to investigate possible mishandling of the public finances under the previous conservative government between 2004 and 2009. In a speech to his cabinet he also said: "We haven't asked for money from German, French, Italian or any other taxpayers. What we want is political support to end profiteering and the defamation of our country." The FT reports that the markets expect Greece to attempt to issue new bonds next week in a high-risk move. FT EUobserver Coulisses de Bruxelles WSJ WSJ 2 FT 2 Telegraph European Voice European Voice: Fleming Coulisses de Bruxelles Bloomberg Irish Times Guardian WSJ 3 WSJ 4 WSJ: Goplan Times Reuters OE press release OE research Economist Robert Mundell: "Italy is eurozone's biggest threat" In an interview with Bloomberg Nobel prize-winning economist and Columbia Professor Robert Mundell says that Italy, saddled with the euro region's second-largest debt, is the "biggest threat" to the eurozone. "Italy has got to be worried. If Italy became a target then this would create a big problem for the euro. Whatever is being done to Greece, possibly to Portugal and maybe Ireland, has to also save Italy from that problem." He added, "It would be very difficult to bail out Italy." Commission seeks to gain influence over EU diplomatic corps by amending staff regulations European Voice reports that the European Commission is proposing changes to the EU's staff regulations to coincide with the establishment of the EU's External Action Service. Crucially, the proposal says that EEAS staff, notably the heads of the EU's delegations abroad, should report to the Commission rather than to the EU's Foreign Minister Baroness Ashton on matters that involve the 'financial interests' of the Commission. FT: Appointment of ECB President should be about finding the best person "rather than somebody from a suitable sect" A leader in the FT looks at the battle for the ECB Presidency, arguing: "Filling the positions by quotas based on candidates' regional provenance, country size and the single-mindedness of their attitude to inflation is not a formal requirement... Europe had better focus on finding the best person for the job rather than somebody from a suitable sect." Handelsblatt notes that rival candidate Mario Draghi, head of Italy's Central Bank, has come in for criticism because he was working for US investment bank Goldman Sachs when the bank helped Greece disguise its deficit through complex financial swaps. French daily Les Echos quotes Luxembourg PM Jean-Claude Juncker saying that "Berlin will have to fight to secure the ECB-presidency", as France will probably have the deciding vote, which could come at a political price. Les Echos Zeit FT Handelsblatt FT: Leader Commission nominates former Barroso aide as EU Ambassador to US The European Commission yesterday nominated Joao Vale de Almeida, a former head of Commission President Barroso's private office, as the new EU Ambassador to the US. He has also been head of DG External Relations in the Commission since November 2009. The FT Brussels blog writes: "Americans are already struggling to recall which two figures were chosen last year as the EU's first full-time president and new head of foreign policy. Now they have a third obscure European name to remember." It adds that Vale de Almeida's appointment comes in the transition before the EU diplomatic service is up and running, which means President Barroso is able to appoint him. Once the diplomatic service is operating, it will be EU Foreign Minister Cathy Ashton's job to select diplomats. FT: Brussels blog EUobserver European Voice European Voice 2 Euractiv FT France and Italy call for a reform of EU border controls and Frontex Spanish daily ABC reports that France and Italy have bilaterally agreed to drive plans at the EU level to clamp down on illegal immigration in an effort to "reinforce with urgency bilateral and European frontiers." French Immigration Minister Eric Besson has suggested that the EU border control agency, Frontex, should be revised in a "more energetic" way with a project of reforms to reinforce policies of police controls, vigilance and the immediate return of illegal immigrants. Commission study indicates that state-aid has not helped save jobs An article in the FT reports on a two-year study carried out by consultancy Oxera for the European Commission, suggesting that the "Billions of euros spent by European governments to prop up failing companies in the hope of saving jobs may have been misdirected". The articlenotes that "the report - which was commissioned before the financial crisis struck - could encourage EU competition officials, who must vet state aid applications, to target assistance more carefully and question some of the 'job-saving' justifications put forward by member state governments". The Times notes that last-ditch attempts to save the Corus steel works plant in Teeside, and with it 1,600 jobs, are being "hamstrung" by EU state aid rules over what the Government can offer as an incentive to potential bidders. Officials from the European Commission and the US are beginning renewed discussions on the long-term prospects of the SWIFT agreement on sharing bank data after the European Parliament rejected an interim deal last week. European Voice Coulisses de Bruxelles Writing in the Spectator, Mark Wood, former Editor-in-Chief of Reuters, argues that the Conservatives would do well to ally themselves with Angela Merkel: "Cameron will need to think about how he actually gets his way on Europe. A sulky isolationism will get him nowhere and he knows it...Together, Germany and the UK could get their way on a whole range of EU issues and be a force for consensus and realism in global forums such as the G20." A new poll in the magazine Paris Match shows that 57 percent of people prefer former PM and IMF head Dominique de Villepin to President Nicolas Sarkozy, with only 38 percent preferring Sarkozy. Independent Telegraph Paris Match A survey conducted by the European Central Bank reports that Small and Medium sized Enterprises (SMEs) have been particularly affected by the economic crisis, as access to finance has become more difficult. The report indicates that Spanish companies are the worst hit. La Vanguardia Cinco Días FT ECB: press release The FT reports that Alistair Darling is open to reducing the interest payments Iceland must make under the proposed Icesave compensation deal, raising the possibility that the 6 March referendum on the deal will be avoided. The Institute of Contemporary Development (INSOR), a think-tank headed by Russian President Dmitry Medvedev, has argued in an essay that Russia should consider joining both the European Union and NATO, saying: "This will stimulate (Russia's) further positive transformation...Relations with the European Union should be raised to a level that could eventually lead to Russian membership". Data published yesterday by Eurostat reveals that the eurozone returned to a trade surplus in 2009 of €22.3 billion, after a record deficit of €54.7 billion in 2008.Open Europe
Thursday 18 February 2010
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