Europe UK outnumbered in AIFM Directive negotiations; Barnier rejects UK and US fears of EU protectionism The FT reports that Gordon Brown and French President Nicolas Sarkozy will today try to hammer out a compromise deal on the EU's AIFM Directive, aimed at regulating hedge fund and private equity managers. Brown shares the concerns of Tim Geithner, US Treasury Secretary - raised in a letter to EU Internal Market Commissioner Michel Barnier earlier in the week - about the protectionist elements of the Directive, which would severely restrict access to the EU market for offshore funds and managers. Spain, which holds the rotating EU Presidency, is pushing for an agreement on the proposal at a meeting of EU finance ministers next Tuesday and the FT Deutschland reports that other governments are ready to use the qualified majority voting system to overrule British objections to the Directive. Other countries unhappy with aspects of the proposed text are thought to include Ireland, the Czech Republic, Malta, Sweden and Austria, but this is not enough to form a 'blocking minority' in the Council. France 24 quotes a European diplomat saying that London must recognise it will have no option but to bow out. "That's the way the system works, with the qualified majority voting arithmetic heavily stacked against Downing Street", they said. The two main sticking points in the negotiations remain rules for managers' depository institutions, and the restrictions on funds and managers based outside the EU. According to the IHT Amadeu Altafaj, a spokesman for Mr. Barnier, has responded to the concerns raised by Geithner's letter, saying that "the new hedge fund rules do not discriminate against foreign players and are not protectionist." Euractiv notes that he added, "The letter expressed some concerns about something that does not exist." Geithner wrote in his letter to Barnier that "You will see that our approach in the US maintains full access for EU fund managers and custodians to our market" - a message that the FT notes has been interpreted by many in Brussels, and the alternative investment industry, as a thinly veiled threat that the US would retaliate with its own measures against EU funds. Separately, MEPs are currently working on their own version of the proposal. A leader in FT Deutschland argues, "There are many who want to go further [with the Directive]. They mostly sit in the EU Parliament, which can influence regulation. They demand holding periods for investments for example, or even total exclusion of non-EU funds...in light of the crisis in Greece it has become popular in the last week to verbally abuse hedge funds and other speculators, which is only partly fair. After all, it is not the speculators who are responsible for the Greek debt crisis, but the government in Athens." Open Europe research Open Europe research: Investment trusts IHT Irish Times City AM City AM: Heath WSJ WSJ 2 EUobserver EurActiv Telegraph FT FT 2 Hedge Funds Review La Vanguardia La Razon Reuters Italia FTD: Leader L'Expansion Le Figaro Investir Reuters France 24 German Finance Minister: As last resort a country should exit the eurozone but stay in the EU Writing in the FT, German Finance Minister Wolfgang Schäuble has outlined further details of a proposed 'European Monetary Fund' (EMF). He argues that "It is obvious" that the eurozone's rules are "still incomplete", and that an EMF would be about "making monetary union more resilient to a crisis". He argues that an EMF should come with strict rules and tough sanctions, saying: "From now on, a member state with an excessive deficit should not receive EU cohesion funds if it is not making sufficient savings...Eurozone members could also be granted emergency liquidity aid from a 'European monetary fund' to reduce the risk of defaults. Strict conditions and a prohibitive price tag must be attached so that aid is only drawn in the case of emergencies that present a threat to the financial stability of the whole euro area. This effect should be further reinforced by excluding the country concerned from the decision-making process - aid must be the last resort." He added, "Should a eurozone member ultimately find itself unable to consolidate its budgets or restore its competitiveness, this country should, as a last resort, exit the monetary union while being able to remain a member of the EU." Reuters reports that Eurozone Chairman Jean-Claude Juncker said today: "Yes I do think (an EMF will be formed)...By no means can this develop into a channel to avoid the no bailout clause of the (EU) treaty, so these principles have to be sorted out. This is not a short-term story, it's months, and no way is this meant to deal with the Greek case." He added that the issue would not be on the agenda of the eurozone finance ministers' meeting on Monday. Les Echos reports that French Prime Minister Francois Fillon, during a trip to Berlin on Wednesday, called for the EMF project to be "assessed quickly". German magazine Stern reports that Dutch PM Jan Peter Balkenende has said he supports the idea of an EMF. FT FT: Schäuble Die Zeit FAZ Spiegel FTD Irish Times WSJ: Jamieson Stern FT: Brussels blogEconomist Europolitics Europe 1 France 2 Les Echos Le Point Reuters OE blog Germany and France continue to work on Greek bailout plans Austrian daily Kurier reports on leaked negotiations of a possible Greek bailout. It is estimated that Greece will need €55 billion by the end of the year in order to avoid a default, with Berlin willing to commit up to €20 billion and Paris up to €10 billion. The article notes that Berlin is hoping that once it is clear that Greece would be supported by the EU in the face of a risk of default, "the markets will take care of the rest." For the Greek aid package the contribution will be calculated according to the shares in the ECB. Other states which are in financial difficulties, such as Spain, Portugal and Ireland, would be excluded. The Office of the German Chancellor prefers to provide half of it through guarantees, and the other half through the purchasing of Greek bonds through German state bank KfW, according to the article. Le Monde also reports that Eurozone member states are getting closer to an agreement on the details of a bailout plan for Greece. The objective is to reach a compromise at the eurozone finance ministers' meeting on Thursday. Kurier Le Monde Bloomberg TV Telegraph IHT Les Echos OE Research Surplus emissions permits earn industry at least £1 billion Companies across Europe are hoarding greenhouse gas emissions permits worth hundreds of millions of pounds, according to analysis by campaign group Sandbag. The Guardian reports that the surplus credits have been amassed from the over-allocation of permits to pollute from the EU's emissions trading scheme, and by buying cheap credits from carbon-cutting projects in developing countries and then holding on to their more expensive official EU allowances. Four sectors, including iron and steel and cement, received permits to emit 66m tonnes more carbon dioxide than they needed in 2008. In addition, they bought cheap offsets to allow them to emit a further 18m tonnes. In total the surplus allowances would have been worth nearly €1.2bn (£1.1bn) in 2008, or just over €1.1bn at today's carbon price. Based on the forecast average price of €30 a tonne for the third phase of the ETS from 2013-2016 by analysts Point Carbon, the permits could be worth more than double that in future. If the companies stockpiled surplus credits accumulated from 2008-2012 until the third ETS phase, they could be worth as much as €3.2bn at today's prices, according to Sandbag. UK will not impose language tests for foreign doctors as they would break EU rules The Mail reports that Britain is sticking rigidly to EU rules that outlaw checks on foreign doctors' language skills, despite the death of David Gray, who was killed by a German doctor with poor English skills, the General Medical Council (GMC) said. The GMC, which regulates doctors, also revealed that France will get around the ban by not having tests as such, but by inviting prospective foreign GPs in for interview to check their language skills. The GMC met Health Secretary Andy Burnham last week to demand an end to the ban on checks - but were told it could mean fines from the European Commission. "EU's importance for the media is diminishing" Il Sole 24 Ore reports that the number of accredited journalists to the European Commission has shrunk in recent years; today there are only 752 compared with more than 1300 in 2005. In a letter to European Voice, President Lorenzo Consoli says "this is an indication of the diminishing importance of Brussels for European media". He then argues that "The current unsatisfactory situation has been brought about partly because of the nature of communication coming from the EU institutions. The European Commission, in particular, gives too little background information about decision-making, only details of the finely tuned results". Staffing proposal for EAS to be submitted next week EUobserver reports that EU Foreign Minister Cathy Ashton is aiming to submit a draft organisation plan for the EU's External Action Service (EAS) to EU diplomats on 17 March. According to an EU official who has seen the document, the organisation will be headed by nine senior officials: a Secretary General, two Deputy Secretary Generals and, below them, six Director Generals. Current favourites for the Secretary General job include the French Ambassador to the US, the Secretary General of the French Foreign Ministry, and a senior aide to German Chancellor Angela Merkel. Meanwhile, European Voice reports that the foreign ministers of Cyprus, Latvia, Lithuania and Slovenia wrote to Cathy Ashton last week arguing that each member state "has to be adequately represented in the EEAS, as the sense of joint ownership is crucial". EUobserver EUobserver European Voice EU Parliament approves Europe 2020 strategy EurActiv reports that the EU Parliament has approved the Europe 2020 economic strategy, with 462 voting for, 140 against and 58 not registering a vote. However, the article quotes MEP Herbert Raul (CDU) saying "A strategy that wants to create jobs from the drawing board and at the same wishes to focus on 'green technology' will fail as others have failed before. The EU should no longer be attempting 10 year strategies, which now only exist in North Korea and Cuba." Hamburg industry complains about EU REACH Directive Welt Online reports that Axel Gedaschko, Senator of the State Ministry of Economic Affairs, is calling for a reduction in the bureaucracy caused by the EU's REACH Directive on chemical firms, following complaints by industries in Hamburg. A survey shows that companies are burdened with €2.3 million in additional costs by REACH, endangering the existence of some plants, possiblyleading to unemployment and lower tax revenues. The Telegraph reports that credit rating agency Standard and Poor's has warned that increased "Debt-related sovereign vulnerabilities" in the eurozone could see a "resulting fiscal pressure from a sustained increase in financing cost [which] could be significant in our view." In a special report on Germany the Economist discusses how Germany's role and approach to the EU has changed: "Germany now defends its national interests more frankly, especially in Europe", adding "In European emergencies Mrs Merkel has been watchful of German treasure and national prerogatives. Like her predecessor, she wants a permanent seat for Germany on the UN Security Council. Germany is coming to resemble France in balancing European cohesion with the pursuit of national status". Economist Special Report: Germany 1 Economist Special Report: Germany 1 Jacques Delors: "I have never believed that 'political union' was on the doorstep" In an interview with Italian newspaper La Repubblica, former European Commission President Jacques Delors discussed the idea of "economic governance" within the EU: "I want to laugh when I hear that common economic governance was discussed during the last meeting of the EU Council. They are moving from one extreme to another. I have never believed that 'political union' was on the doorstep... there is a lack of political will to cooperate. Most European leaders ignore the way the EU works and despise the 'communitarian method'". BNP MEPs fail to publish any details of £530,000 received in EU allowances The Telegraph reports that BNP MEPs Nick Griffin and Andrew Brons have failed to publishdetails of their European Parliamentary allowances, worth a combined £530,000 every year. Despite promising to make all accounts and expenses public once available, the relevant sections of their websites have remained blank since elected. Other Labour, Conservative and Liberal Democrat MEPs have all given detailed breakdowns of how allowances are spent. Despite Mr Griffin employing three staff members, according to his website, and Mr Brons employing four people, European Parliament officials have told the paper that neither MEP has any staffers accredited to work in the Brussels or Strasbourg seats of the European Parliament. Commission claims EU is on target to meet its renewable energy goals Both the FT and EurActiv report that the EU is on track to exceed its goal of sourcing 20 per cent of its energy from renewable sources by 2020, with Germany and Spain offsetting a lagging Italy. A preliminary forecast released yesterday by the European Commission concluded that renewable energy sources would likely account for 20.3 per cent of European Union energy consumption in 2020. DPA reports that the EU will change the selection procedures for its personnel, with EU Commissioner for Administration Maros Sefcoviv saying that only the "cleverest and the best" should get the top positions within the EU. Less emphasis on knowledge and more emphasis on the skills of future candidates should be taken into consideration. The Economist Charlemagne column analyses new EU President Herman Van Rompuy noting that his popularity is rising. A delegation of 130 EU observers is being deployed in Sudan to observe the preparation of the elections, reports Ouest-France. EUobserver reports that Temur Yakobashvili, Georgia's Minister for Re-Integration, has said that Georgia cannot "put itself on hold" until the EU's new Lisbon Treaty institutions start working, but needs to flag up the persisting problems with Russia's strong foothold in South Ossetia and Abkhazia. El Pais notes that the European Central Bank (ECB) yesterday criticised Spain for failing to declare concrete measures which it will address its current fiscal imbalances. The WSJ reports that Portugal's economy contracted 0.2% in the fourth quarter of 2009, after two quarters of economic growth.Open Europe
Friday, 12 March 2010
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