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Merkel: EU treaty change needed to strengthen EU powers over national budgets
Focus reports that German Chancellor Angela Merkel has insisted that EU Treaty changes are the only way to achieve the kind of EU budgetary surveillance and discipline measures Berlin is seeking. "We need a stronger oversight mechanism for the stability and growth pact and the European Commission can only make suggestions below treaty change," said Merkel. "We believe that anyone aiming for a durable and robust stability pact has to take treaty change into account." Such a Treaty change would almost certainly have to be put to a referendum in the UK, as the Con-Lib Government's "manifesto", published yesterday, promises to oppose and/or hold a referendum on any further transfers of powers to the EU.
Barroso: Eurozone must accept economic government "because without it monetary union is not possible"
The Commission's initial proposals to give the EU more powers to surveil and police national budgets have already divided the German government, with Free Democrat (FDP) leader Guido Westerwelle, German Foreign Minister and Deputy Chancellor, saying the proposals infringe on a "core competence" of parliamentary democracy. "It's the German Bundestag and national parliaments that determine national budgets, not the European Commission," he said according to the German press.
The Telegraph notes that the Commission's proposals would see member states, including the UK, submitting draft national budgets to be 'peer reviewed' by other member states' finance ministers. Commission President Jose Manuel Barroso said, "What we are suggesting is for there to be an assessment of draft budgets and see if this fits in well with what goes on elsewhere in Europe because national measures have an effect on others." EUobserver quotes Swedish Prime Minister Fredrik Reinfeldt saying, "That this should concern all countries is something we find a little strange."
Although unclear at this stage, the Commission's proposals suggest that budget surveillance would go further for eurozone countries, which could find themselves outvoted on their spending plans. The Commission's plans say, "The Eurogroup [of eurozone finance minsters] should have a crucial role to play in this new system of enhanced coordination and, where appropriate, have recourse to formal decision making as provided by the Lisbon Treaty" - diplomatic language for qualified majority voting, which the Lisbon Treaty allows for "measures specific" to eurozone members.
EUobserver quotes Barroso saying, "Member states should have the courage to say if they want an economic union or not. Because without it monetary union is not possible." The FT quotes EU Monetary Affairs Commissioner Olli Rehn saying, "Peer pressure lacked teeth. Good times were not used for reducing debt." However, the paper reports that the Commission opposed the idea, floated by Germany, of an EU Treaty change permitting the expulsion of countries from the eurozone that violate the rules.
Telegraph Independent IHT Irish Independent Irish Times 2 Irish Times: Beesley Irish Times 3 FT BBC EurActiv European Voice Die Welt Spiegel Focus Sueddeustche FAZ Die Zeit Focus EUobserver Les Echos Open Europe blog Commission proposal
Con-Lib coalition Government unveils compromises on Europe policy;
Conservatives water down their reform pledges
Following the formation of the new Conservative-Lib Dem coalition UK Government, the parties' agreed policy on Europe has been revealed. The Conservatives have retained their manifesto pledge to introduce a 'referendum lock' on any further transfers of power from the UK to the EU, and said they will "examine the case" for a UK Sovereignty Bill. The Government has also made it clear that the UK will not join, or prepare to join, the euro during the lifetime of the current Parliament, and that the UK will oppose any further transfers of power to the EU.
However, the Conservatives have dropped their pledge to try and gain a full opt-out from the Charter of Fundamental Rights, and to repatriate social and employment policy. The coalition agreement now only says: "We will examine the balance of the EU's existing competences and will, in particular, work to limit the application of the Working Time Directive in the United Kingdom."
They have also dropped their pledge for an opt-out from justice and home affairs, instead saying that they will approach any new legislation in criminal justice, and whether or not to opt-in, on a "case-by-case basis". The Conservatives also appear to have dropped their plan to elevate the position of Europe Minister to the Cabinet, as the job has not yet been awarded to anyone and the Cabinet is meeting today.
On his Telegraph blog former Conservative Party Chairman Lord Tebbit argues that the European question is the one on which the coalition is most divided, adding: "When the fatal split brings the coalition to an end, it will probably be over Europe." Analysis in the FT argues that "Differences on Europe [between the partners] are likely to be driven by events." The Guardian suggests that "for Europeans, the best thing that happened in London on Tuesday is summed up in two words - Nick Clegg."
BBC Europe Editor Gavin Hewitt argues on his blog: "The growing doubts in Germany as regards what kind of union they belong to may well chime with David Cameron's view that the EU is over-regulated and that the biggest challenge is to strengthen the single market and get Europe's economies growing again."
A leader in Le Figaro reads: "As regards Europe...the Conservatives may have imposed their own 'red lines': no euro entry, a referendum for any new power devolution to the EU. But cooperation between the 'brand' of the new Foreign Secretary William Hague - a spiritual son of Margaret Thatcher - and the likings of the Europhile Nick Clegg is anything but obvious".
A leader in El Mundo argues: "For the moment, polyglot Nick Clegg - former European civil servant and MEP - embodies the only hopes left for Brussels. Acting as the indispensable hinge for the safeguard of a stable majority, he has pledged to look out and prevent London from entering into open conflict with the EU". An article in Die Welt carries the title: "Cameron shows the EU and the euro the cold shoulder".
OE research: Where the parties stand on Europe BBC: Full text Con-Lib deal FT Telegraph EUobserver European Voice Times: Brittan BBC: Hewitt blog Telegraph: Tebbit blog Guardian Guardian 2 Mail Mail 2 Independent: Grice Conservative Home Independent Independent 2 Le Monde: Brady Le Monde: editorial Le Figaro El Mundo Die Welt OE blog
Discontentment in Germany over ECB's compromised role in eurozone bailout;
Poll: 44% of Germans and 38% of French want their national currencies back
An article in the IHT notes that ECB President Jean-Claude Trichet has said that the bank's decision to start buying up government bonds was not unanimous but had received an overwhelming majority. The article argues, "But an overwhelming majority without Germany, which has the eurozone biggest economy, is a bit like Hamlet without the prince."
In the FT Wolfgang Münchau argues that if Greece defaults on part of its debt obligation, the ECB will incur large losses, which will result either in a big increase in the debt of the ECB's shareholders, notably Germany, or through printing more money. Münchau argues "that would mean inflationary pressures are likely to increase...imagine what would happen if inflation were to go up. Very quickly, pressure would grow inside Germany for them to leave the eurozone."
Meanwhile Handelsblatt reports on a poll that says 44 percent of Germans want to abolish the Euro and reintroduce the Mark. In France, 38 percent of participants want to go back to their national currency.
Handelsblatt ARD Bild IHT: Friedman IHT: Weisbrot Bloomberg Guardian: Garton Ash Frankfurter Allgemeine Zeitung FTD Leader DB Research: Mayer Zeit FT FT: Münchau Handelsblatt Reuters Le Figaro Die Welt
Tories set to clash with EU on AIFM Directive next Tuesday
The FT reports that the goodwill of European leaders towards Prime Minister David Cameron could be tested as soon as Tuesday, when European finance ministers are set to consider the AIFM Directive, which will regulate hedge funds and private equity groups. It quotes officials in Paris saying that the French and German governments are determined to push the issue to a vote, which Britain is almost certain to lose. "No one is giving any quarter to a new government, said one official".
On his blog, Conservative MEP Dan Hannan notes that "The first test of the new government will come at the June EU summit with the vote on the Alternative Investment Fund Managers Directive...Both parties in the new coalition oppose the directive. You don't have to be a Euro-sceptic to see it as disproportionate, dirigiste, expensive and unnecessary...The trouble is that, other than our allies in the European Conservatives and Reformists, virtually no non-British MEPs oppose the measure."
FT EurActiv Telegraph: Hannan blog OE Research: AIFM Directive
Irish Parliament re-examines role in EU legislation
The Irish Times reports that former Irish Finance Minister Alan Dukes has said the Irish Parliament should emulate the European Parliament in extending "the envelope of its powers" with respect to the EU, adding it was "essential" that the Oireachtas "get on to the same playing-pitch" as Brussels lobby groups when it came to preparing for EU legislation. Former Taoiseach John Bruton also said that it was "vital" that parliamentary committees appoint rapporteurs to specialise in particular issues, who would keep TDs up to date with developments in European legislation.
The Times reports that disenchantment in Turkey is beginning to turn people against the idea of EU membership, and quotes Turkish President Abdullah Gul saying: "They are at a point where they need to decide whether the Union is a closed entity, whether the current borders of the EU will define it for eternity, or whether it should plan 50 years ahead and think of its grandchildren, the future".
Writing in the FT Richard Haass, President of the Council on Foreign Relations, argues that Europe is "drifting" politically, economically and militarily, which he argues "limits Nato's future role", adding: "Nato will no longer be the default partner for American foreign policy."
Opposition leader says Zapatero has reduced Spain to an EU "protectorate"
The Independent reports that, under pressure from Brussels and the White House, Spanish Prime Minister José Luis Rodriguez Zapatero yesterday announced €15bn in new austerity measures. The Telegraph quotes Mariano Rajoy, the conservative opposition leader, saying the Zapatero team had reduced the country to an EU "protectorate".
FT Telegraph Independent IHT Irish Times City AM
The IHT reports that the European Commission yesterday recommended that Estonia be allowed to adopt the euro next year, despite a critical report from the European Central Bank.
IHT FT BBC EUobserver EurActiv European Voice
Le Monde reports that the estimated cost of the construction of the ITER fusion reactor in France has risen, meaning the EU's contribution - via Euratom - will reach up to €7.2 billion, despite having initially been fixed at €2.7 billion.
The FT reports that EU data protection officials have criticised Facebook, calling changes to its default privacy settings in December, "unacceptable".
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