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Government tables EU 'referendum lock' Bill
The Government yesterday published its Bill containing the so-called 'referendum lock', designed to prevent the transfer of powers from Westminster to Brussels without voters' consent, and a 'sovereignty clause', which ministers say will assert the primacy of Parliament. The referendum lock will cover the Lisbon Treaty's ratchet clauses, which allow EU leaders to permanently scrap national vetoes by one unanimous vote, and any decision to join the euro. The Bill also includes a 'significance clause' which allows ministers to decide what constitutes a transfer of powers in certain cases.
Open Europe Director Mats Persson was quoted in the Mail and the Telegraph saying, "This will certainly restore some democratic control over EU affairs to the British people and Parliament, which is a good thing. However, the Bill leaves too much discretion to ministers to decide what constitutes a transfer of powers. One can certainly see situations where governments may use such discretion to cede important day-to-day powers to the EU in future."
On Conservative Home, Tim Montgomerie argues that the referendum lock is "good but not good enough." The BBC quotes Lib Dem leader in the European Parliament Andrew Duff criticising the Bill as an "appeal to a populist and nationalist constituency."
In the Economist, Bagehot argues, "Pledges on Europe need treating with caution, but if you wanted a real referendum lock, this is what it would look like." He adds that, "A European Union Bill with a functioning referendum lock amounts to a UK Veto Bill. The consequences are stark: either Britain will have to be offered an opt-out from ambitious new treaties, or British voters will vote No and trigger a monumental row."
FT Economist: Bagehot BBC Conservative Home Mail Express Sun Telegraph Guardian OE blog
2011 EU budget talks deadlocked over MEPs' EU tax demands
EU member states and the European Parliament failed yesterday to reach an agreement on next year's EU budget. According to European Parliament President Jerzy Buzek, MEPs were ready to accept the 2.9% increase proposed by the UK and other 11 governments at the last European Council summit, but only if member states committed to "serious debate" on a new EU tax to finance the EU budget after 2013. European Voice reports that the request led to a stalemate in negotiations after the UK and four other member states refused to offer such a pledge. A new round of talks will be held on Monday. If no agreement is reached, next year's EU budget will be frozen at 2010 levels. De Volkskrant quotes Dutch Europe Minister Ben Bot saying he doesn't "see any room" for a deal to be sealed.
Meanwhile, Open Europe's report listing 50 new examples of wasteful EU spending, including the dog fitness and rehabilitation that was never built, featured on last night's BBC Newsnight and continues to receive coverage on BBC online, Alex Rossi's Sky News blog, Le Point, Dutch daily Telegraaf, Dutch magazine Elsevier, EUbusiness, Greek daily Ta Nea, Bulgarian daily Dnevnik, Hungarian InfoRadio, Estonian dailies Postimees and Ohtuleht, Czech website iDNES, online site Delfi and by AFP.
Open Europe's Stephen Booth is quoted in Swedish daily SvD saying that the European Court of Auditors' latest report, which found that over 90% of the EU budget was affected by errors, "is a hugely embarrassing annual tradition."
Newsnight BBC Sky News blog Elsevier Telegraaf BBC 2 SVD Postimees Ohtuleht Le Point Ihned La Croix iDNES EUbusiness Le Point Ta Nea InfoRadio.hu Delfi Dnevnik European Voice Irish Independent Le Monde Les Echos Le Figaro Irish Times FT Reuters Telegraph Euobserver Euractiv IHT Volkskrant Handelsblatt
Irish Finance Minister: high borrowing costs partly driven by "unintended" German comments;
Angela Merkel: "The future crisis mechanism has nothing to do with the debate going on right now".
Yesterday, senior EU and Irish officials moved closer to conceding that Ireland may have no choice but to seek a bailout, as Irish bonds fell for the 13th consecutive day, raising borrowing costs to historic levels. The Irish Independent reports that in a survey conducted yesterday, 20 out of 30 analysts said "Ireland would not make it through 2011 without a [bank] bailout". The article notes that the average size of that bailout was seen to be around €48bn.
The Irish Times reports that informal contacts are under way between Brussels, Berlin and other capitals to assess their readiness to activate the EU's €750 billion rescue fund in the event of an application from Ireland. An article in the Heard on the Street column in the WSJ suggests Ireland should go directly to the IMF instead, arguing that the "IMF funding would almost certainly be cheaper than from the [eurozone] facility".
Irish Finance Minister Brian Lenihan yesterday said that the spike in borrowing costs was partly driven by "unintended" German comments proposing bondholders be forced to take losses or "haircuts" if sovereign debt is restructured, reports the Telegraph. Mr Lenihan said he would look for clarification of the German plans. At the G20 Summit in Seoul, German Chancellor Angela Merkel said, "The future crisis mechanism has nothing to do with the debate going on right now", reports Bloomberg. However, she insisted it was unfair for taxpayers to take responsibility for the cost of sovereign rescues. "Let me put it simply: in this regard there may be a contradiction between the interests of the financial world and the interests of the political world", reports the Irish Times.
In an opinion piece in the Telegraph, Jeremy Warner comments "Unfortunately for Ireland, there is no similarly obvious escape route. It cannot devalue its way back to growth". The Irish Independent quotes Fine Gael's finance spokesman saying "Once the instrument of devaluation was taken from us, which we resorted to on a number of occasions in the 80s and 90s to restore competitiveness, a new regime had to be put in place and that was not put in place", arguing that Ireland has not fully adjusted to the euro currency.
Meanwhile, Greece's 2010 budget gap is expected to rise above initial forecasts, forcing the government to implement further austerity measures, reports the WSJ. "We now expect the budget deficit for this year at about 9.3% and the revised 2009 figure will likely be above 15%", a senior Greek government official said yesterday.
El Pais: Torreblanca El Pais IHT WSJ WSJ: Roth WSJ: Fidler WSJ IHT WSJ WSJ: editorial WSJ Economist Irish Times Express Irish Independent Irish Independent 2 Irish Independent: Molloy Independent Irish Times Irish Times 2 Irish Times FT FT FT: Tett Telegraph Euobserver Telegraph Mail EUobserver Euractiv Expansion El Pais Bloomberg Les Echos Le Figaro Reuters France
German Finance Minister outlines new eurozone rescue plan including "voluntary" suspension of voting rights
Handelsblatt notes that a German Finance Ministry paper on the proposed crisis resolution mechanism, states that aid would come with strict conditions, such as a "voluntary suspension of voting rights" in the Council of Ministers. The paper also argues that new bonds issued by eurozone governments should include "collective action clauses," which would prevent individual creditors vetoing decisions to restructure debts.
MEPs give final backing to new EU hedge fund rules
The European Parliament yesterday gave its final backing to the AIFM Directive. Reuters reports that the new EU rules could lead to more hedge funds moving to tax-friendlier Switzerland, according to industry insiders. The Independent quotes Amanda Rowland from Pricewaterhouse Coopers, arguing: "Today's vote is a strong reminder to the asset management industry that a much more intrusive regulatory regime is on its way [...] Managers need to start considering how their businesses will be affected."
BBC Independent Reuters FT Belga Basler Zeitung OE report
Dutch daily Trouw reports that most of the €2.25 billion from the European Social Fund disbursed by the EU to help Romania integrate Roma people has disappeared into the hands of corrupt politicians and bogus aid organisations. According to the paper, only 20 out of 300 Romanian NGOs which have been applying for this money are actually active.
Il Sole 24 Ore reports that the Italian government is on the brink of collapse. Speaker of the Italian Parliament's lower house Gianfranco Fini has said that all ministers from his party are set to quit the cabinet next Monday if Prime Minister Silvio Berlusconi refuses to resign.
The frontpage of Handelsblatt reports that German Chancellor Angela Merkel is planning a cabinet reshuffle which will see German Finance Minister Wolfgang Schäuble replaced by current Interior Minister Thomas de Maizière.
The Telegraph reports that the EU's fishing authority has called for a 50% cut in British cod fishing next year, which could cost Scottish fishermen £445 million in revenues. Bertie Armstrong, of the Scottish Fishermen's Federation, is quoted saying that "the Commission's whole approach is defined by arrogance."
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