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EU budget increase could cost the UK an extra £680m in 2012

The European Commission presented its proposal for the EU’s budget in 2012 today. The draft proposal calls for a 4.9% increase to the budget, equal to €6.2bn, bringing the total EU budget up to €132.7bn. The UK’s share of the national contributions to the EU’s budget is 12.4%, after the rebate, this puts the increase in UK contributions to the EU budget in 2012 at €769m or £680m, according to Open Europe calculations. The proposed increase is over two percentage points above the rate of inflation in Europe.

A comment piece in the WSJ, titled ‘Who wants money’, looks at the EU budget ahead of the Commission’s proposal. The article cites examples from Open Europe’s report “Another 50 Examples of EU Waste” revealing that €411,000 was spent on a Hungarian canine well-being centre, which was never built; €527,000 was used to encourage Swedish fisherman to reduce their catch, but was instead used to buy another fishing boat; and a €16,400 grant was given to encourage Tyrolean farmers to be more mindful of their environment.
Telegraph Public Service Europe Elsevier FD WSJ Open Europe research Commission press release Commission budget proposal documents

Citing Open Europe report Dutch Europe Minister calls on Commission to clarify EU aid spending;
Parliamentary debate called on EU aid

Ben Knappen, the Dutch Europe Minister, has called on the European Commission to clarify the use of EU aid, citing Open Europe’s recent research on the EU’s external aid spending. Open Europe’s report highlighted examples of waste, such as a €463,000 dance project in Burkina Faso. “This project appears to carry water to the sea,” Knappen said. “That is a shame, because EU development aid is very important, also for the Netherlands.” Elsevier and Nieuws.nl report that EU aid spending will now be subject to a debate in the Dutch parliament.

Open Europe’s report highlights that only 46% of EU development assistance reached lower income countries in 2009, with Turkey, an upper middle income country, the highest recipient. Knappen said, “We need to help our neighbours, that is in our interest. But such assistance must be reconsidered, especially when it comes to the significant assistance to candidate countries such as Turkey.”

Die Welt today feautures Open Europe’s research. The article quotes Research Director Stephen Booth saying that, “Geopolitical considerations and old colonial ties” dictate where the much of the EU’s external aid goes. The article also notes Open Europe’s criticism that around 10% of EU aid is passed on to other multilateral donor organisations, such as the UN, incurring unnecessary administration and transaction costs before it reaches those in need. Open Europe’s research is also cited by Italian daily Il Giornale, Dutch daily AD, NU.nl, Powned TV and by Turkish daily Milliyet.
Open Europe blog Open Europe research Open Europe press release Nu.nl AD Nieuws.nl Powned TV Milliyet Welt Il Giornale Dutch Foreign Ministry press release Elsevier

German Foreign Ministry official: I expect a Greek debt restructuring;
Bundestag MPs threaten to rebel over permanent euro bail-out fund

Greece is moving closer to defaulting on its debt, as the cost of borrowing on three-year bond jumped to 21.37% despite a relatively successful debt auction held yesterday. Reuters quotes Clemens Fuest, chairman of the German finance ministry's technical-advisory committee, saying "One must recognise the realities, I am expecting a haircut." The FT reports that Greece’s EU-backed €50bn privatisation programme marks a last-ditch effort to avoid a debt restructuring, but that the pace of reform is slow amid signs of ‘reform fatigue’.

In Frankfurter Allgemeine Zeitung, Business Editor Gerald Braunberger argues in favour of a restructuring. “The risk of contagion to other eurozone countries is smaller now than roughly a year ago when everybody was panicking”, he says.

Meanwhile, Handelsblatt considers at the prospect of German MPs rebelling against Angela Merkel over the eurozone’s permanent bail-out fund. Klaus Peter Willsch, an MP for Merkel’s party CDU, has said he will vote against the package, alongside 12 MPs from Merkel’s junior coalition partner FDP. Willsch is quoted by Mitteldeutsche Zeitung claiming that there are about 30 to 40 CDU and CSU MPs in the Bundestag that take his line, meaning that the package could be blocked by parliament.
Foreign Policy: Borg Handelsblatt FT FAZ Handelsblatt Ta Nea Eleftherotypia WSJ Jornal de Negocios. FT FT 2 FT 3 FT 4 FT 5 FT: Wolf WSJ: leader

European Parliament Committee calls for eurozone bonds

The European Parliament’s Economic Committee voted yesterday to push for new economic governance measures including instructions for the European Commission to draft plans for a eurozone bond, a stronger policing role for the Commission and new sanctions. The amended package now requires fresh negotiation with EU member states. European Parliament Spokesman John Schranz is quoted in EUBusiness saying, "The general idea is that sanctions are more automatically applied at an earlier stage and that voting rules are changed to apply to a wider range of sanctionable circumstances". UK MEP Vicky Ford was successful in securing provisions for improved transparency measures to also cover the EU’s budget process.
Handelsblatt EUBusiness European Parliament press release

German MP: EU could save €30bn from regional budget as number of poor regions decreases

Handelsblatt reports that the number of EU regions with a GDP of 75% or below the EU average – a criteria for receiving extra EU money – has gone down in recent years. German MEP Markus Pieper, an EU expert, has estimated that the decrease could save the EU up to €30bn from the €350bn regional fund over the next seven year budget period. However, the article notes that in an attempt to preserve his department’s budget, Regional Commissioner Johannes Hahn has proposed a new category of assistance to regions where per capita income is between 75% and 90% of the EU average.
Handelsblatt

The UK and France announced yesterday that they will send a team of military advisers to Libya to advise rebels on intelligence-gathering, logistics, and communications. Meanwhile, Libyan leader Gaddafi warned against the EU’s military backed humanitarian mission to Libya, ‘EUfor Libya’, saying it would be seen as a military operation, reports the IHT.
Guardian Guardian: Jenkins Mirror EUobserver

Members of the European Parliament's Constitutional Affairs Committee have backed a report that calls for the creation of 25 additional MEPs, elected on a pan-European basis to create a new “pan-European” constituency.
BBC EUobserver

Il Sole 24 Ore reports that Italian Finance Minister, Giulio Tremonti, speaking at the Constitutional Affairs Committee in Brussels, called for “stress tests” of the EU Treaties, adding that they are “products of a different era”.
Sole 24 Ore

The WSJ reports that Germany is warming up to the candidacy of Mario Draghi for the presidency of the European Central Bank.
WSJ Times

The Telegraph reports that new EU proposals have steered away from labelling meat from ritually slaughtered animals as Halal or Shechita to avoid causing religious offence, instead opting for the label of "meat from slaughter without stunning".
Telegraph

Germany has warned the Hungarian government that its new constitution, passed by parliament on Monday, is not compatible with EU values, reports El Pais.
El Pais

Schwarzenegger advised to run for EU President
According to Newsweek, Arnold Schwarzenegger, former governor of California, is being advised by aides to run for the EU presidency, reports AFP. "In the next few years, the EU will be looking for a much more high-profile president -somebody who can unify Europe," said Schwarzenegger's chief of staff.
Sky News AFP

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