Britannia Radio

Open Europe

Europe

Ashton proposes an extra €1.2bn of EU funding for Middle East and ex-communist states;
Hague gives “pre-emptive warning” to Ashton on EU foreign policy powers
In the wake of the “Arab Spring”, EU Foreign Minister Baroness Catherine Ashton will today unveil a proposal to reform the EU’s policy towards the Middle East, North Africa and Eastern countries - the so-called European Neighbourhood Policy (ENP). European Commission President José Manuel Barroso said yesterday that the proposal would involve increasing funding to the EU’s neighbours by an extra €1.24bn, bringing the total funding for the period 2011-2013 to almost €7bn. In response to criticism that, in the past the EU provided funding to regimes that failed to reform, the proposal states that “Increased EU support to its neighbours is conditional. It will depend on progress in building and consolidating democracy and respect for the rule of law…For countries where reform has not taken place, the EU will reconsider or even reduce funding.”

Meanwhile, speaking on the BBC’s Today programme, Foreign Secretary William Hague echoed remarks made by Europe Minister David Lidington yesterday, criticising Catherine Ashton’s demands for a 5.8% increase to the EEAS’ budget. Hague said, "I don't think it is necessary to have such an increase at a time where diplomatic services across the world, certainly across Europe, are tightening their belts, becoming more efficient”, adding that money should be spent on promoting trade and economic stability in North Africa and the Middle East. “That is the big issue rather than the administrative budget of the External Action Service," he said. He also noted that, “We will always guard against mission creep. We are very clear about what's a UK responsibility and what is an External Action Service responsibility. I am certainly giving a pre-emptive warning. Where we have seen one or two instances of it, we have dealt with that but we will always be vigilant about that.”
Open Europe research BBC Today: Hague Telegraph: Leader Mail FT European Voice Le Figaro Les Echos Irish Times IHT

Greek political parties fail to reach consensus on new austerity measures;
Cable: Greece will need to restructure its debt
Kathimerini reports that cross party talks held yesterday in Greece failed to yield a deal on the new austerity measures casting fresh doubt over the government’s ability to implement the EU-backed economic reforms attached to the original bailout. Greece’s main opposition party, New Democracy, suggested that it supported the privatisation programme but not the tax increases. Greek Prime Minister George Papandreou is said to be considering holding a referendum on the new measures in order to gain widespread support. Greek Trade Unions also announced another general strike for 4 June, although they urged members to engage in peaceful “Spanish style” protests rather than the violent rallies which have been seen in Greece recently.

Yesterday Business Secretary Vince Cable broke the Cabinet line by suggesting that Greece will need to restructure its debt. Cable argued that cutting the deficit was not enough, saying “Attacking the debt, and dealing with it in a more pragmatic way, is the way out of this. I think in practice what will happen…is a negotiated rescheduling.” The Government moved quickly to reiterate that Cable’s comments did not represent the Government line on the eurozone crisis.

Sueddeutsche reports that according to insiders more than 50 complaints have been sent to the German Constitutional Court over the eurozone bailout funds. An article in Der Spiegel highlights the fact that the ECB has been providing lending to European banks in exchange for very risky capital, making it exposed to hundreds of billions of euros of risky assets. La Repubblicareports that Italy’s Court of Auditors has said that the Italian government will need to cut public debt by €46bn per year in order to bring the debt/GDP ratio below the 60% threshold established by the EU’s Stability and Growth Pact. The latest plan, expected to be present by the Italian government at the end of June, is reported to aim for cuts of €40bn over three years.
Kathimerini Kathimerini 2 Reuters Reuters 2 Vima Capital Kathimerini 3 FT European Voice WSJ FT 2 FT 3 FT 4 EUobserver Les EchosLes Echos 2 Le Figaro El País Times Telegraph Irish Independent Express Times: Leader Irish Times Les Echos: Rehn EurointelligenceEuractiv.de Irish Independent 2 Finfacts.ie FAZ Leader Reuters 3 Spiegel NOS Repubblica Il Sole 24 Ore Reuters Italia Repubblica 2

BRICS countries rally against European IMF Chief;
Lagarde officially announced her candidacy for IMF post
The BBC reports that Brazil, Russia, India, China and South Africa – the so-called BRICS group of emerging countries – have issued a joint statement criticising the “obsolete unwritten convention” of appointing a European as IMF Chief, arguing that it “undermines the legitimacy” of the institution. Meanwhile, BBC reports that French Economy Minister Christine Lagarde has officially announced her candidacy for the IMF chairmanship. Writing in the FT, Martin Wolf argues that the next IMF Chief should not be a European, warning: “Regimes that do not bow to the winds of change get blown away. The Europeans need to recognise that truth in time. They will not do so. But it will prove a big mistake.”
Times Le Figaro BBC Coulisses de Bruxelles WSJ FT: Wolf FT BBC Le Monde

The European Commission yesterday presented proposals for a “safeguard clause” allowing for the reintroduction of visa requirements for non-EU countries which currently have visa-free travel arrangements in place with the EU. The clause can be invoked in the event of a sudden increase of asylum requests or a massive flow of illegally staying nationals from one or more of these countries, reports EUobserver.
EUobserver FT BBC EC press release

EurActiv France reports that yesterday French Agriculture Minister Bruno Le Maire and his Dutch counterpart Henk Bleacher agreed that the budget of the EU’s Common Agriculture Policy (CAP) should be kept at least at current levels in the next EU long-term budget, due to run from 2014 to 2020. They also agreed on the need to maintain direct payments to farmers.
EurActiv France

The FT reports that UK Europe Minister David Lidington will today urge the City of London to explain why it is vital to the whole of Europe, and to help shape new EU regulation affecting the UK’s financial services industry. “Our approach should be to seek the best regulation, not the least regulation,” Lidington will say.
Open Europe research FT

In De Standaard, Bart De Wever, leader of Flemish nationalist party N-VA - Belgium's biggest party – has defended his decision to give an introduction to a speech made by Czech President Václav Klaus during a Belgian state visit. De Wever noted, “whoever honestly believes in European integration, will need to learn to listen to its critics”, adding that “we need euro-realist answers”.
Standaard: De Wever

Writing on the Guardian’s Comment is Free, Paul Mason argues that, “With the single currency being tested to breaking point, the EU's implicit social solidarity is in chronically short supply.” In the Independent, Hamish McRae concurs, “What is happening in Europe is about money, of course, but in the past few days it has become clear how much it is also about power.”
Irish Times: Pine Irish Independent: McRae BBC: Hewitt Times: Kaletsky Independent: McRae FT: Atkins Guardian: Mason

The European Commission yesterday set out its plans to overhaul intellectual property rights in the EU, including enforcement of rules on digital piracy, creating a legal framework for cross-border management of music copyright and modernising trademark rules. The Commission also announced that it will bring in an independent mediator in an attempt to settle a 16 year dispute between hardware providers and rights holders.
WSJ EurActiv European Voice

The European Parliament’s Economic Affairs Committee has voted in favour of a draft law which aims to standardise OTC derivatives so that they can be moved through clearing houses. The UK governments wants the law to be extended to include all derivatives not just OTC ones. The draft law still has to pass through the European Parliament and be agreed on by member states who have the final say on this issue, meaning a deal is not expect until the end of the year.
EurActiv European Voice Reuters

EU member states have agreed on nuclear stress tests scenarios, which will include natural disasters, airplane crashes and man-made accidents, however terrorist attack scenarios will be handled by a separate group of experts.
Stern Welt Deutschlandfunk

UK

UK Parliament says EFSM bailout fund is “legally unsound”
MPs last night passed a ‘watered-down’ motion urging the Government to seek a “eurozone-only arrangement” for future bailouts, adding that the temporary €60bn bailout fund, the EFSM, which the UK is liable for, is “legally unsound”. The motion was passed with 267 votes to 46. The motion amended a tougher motion that would have required the Government to oppose any further use of the bail-out mechanism unless the UK was excluded. 30 backbench Conservative MPs, which supported the tougher line, voted against the Government.
Hansard Conservative Home Spectator: Coffee House blog Conservative Home 2 BBC

New on the Open Europe blog

Hague and Lidington raising the stakes?
Open Europe blog

Bad weather on the Spanish horizon?
Open Europe blog