Tuesday, 13 September 2011

Open Europe

On 14 September, Open Europe will host an event in London, entitled, “How much power should the EU have over Justice and Home Affairs?”, with a keynote speech from Crime and Security Minister James Brokenshire MP and responses from Shadow Europe Minister Wayne David MP and Dominic Raab MP. For more information, please contact Sarah Hodges on 0044 (0)207 197 2333 or shodges@openeurope.org.uk

Europe

More than 100 MPs attend meeting of group calling for re-ordering of UK relationship with the EU
Last night more than 100 Conservative MPs attended the first meeting of a new parliamentary group designed to reshape the UK’s relations with the EU. MP George Eustice, one of the founders of the new group, told the BBC, “It is absolutely imperative that Britain has a very coherent plan, as to what we want the European Union to do in the future…so we actually have a new relationship with the European Union that is settled.” The aim of the group is to lay the groundwork for a re-ordered relationship with the EU in future treaty negotiations and also reach out to MPs from other parties.

Open Europe’s pamphlet, “The case for European localism”, authored by former Policy Exchange Director Anthony Browne and Open Europe’s Director Mats Persson, which sets out new mechanisms to strengthen democracy and localism in Europe, is cited by the IHT,Handelsblatt and Gavin Hewitt’s BBC blog.

On Conservative Home, Anthony Browne looks at yesterday’s meeting, noting that “It represented the entire range of opinion in the [Conservative] party, from Europhiles to withdrawalists, discussing what has historically been the party’s most toxic issue…There were no attacks on parliamentary colleagues. No demands that we pull out now.” He goes on to say, “The phrase European localism is targeted at the Achilles heel of the Liberal Democrat position – it is inconsistent at best to be a big supporter of pushing power down within the UK closer to the citizens, while wanting to centralise it in Brussels as far away from citizens as possible.”

Seven countries join Britain’s opposition to Commission’s EU budget proposals
Eight of the EU’s largest net contributors hit back at the European Commission's 2014-2020 budget plans on Monday, with France, Germany and the UK stating that the proposed increase was “excessive.” The joint statement said, “The Commission proposal is too high. The increases of spending over the next MFF are significantly in excess of what is needed.”

The Treasury has estimated that the Commission’s plans would lead to an 11% increase based on this year’s contributions. However, British demands for a freeze were not discussed. “There are different countries represented around the table. Our position on a real terms freeze hasn't altered,” said Europe Minister David Lidington.

Italy in bond-buying talks with China as borrowing costs keep rising
Italy’s Economy Ministry has this morning confirmed reports from the FT that Italian Economy Minister Giulio Tremonti discussed the possibility of a huge purchase of Italian government bonds with Lou Jiwei, the Chairman of China Investment Corp, one of the world’s largest sovereign wealth funds. Meanwhile, Italy sold €7.5bn of one-year bonds at a record-high interest rate of 4.15% yesterday, up from 2.95% in last month’s auction. The spread with medium-term German bunds is also on the rise ahead of today’s auction of five-year bonds.

Separately, the ECB bought €14bn worth of eurozone government bonds last week, up from €13.3bn the previous week. In Italian business daily Il Sole 24 Ore, economist Francesco Caselli argues, “Jürgen Stark’s resignation from the ECB brought closer the moment – which by the way has never been that far off – when the ECB will have to stop buying Italian government bonds…In other words, Italy is moving at full speed towards the moment when it will no longer be able to finance itself on the markets. Who will save us then?” He continues, “All other European solutions (Eurobonds, bailout fund, etc.) are mere chimeras…The IMF intervention seems less unlikely.”

German CSU adopts motion calling for eurozone expulsion for chronic high-debt countries;
French bank shares plunge amid fears over Greek exposure
FT Deutschland reports that the leadership of the CSU – the Bavarian sister party of German Chancellor Angela Merkel’s CDU – yesterday adopted a motion to be endorsed at the party’s annual conference in October, threatening eurozone countries which consistently breach deficit and debt rules with expulsion from the single currency area. An article in Handelsblatt notes that, after Slovakia, Slovenia also appears to be going to vote on changes to the EFSF’s size and scope in the last quarter of 2011 – meaning that the EFSF may not be able to buy eurozone government bonds until the end of the year.

Separately, in an op-ed in the paper, Head of IFO Institute Hans-Werner Sinn suggests that going back to the Deutschemark should not be seen as a threat in Germany, arguing, “As much as I am still pro-euro, the calculations of KfW [showing that German GDP would be €50bn smaller if Germany were to reintroduce the Deutschemark] are wrong…We should not let them scare us! Germany can and must dare to resist.”

Meanwhile, French bank shares plummeted yesterday following reports that Moody’s could cut the credit ratings of BNP Paribas, Société Générale and Crédit Agricole because of the banks' significant exposure to Greek debt. Separately, Expansión reports that, according to the latest European Commission forecasts, Spain will not meet its deficit targets for 2011 and 2012.

The IMF yesterday unblocked the second tranche of its bailout loan to Portugal, worth almost €4bn, notes Expansión. The FT reports that US Treasury Secretary Tim Geithner is to attend the next meeting of EU finance ministers, which will take place in Poland on Friday.

On Friday, Open Europe jointly organised an event at the 21st Economic Forum in Krynica Zdrój (Poland), on “The future of the eurozone”. Speaking at the event were: Brendan Brown, Executive Director, Head of the Economic Research, Mitsubishi UFJ; Georg Milbradt, Former Minister-President of the Free State of Saxony, Germany; Jan Mladek, Czech Shadow Finance Minister; Declan Ganley, Chairman and CEO, Rivada Networks Ltd; and Wieslaw Rozlucki, Strategic Adviser, Rothschild Polska.

German Interior Minister warns Commission against seeking new powers over border controls
The FT notes that the European Commission is on Friday expected to unveil new proposals to temporarily suspend countries from the passport-free Schengen travel area if they fail to keep illegal immigrants out of the bloc. However, Germany’s Interior Minister Hans-Peter Friedrich, of the CSU, warned that, “The question of security is one of the core tasks of a state; we are not willing to hand over new powers to the European Commission…We will not let Brussels tell us when to carry out [border] controls. When we think they are necessary, we will carry them out as well,” according to Euractiv.de.

In the Sun, Conservative MEP Dan Hannan argued for a referendum on the UK’s EU membership.
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EUobserver reports that Europe ministers from seven non-euro member states – including Poland, Bulgaria and Romania – met in Brussels yesterday to discuss how they can best influence the debate on the future of the eurozone. Separately, DPAquotes Polish Prime Minister Donald Tusk saying he would be “extremely careful” on Treaty changes.

Jyllands Posten reports on three separate opinion polls showing that the Left coalition is poised to win Denmark’s general election on Thursday.

EU ministers have agreed to extend copyright protection for recorded music to 70 years, meaning works by The Beatles, Rolling Stones and Sir Cliff Richard won't come out of copyright in the near future, the European Commission said yesterday.

The BBC reports that the EU’s first two Galileo satellite-navigation spacecraft are ready for launch.

Handelsblatt reports that pilots may no longer be forced to retire at 60 in Germany, after the ECJ ruled that this age limit was discriminatory and pilots should be allowed to work until the age of 65.

Belgian Radio 1 reports that in Belgium a new movement is campaigning against an EU Directive which could force the replacement of old elevators – despite them working perfectly – with expensive new ones, apparently as a result of lobbying by the elevator industry.

UK

The UK’s banking industry faces a sweeping overhaul, following recommendations from the Independent Commission on Banking, chaired by Sir John Vickers, that banks' retail businesses be segregated from their investment-banking arms. The ICB estimated the cost to Britain’s banks of implementing the changes at up to £7bn.

New on the Open Europe blog

Angela Merkel’s office lights up: The German Association of Young Entrepreneurs’ original way of protesting against eurozone bailouts

Member states shoot across Commission's bow in budget talks


Posted by Britannia Radio at 14:22