Friday, 30 September 2011

Open Europe

Open Europe will host three fringe events at the 2011 Conservative Party Conference in Manchester. Speakers will include: Europe Minister David Lidington, Czech Defence Minister Alexandr Vondra, Swedish International Development Cooperation Minister Gunilla Carlsson, Chris Heaton-Harris MP, Dr. Kay Swinburne MEP, the Economist’s David Rennie, and the Telegraph chief political commentator Peter Oborne. Please note that you do not have to register to attend the events, but you need to purchase a security pass to enter the conference area.

Europe

Germany, Estonia and Cyprus approve expanded role for eurozone bailout fund
Financial markets and eurozone leaders responded positively to the news that the Bundestag approved the expanded EFSF, although theFT reports that within the German government the main response was relief. The debate will now turn to whether the EFSF can be increased through bigger guarantees or leveraging its existing funds. The WSJ reports that German Finance Minister Wolfgang Schäuble has already rejected both ideas. However, FAZ suggests that he has not completely ruled out some form of leveraging, although he is clearly wary of any plan which may increase the exposure of German taxpayers to the crisis. Estonia and Cyprus both also approved the expanded EFSF last night, and the vote in Austria is due later today.

EUobserver reports that the parliamentary leader of Slovakia’s Freedom and Solidarity (SaS) party has indicated that the condition his party is attaching to its backing for the EFSF expansion is that the country would not have to contribute to the fund. A date for the vote is yet to be fixed, but it could take place on the 17th of October.

Open Europe Director, Mats Persson appeared on BBC News, BBC Five Live, BBC Radio Wales and ABC discussing the Bundestag vote arguing that markets are already looking for a bigger and more effective bailout fund and we'll probably be in this position again before too long.” Open Europe’s Raoul Ruparel was quoted by the Independent and on the Guardian’s live blog saying, “Merkel's tough choices are far from over with the passage of this vote.”

Meanwhile, officials from the Greek Finance Ministry resumed their talks with the EU/IMF/ECB review team in Athens yesterday, although the start was delayed after protesting civil servants blocked entrance to the building where the meeting was due to be held. After a new venue was found, the Greek Finance Ministry announced the talks had taken place in a “positive and creative environment”. However, theWSJ reports that delays and divisions within the government are hampering the new austerity measures, particularly plans to increase the speed and size of cuts to state workers. Greek Prime Minister George Papandreou will meet French President Nicolas Sarkozy in Paris today to discuss the Greek crisis.

EU agency worker rules a threat to Government’s youth employment plans;
28,000 young workers’ contracts at risk
The Telegraph reports Open Europe’s finding that the new regulations implementing the EU’s Agency Workers’ Directive (AWD), which come into force tomorrow, could put 28,000 young workers’ contracts at risk by making them too expensive to keep on. Such a loss would wipe out more than half the 50,000 new jobs the Coalition has promised to create for young people in each of the next two years. Open Europe’s Research Director Stephen Booth is quoted saying, “Making it more expensive for employers to take on agency workers for longer than 12 weeks will create greater uncertainty and fewer opportunities for young people looking for work.” He added, “The Government could still delay the introduction of these rules and explore ways to implement them in the lightest way possible.”

Commission threatens to sue UK over benefits test
The European Commission has threatened to take legal action against Britain arguing that the UK’s “right to reside” test for determining benefit entitlements indirectly discriminates against non-UK nationals. The Government fears the move could leave taxpayers facing a bill of up to £2.5bn to pay for EU nationals, including “benefit tourists”, a new cost that could ruin the Coalition’s plans for welfare reform. In theTelegraph, Work and Pensions Secretary Iain Duncan Smith writes, “This kind of land grab from the EU has the potential to cause mayhem to nation states, and we will fight it.”

Open Europe’s Stephen Booth is quoted in the Mail saying, “Freedom of movement within the EU has largely been positive for the UK but issues surrounding benefits and social security are understandably very sensitive. For the freedom of movement within the EU to work, governments have to be able to assure their citizens that welfare systems won’t be abused.”

Meanwhile, in the Netherlands, Elsevier reports that a parliamentary enquiry has found that that the Dutch government underestimated and was underprepared for the number of migrants from Eastern Europe after EU enlargement.

German Media on EFSF vote: Here but no further
There is a near-unanimous consensus among the commentators that although welcome, the passing of the EFSF upgrade by the German Bundestag yesterday is insufficient, and further measures will have to be implemented.

In Germany, the result was welcomed but there is opposition to any further German financial support. Bild’s deputy editor Nicolas Blome argued: “This time it has to be enough… [Chancellor Merkel] should not try to increase the rescue umbrella even more, to once more increase the German financial risk [or else] the government will break up”, while the FAZ’s political editor Berthold Kohler warned in a front page editorial that the vote was “no carte blanche for a rescue orgy”, and that the estrangement of Europeans from Europe would not decrease if what the peoples of Europe consider to be right is continually violated.

In Il Sole 24 Ore Roberto Perotti describes increasing the effective lending capacity of the EFSF as a “lifeboat that is not sufficient to save Europe”, arguing that while it may have been enough to intervene in Greece, “the game is now being played in Italy and Spain, where a lot more will be needed”.

In the Telegraph, Andrew Lilico argues that “almost every scheme suggested recently for saving the euro — eurobonds, a leveraged two-trillion-euro EFSF, the ECB guaranteeing to buy all the debts of Italy and Spain — is simply a variant on the same debt pooling theme [however] Debt pooling would not be the salvation of the euro; it would (at best) be a mechanism to achieve its orderly death.”

In Il Corriere della Sera, editorialist Antonio Polito argues that the letter outlining the measures to be taken by the Italian government in return for the ECB buying Italian bonds “burns like a slap in our face…It’s very infrequent to see two central bankers [ECB President Jean-Claude Trichet and his nominated successor Mario Draghi], custodians of the supreme good of the currency and therefore unelected and non-political figures, dictating a fully-fledged legislative programme to the elected government of a sovereign state.”

City AM reports that ICAP chief executive Michael Spencer has criticised eurozone politicians as “deluded” for their “red herring” plans to introduce a financial transactions tax yesterday.

EU’s anti-fraud office says €1.8bn of EU funds wrongly spent in 2010;
Number of irregularities up on last year
OLAF, the EU’s anti-fraud office, has found that €1.8bn of EU funding was wrongly spent in 2010. According to OLAF’s report, 10,332 cases of irregularities, including potential fraud, were reported in 2010. By comparison, 7,769 cases, involving €1.4bn in EU funds, were reported in 2009. The greatest number of irregularities came from payments from the EU's regional and cohesion policy, according toEuropean Voice.

EUobservernotes that almost 60 staff have left the EU’s diplomatic corps, the EEAS, during the past nine months amid reports of bad working conditions.

In an interview with Die Zeit, German Finance Minister Wolfgang Schäuble has argued in favour of having a directly elected EU President, saying, “After the first electoral campaign, Europe will have made a step forward. It will have changed.”


Italy’s ruling coalition is split over who is going to succeed to Mario Draghi as the next governor of Italian Central Bank, with Italian Prime Minister Silvio Berlusconi and Economy Minister Giulio Tremonti (with the backing of junior coalition partner Lega Nord) supporting different candidates. Il Sole 24 Ore notes that, of the four candidates currently in the race, only Treasury Director-General Vittorio Grilli is in favour of Eurobonds.


The FT reports that the UK is isolated in opposing a proposed regulation on derivatives trading. The rules would increase the powers of ESMA, the EU’s new markets regulator, meaning UK regulators could in principle be overruled on decisions to authorise a clearing house that wanted to operate in the UK.


A two-day EU summit planned in Warsaw on the EU’s Eastern Partnership has been overshadowed by the Belarussian Foreign Minister’s refusal to attend and the ongoing trial in Ukraine against former Prime Minister Yulia Tymoshenko.


EurActiv reports that yesterday the Polish rotating EU Presidency announced that Croatia’s EU accession treaty signing ceremony will take place in Warsaw on 19 December.


Open Europe’s ‘Beers of Europe’ fringe event has been listed as the 6th most popular event at the Conference on Guido Fawkes’ blog.


New on the Open Europe blog

Forget About the Crisis: The EU Wants to put a Man on the Moon (Well, at least a Robot)

What’s A Few Hundred Billion Between Friends…?

The ECB’s Italian Wishlist

A Pyrrhic Victory for Merkel?

Posted by Britannia Radio at 17:11