Revised draft of European fiscal pact extends role for EU institutions and makes explicit reference to the single market Open Europe’s Director Mats Persson was quoted in Saturday’s Times as saying, “To use the EU institutions in the way proposed seems to be a pretty big stretch under EU law, but clearly this draft has put the UK on the back foot and Cameron has work to do, particularly in removing reference to the single market.” Mats was also quoted in Saturday’s Telegraph and on the paper’s live blog while in the FT Weekend he argued that, in spite of divergences between Cameron and French President Nicolas Sarkozy, the two leaders could make common cause in opposing the ECJ being used to impose fiscal discipline on recalcitrant states. Meanwhile, Deputy Prime Minister Nick Clegg will today host a mini-summit of European liberal leaders from around Europe, including Dutch Prime Minister Mark Rutte, EU Economic and Monetary Affairs Commissioner Olli Rehn, and Germany’s Economy Minister Philipp Rösler. The talks will cover Britain's future role in Europe. In an essay for FAZ looking at the fiscal pact, former ECB Chief Economist Otmar Issing argues that “The EU can hardly dispense with a member who, despite its national selfishness in individual cases, can be predominantly regarded as a voice for free markets.” Handelsblatt’s London correspondent Matthias Thibaut argues that “the tolerance of the British with the European vision is lowered after every euro crisis summit. Similarly, Germans always breathe a sigh of relief when Chancellor [Angela Merkel] once again rejects Eurobonds. However [unlike David Cameron] no one accuses her of acting in an ‘un-European’ manner – at least not in the German press.” Separately, the front page of the FT reports that David Cameron has left the door open to increasing the UK’s contribution to the IMF, and therefore indirectly, the eurozone crisis, depending on other countries’ willingness to contribute. However, the government insists that no decision has been made on increasing the £10bn in additional IMF contributions agreed under a parliamentary vote last July. Germany and Italy give lukewarm response to French plans to go it alone on FTT; During his visit to Paris, Italian Prime Minister Mario Monti insisted that Italy is now open to the idea of an EU-wide financial transactions tax, but warned that “it is necessary that individual European countries do not go it alone”. Le Monde reports that Laurence Parisot, who chairs the French employers’ federation Medef, has warned that if France were the only one to apply the FTT, “We would immediately experience a massive delocalisation” of financial activities, adding, “We would all be losers.” Les Echos reports that plans to introduce the FTT may be discussed by the French government as early as in February. Meanwhile, speaking on the BBC’s Andrew Marr show yesterday, David Cameron said, “If the French themselves want to go ahead with a transactions tax in their own country, then they should be free to do so…The idea of a new European tax when you’re not going to have that tax put in place in other places, I don't think is sensible and so I will block it.” Separately, Ernst & Young estimates in a new study that an EU-wide FTT could leave a €116bn hole in Europe’s public finances. Marie Diron, economic advisor to E&Y, is quoted in the Telegraph saying, “The [Commission’s] publicised €37bn revenue figure definitely masks the true effect of the tax on EU public finances.” Lib Dem MEP Sharon Bowles, who chairs the European Parliament's Economic and Monetary Affairs Committee, told the Sunday Telegraph that she fears she could fail to be re-elected to her position because of her nationality, noting that there had been “a thumping of the table of people saying the Committee should be chaired by someone from the eurozone.” Franco-German meeting to focus on boosting growth in the eurozone Ahead of the meeting, Monti said that Italy had made a “decisive contribution” to solving the crisis, so now other countries must do the same. La Repubblicareports that Italian Economic Development Minister Corrado Passera told a conference in Paris on Friday, “We must give Europe an authentic central bank with the means and instruments necessary to cope with the financial markets’ stability and liquidity.” Open Europe’s Raoul Ruparel is quoted in City AM as saying, “It is part of the European mind-set at the moment to raise the stakes ahead of crucial negotiations, increasing the pressure on participants…However, it is also important to remember that as he is unelected, Monti constantly wants to remind the public of contributions he has made, otherwise he will lose his position.” The FT reports that Greek bondholders may accept a higher write down than expected, between 55%-60%. The deal may also include the use of collective action clauses, which raises questions over the ECB’s reported €45bn holding of Greek bonds which it has so far refused to write down. After initial opposition, the Belgian government has rushed to trim €1bn from its latest budget after being warned by the Commission that it could face fines totalling millions of euros for breaching the new eurozone fiscal rules (due to a disagreement over the actual level of the deficit). Separately, overnight deposits at the ECB hit a new record high of €464bn on Thursday. FT Deutschland reports that according to the opinion of economic experts, the ECB will halve its interest rate in mid-2012 from 1% to 0.5%. Meanwhile, in an appearance on Sky News’ Murnaghan programme, former UK Chancellor Alistair Darling argued, “The [EU] summit just before Christmas was a complete disaster because they came up with a solution that may have been appropriate a few years ago but is actually locking them into a suicide pact.” Separately, the Sunday Business Post reported that Irish government officials have discussed if the Irish President should ask the Supreme Court to rule on whether Europe’s plans for fiscal union would require a referendum in Ireland. The Telegraph reports that EU Foreign Minister Baroness Catherine Ashton has demanded an extra £22m in funding for the European External Action Service, despite the Government’s pledges to resist increases in its budget. However, as a part of the agreement, the funding will now come from the EU’s institutional administration budget, which will in total go up by less than inflation. Politiken reports that the on-going Danish EU Presidency will aim to be “one of the cheapest yet”, having a budget of around €35m, compared to €115m and €81m, respectively, for the Polish and Hungarian Presidencies in 2011. The Mail on Sunday reported that the price of replacements for pearl light bulbs, banned by the EU, has soared by up to 174% in a year. Le Journal du Dimanche reported that, according to a new IFOP poll, Socialist candidate François Hollande would finish only 2% ahead of Nicolas Sarkozy in the first round of the French presidential elections, due to take place in April. The Independent on Sunday reported that the European Commission has confirmed it is considering proposing a new EU directive to ensure every country applies the same standards to production and surgery involving medical devices, such as breast implants. The paper suggested that this could potentially trigger a referendum in the UK under the Government’s ‘referendum lock.’ The Mail on Sunday reported that European Commission plans to set up an approved database for the arbitration and mediation services sector could damage UK businesses. The Sunday Express reported that the European Council has issued a tender for the purchase of 9,000 bottles of fine wines this year, at an estimated cost to taxpayers of more than £111,000. The Times reports that the accounts of Defra and the Rural Payments Agency (RPA), which oversees the scheme, were not approved by the National Audit Office this year as a result of European Commission fines amounting to at least £175m from 2007, 2008 and 2009. Get ready for another rollercoaster ride: Eurozone timeline 2012 The draft euro fiscal pact: Pretty bad news for Cameron… Will the euro crack in 2012? It will be turbulent, but probably not Leading by example: Denmark will aim to make its rotating EU Presidency “one of the cheapest yet”Open Europe Europe
On Friday, Open Europe was the first in the UK to publish the most recent draft of the European pact on greater fiscal integration. The new version controversially envisages a greater role for the Commission and ECJ, and includes explicit references to the single market, competitiveness and ‘social cohesion’. This is despite comments last week from UK Prime Minister David Cameron that the new fiscal compact would not impact on the single market. However, Cameron insisted over the weekend that the agreement does not supersede existing EU Treaties, meaning the UK’s interest was protected.
Draft Fiscal Pact Saturday’s Telegraph Saturday’s Times FT Weekend Saturday's Mail Saturday's Express Sunday Express Independent on Sunday ExpressTimes: Wheeldon Times: Cochrane EUobserver Handelsblatt: Thibaut FT Conservative Home
David Cameron: EU-wide FTT is not sensible, I will block it
Following remarks by French President Nicolas Sarkozy’s special advisor Henri Guaino that “a decision on the taxation of financial transactions in France will be taken before the end of January” to “set the example” in Europe, a spokesman for the German government, Steffen Seibert, said, “Germany’s position remains unchanged…The aim is to introduce a financial transactions tax in the EU.”
Les Echos Les Echos 2 Le Monde Le Monde 2 La Tribune FAZ Spiegel EUobserver Independent Mail Telegraph European Voice CityAM Telegraph
Sunday Telegraph
German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet in Berlin today, with economic growth in the eurozone expected to be the focus of their discussion. The two will discuss proposals to boost growth, competitiveness and cross-border labour mobility in the eurozone. They will also try to iron out the remaining disagreements over the latest draft of the fiscal compact treaty, according to French officials. Süddeutsche Zeitung reports that due to her insistence on austerity and budgetary restraint, Merkel is becoming politically isolated, especially from France and Italy, the eurozone’s other biggest economies. The paper notes that Merkel “has no other choice” than to hope that Italian Prime Minister Mario Monti is successful in arresting the threat of an Italian default and that Sarkozy wins re-election, and as such she will have to compromise and make concessions on the sort of pro-growth measures favoured by Paris and Rome.
Irish Independent Les Echos Le Figaro El País FT 2 Irish Times CityAM CityAM 2 IHT Sunday Times EUobserver FT 3 FT 4 Le Monde WSJ El País 2 Corriere della Sera Independent on Sunday: Ben Chu Guardian: Elliott CityAM: Westgate FAZ: Issing FTD: Blum Repubblica FTD Süddeutsche
Telegraph
Politiken
Mail on Sunday
Le Figaro JDD
Independent on Sunday
Mail on Sunday
Sunday Express
TimesNew on the Open Europe blog
Open Europe blog
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Open Europe blog
Monday, 9 January 2012
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