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Wednesday 27 April 2011
On April 29, between 3pm and 4.30pm, Open Europe’s Director Mats Persson will participate in a panel discussion in Washington DC, hosted by the Heritage Foundation. The topic will be “Debts and Deficits: Warnings and Lessons from Europe for the Next U.S. President”. The discussion can be viewed online via this link:
Dutch Europe Minister: European aid must focus more on poverty
In a letter to the Dutch Parliament Ben Knapen, Dutch Europe Minister, cites Open Europe’s research criticising the disbursement of EU aid. In the letter he suggests that he largely agrees with Open Europe’s findings, arguing that the EU should focus more on poverty reduction and that richer countries, such as Turkey, should not receive so much money. The Dutch Parliament will hold an emergency meeting today to discuss the nature of EU aid.
France and Italy call for watering down of Schengen Treaty
French President Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi yesterday asked the EU to make changes to the Schengen agreement which would strengthen the role of member countries in policing their borders, reports Euractiv. "We want Schengen to survive, but to survive Schengen must be reformed," said Sarkozy. In a joint letter, the two leaders criticise current governance of the Schengen space and call on the EU to "examine the possibility of restoring temporary control at internal borders in the event of exceptional difficulties in the management of common borders". The leaders also call for the EU’s border agency Frontex to "broaden its operating capacity" with increased funding, reports WSJ.
WSJ EurActiv European Voice EUobserver Le Monde Le Figaro BBC Coulisses de Bruxelles Straneuropa Il Sole 24 Ore Irish Times El PaisTelegraph: Hannan RPOnline Deutschlandfunk El Pais: editorial El Pais 2 Independent IHT Independent: Poirier Guardian
Ten economic lessons from Europe for the next US President
In a briefing note published for the Heritage Foundation, in tandem with the Heritage Foundation’s Sally McNamara and J.D. Foster, Open Europe Director Mats Persson argues that there are numerous lessons which the next US President could learn from the eurozone sovereign debt crisis. The three argue that the “primary lesson from the eurozone sovereign debt crisis is that running large deficits and accumulating debt with no indication of changing will always translate into higher interest payments and likely higher interest rates, meaning more tax revenue will be consumed just paying for past fiscal sins.” They also note that central banks could "become part of the problem" if they continue to prop up insolvent banks and governments, while also highlighting the fact that the EU will have to tackle the underlying banking problem sooner or later.
EU member states and the US have circulated a draft UN Security Council press statement on Syria calling for the imposition of sanctions. The Guardian quotes Nicolas Sarkozy clarifying the move saying, "We are not going to intervene everywhere in the world and not all situations are necessarily the same".
Higher than expected deficit figures cause spike in Greece's and Portugal's borrowing costs
Eurostat yesterday released its debt and deficit figures for EU countries in 2010. Both Greece and Portugal missed their targets, with a deficit of 10.5% of GDP and 9.1% of GDP respectively, while Ireland saw its deficit reach 32.4% of GDP (excluding the cost of the bank bailouts it is closer to 12%). The poor results for all three countries saw their two year borrowing costs reach record highs and caused the cost of insuring their sovereign debt to increase.
Brian Lenihan, former Irish Finance Minsiter, accused the ECB, during a BBC documentary on Sunday, of “bouncing” Ireland into the EU/IMF bailout last year. Lenihan's comments mirror remarks from former Justice Minister Dermot Ahern, while Portuguese banks have also claimed the ECB played a fundamental role in pushing Portugal into requesting a bailout. The ECB refused to comment on the issue, but ECB governing board member Jurgen Stark suggested Lenihan was in a “state of denial”, according to the Irish Independent.
FT FT 2 CityAM WSJ European Voice EUobserver Le Monde Guardian Zeit Telegraph El Pais Irish Telegraph BBC: Mason WSJ: Mattich Irish Times Irish Times 2 Irish Times 3 Irish Telegraph 2 WSJ: Rohac
Nicolas Sarkozy backs Mario Draghi to become next ECB President
Following an official endorsement from French president Nicolas Sarkozy yesterday, Italian Mario Draghi has moved a step closer towards securing the position as head of the European Central Bank after Jean-Claude Trichet retires in October. In the FT, former deputy director of the IMF’s policy development and review department Desmond Lachman argues that Mr. Draghi ought to focus on the ECB’s principal task of maintaining price stability in the eurozone, and “reverse Mr Trichet’s stealthy adoption of a second mandate: keeping the eurozone’s periphery afloat”.
A report by the Irish Economic and Social Research Institute (ESRI) think-tank has warned that EU plans to create a single electricity market could raise prices for Irish consumers.
Clarke warns ECHR judges
At yesterday’s Council of Europe meeting, discussing the future of the Strasbourg based European Court of Human Rights, Justice Minister Ken Clarke argued that ECHR judges were not allowing for “genuine differences of national approach” and were failing to give enough weight to domestic legal systems.
Germany faces big inflow of migrant workers
The FT reports that the Institute for the German Economy (IW) has estimated that the expiration of immigration conditions on workers from Central and Eastern Europe on 1 May, could cause a net inflow of 800,000 migrant workers to Germany from these areas over the next two years. IW’s Director, Michael Hüther,said that “it is the right step at the right time” as Germany is facing increasing skill shortages and an ageing workforce. Trade unions, however, are calling for urgent reforms to prevent “wage dumping” and unfair competition for low skilled German workers.
DieWelt reports that the EU Commission is planning a directive on building efficiency which would require homeowners and landlords to replace existing shower heads, taps and toilets with ones which have a reduced flow to save water. Die Weltcalculates that this would cost German homeowners €400 each, which would be a total of over €10billion for all homes in Germany.
Writing in the New Statesman Irwin Stelzer looks at ‘How Labour could wrong foot the coalition over the EU’
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