Daily Press Summary
New Open Europe report: Leaving the EU would raise more questions than answers
New Open Europe report: Leaving the EU would raise more questions than answers
Open Europe has published a new report today which outlines the potential alternatives to EU membership if the UK decided to the leave the EU altogether, and their implications for British economic and political interests.
While acknowledging that the cost of EU membership remains far too high, the EU continues, on a purely trade basis, to be the most beneficial arrangement for Britain. The alternatives often suggested – the Norwegian, Swiss and Turkish models – would all come with major economic drawbacks, not least for key UK industries such as car manufacturing and financial services, with the Norwegian model being particularly ill-suited for Britain.
However, the UK public is growing increasingly frustrated with the EU exactly at the same point as the eurozone is moving towards more integration. In order to justify continuing EU membership and avoid being driven by the electorate inexorably towards the exit door, Britain needs a new set of membership terms. This would involve the UK remaining a full member of the EU customs union and single market in goods and services – allowing it to remain at the heart of European cross-border trade - but substantially reducing the non-trade EU involvement and costs whenever possible, including bringing powers back to the UK.
The report was covered by the Guardian ahead of publication. Open Europe Director Mats Persson told the paper, “Given the growing public hostility to the EU and events in the eurozone, the status quo isn’t an option. Therefore it is in the UK’s interests to stay in the EU but renegotiate a new model for membership founded on a continued commitment to EU-wide trade but substantially less EU involvement in other areas”.
George Eustice, Conservative MP and leading member of the Fresh Start group quotes Open Europe’s report in a comment piece in today’s Guardian. He argues “We can do better than just leave the EU. With the right approach we could change it…We should argue for a new model for Europe where there is an inner core- the single market in goods and services that all member states sign up to because they benefit from it. Then there should be a broader sphere of policy areas…that are far more optional. This would allow the EU to adapt and give up powers where the rationale for taking decisions at the EU level has ended”.
Open Europe research Guardian: Eustice Guardian
Spain to seek up to €100bn in aid from the eurozone to recapitalise its banks;
Rajoy calls the plan a victory for the euro
Following a conference call between eurozone leaders, it was announced that Spain will be offered a loan through the EFSF or the ESM, the eurozone bailout funds, of up to €100bn in aid for its banks. Spanish Prime Minister Mariano Rajoy declared the decision a victory for the euro. The exact amount and details of the loan are yet to be finalised, as the eurozone waits for the results of the external bank stress tests conducted by Oliver Wyman and Roland Berger, which are expected to be released to the Spanish government over the next few days.
The conditions on the loan will not match those applied to the other bailed out countries, as they will focus on reforming the financial sector, rather than fiscal consolidation. EU Economics Commissioner Olli Rehn stressed that the funds would not be condition-free, as Spain will still have to stick to its pre-agreed stringent deficit cutting programme, while the Commission, the IMF and the ECB will decide how much money and reform the banking sector really needs. The money will be channelled through the FROB, the Spanish bank restructuring fund, which means that it will increase Spanish debt levels but not the country’s deficit. However, Joaquin Almunia, the Spanish EU Competition Commissioner, suggested that the interest on the loans (expected to be around 3% - 4%) would impact on the Spanish deficit and that conditions may be stricter than first imagined, reports ABC.
Meanwhile, Finnish Finance Minister Jutta Urpilainen said in a TV interview on Saturday, “It remains undecided whether the loan [to Spain] will be granted via the [EFSF, the eurozone’s] temporary facility, in which case Finland will require collateral.” The Dutch Finance Ministry said yesterday that the Dutch parliament will have to approve the country’s participation in the Spanish bailout.The Independent reports that the Irish government is not going to seek a revision of its own bailout terms. Jornal de Negócios reports that Portuguese Prime Minister Pedro Passos Coelho told the press yesterday, “There’s no reason for Portugal to ask for new conditions.”
European stock markets and the euro responded positively to the news this morning. An Emnid poll for Bild am Sonntag found that 66% of German respondents are opposed to supporting Spanish banks with German taxpayers’ money, compared to only 31% in favour. A Metroscopia opinion poll published on Sunday in the newspaper El País showed that 78% of Spaniards had “little or no” confidence in Rajoy, although the leader of the opposition fared even worse. Open Europe’s blog analysing the Spanish rescue plan is cited by the Telegraph and National Review Online.
Open Europe blog Open Europe research FT CityAM CityAM 2 WSJ WSJ 2 Guardian Guardian 2 Le Monde Les Echos Les Echos 2 EUobserver 2 Sunday Times Independent on Sunday Le Figaro Saturday’s El País Saturday’s El País 2 Saturday’s Expansión FT Weekend Saturday’s Telegraph Saturday’s Guardian Saturday’s Times Saturday’s Independent Saturday’s Sun Saturday’s Express IHT Independent FT 2 WSJ 3 Irish Times Guardian Times Le Monde 2 Le Monde 3 Les Echos 3 La Tribune BBC EUobserver EurActiv FT 3 CityAM 3 Irish Independent Telegraph FT 4 FT 5 WSJ 4 Bild am Sonntag Reuters Bloomberg City AM 4 Times Independent Jornal de Negócios Il Sole 24 Ore Irish Times Irish Times 2 FT WSJ City AM City AM 2 City AM 3 Les Echos Les Echos 2 El País El País 2 El País 3 El Mundo Expansión Telegraph FT Editorial FT: Munchau FT Lex CityAM: Heath WSJ Review & Outlook WSJ: Heise Irish Times: O’Brien Guardian Guardian: Emmott
George Osborne: UK recovery “is being killed off by the crisis on our doorstep”
Writing in the Sunday Telegraph Chancellor George Osborne says that the UK economy is being “killed off” by the eurozone crisis. He goes on to say that while “banking union is a natural extension of a single currency… we are clear that Britain will not take part.”
In the Mail on Sunday, James Forsyth writes that senior figures are “arguing that David Cameron should use this autumn’s party conference season to announce he will hold a referendum on Europe.” Today’s Times also quotes former Conservative Defence Secretary Liam Fox as saying “clearly, if there were treaty changes, that would have to be put to a referendum”.
Mats Persson told the Saturday’s Times that “The Conservative leadership should be wary of trying to achieve too many political objectives at once, calling for fiscal union in the eurozone at the same time as hinting at vetoes or holding a referendum if such a union materialises risks creating political problems down the road, both at home and abroad”. Separately, a Populus poll for the Times records that 80% of respondents would like a referendum on the EU.
Sunday Telegraph: Osborne Sunday Telegraph Guardian Guardian 2 Telegraph Le Monde Mail Mail 2 Times Saturday’s Times Saturday’s Mail: Heffer Saturday’s Telegraph: Moore Independent: Sieghart Mail on Sunday: Forsyth Sunday Express: Buchanan Observer: Stewart Independent on Sunday: Rentoul Sunday Telegraph: Leader
Pasok lays groundwork for a national unity government in Greece
Kathimerini reports that PASOK leader Evangelos Venizelos has sent a letter to the leaders of New Democracy, SYRIZA, Democratic Left and the Independent Greeks laying out plans for the formation of a national unity government, if the upcoming elections fail to yield a clear winner. Venizelos also called for the parties to push for a renegotiation of the bailout agreement, including delaying fiscal consolidation by three years.
Les Echos Kathimerini Kathimerini 2 Kathimerini 3 Saturday’s Guardian Saturday’s Independent Saturday’s Times La Tribune Times
Spiegel reveals details of planned fiscal union, including partial pooling of new debt
Der Spiegel reports that the heads of the EU institutions and the ECB are working on a comprehensive blueprint for fiscal union which will limit members’ powers to issue new debt. If any state wants to issue more debt than it can cover from its own revenue, it will have to have it signed off by other eurozone finance ministers who will then issue common euro-denominated bonds to finance this debt.
Spiegel Bloomberg CNBC Le Monde
Poland could save €489m a year from reform of the EU budget
Open Europe’s recent briefing on reforming the EU budget, which recommended reducing spending by almost 30%, while focusing the spending far more effectively on boosting jobs and growth, was covered in detail by Polish daily Rzeczpospolita. Open Europe’s Pawel Swidlicki was quoted as saying “While the EU budget could be a useful tool for boosting jobs and growth and reducing wealth disparities across Europe, it is currently a hostage to vested political interests ranging from the EU institutions, individual member states and other external groups. The current crisis could not offer a better incentive to take the budget apart and to keep and increase funding for what works well [such as research and development], and to cut or reform the areas that are wasteful and inefficient.”
Socialist majority predicted in French legislative elections
French President Francois Hollande’s Socialist party was victorious in the first round of the legislative elections on Sunday, winning more than 46% of the vote, ahead of the centre-right UMP party on 34%. The Socialist party is expected to win an absolute majority in the second round held on Sunday. Foreign Minister Laurent Fabius welcomed the result on TF1 as a “sign that voters appreciate our measures”. Le Monde reports that the election was marked by high levels of abstention at 40% and tactical voting, as support for far-left parties shifted to Socialist candidates. Far-right Front National party won 13.6% of the vote, as leader Marine Le Pen and her 22-year old niece Marion Marechal Le Pen received over 35% of their constituencies’ vote.
BBC European Voice Irish Independent Times Le Monde Le Monde 2 Le Monde 3 Les Echos IHT Independent Le Figaro FT CityAM Times 2 Les Echos 2 FAZ Welt Spiegel
Compromise between German government and opposition on FTT and fiscal treaty looks in doubt
Ronald Pofalla, Chancellor Merkel’s chief of staff, was yesterday quoted by Der Spiegel as saying that the financial transaction tax would not be passed in the current legislative period.
Meanwhile German Finance Minister Wolfgang Schäuble will today discuss the fiscal treaty with ministers from Germany's 16 federal states, many of whom have expressed concerns at how the treaty’s debt brake will affect their spending. Die Welt reports that Jan Stöß, the new chairman of the Berlin branch of the SPD, strongly criticised the treaty in his inaugural speech.
Spiegel Welt Welt 2 Welt 3 Reuters Handelsblatt
The WSJ reports that the European Commission is developing legislation to distinguish between different Internet “cookie” files. Websites using files which track users’ Internet use will be required to seek consent under the new data-privacy recommendations.
Airline companies from around the world united in calling on the European Commission to ensure a global agreement could be reached over proposals to force companies to join the EU’s carbon trading scheme. The International Air Transport Association warned that the EU’s proposals risked degenerating into a trade war.