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A review of Open Europe’s 2012

21 Dec 2012

2012 has been an important and very successful year for Open Europe, with Prospect Magazine judging us “International Affairs” think-tank of the year in recognition of our research and analysis’ increasing influence in the UK, Europe and beyond. Perhaps the icing on the cake, in October this year, was the launch of a new independent partner organisation in Germany, Open Europe Berlin gGmbh.

We have hosted prominent figures from the world of politics, economics and business in our 2012 events programme, discussing a range of topics from the UK’s future role in Europe, Anglo-German relations to the finer points of the eurozone crisis.

Open Europe remains a small, lean operation which relies entirely on individual donations. We would therefore like to thank everyone who has helped make 2012 such a successful year. If you support our work and would like to help us continue to do it, please click here to find out how you can donate. Below are some of the highlights from 2012.

Setting out a new UK relationship with the EU

In 2012, many of Open Europe’s research publications and ideas have had a direct influence on policy and decision making regarding the UK’s relationship with the EU.

Our approach was set out by Open Europe Chairman Rodney Leach in an article for the Times, in which he argued in favour of a new, flexible model for EU integration in which the UK would remain a full member of the single market and the customs union, thus maintaining its vote on Europe’s trading rules, while at the same time, limiting Brussels’ involvement in other areas better governed by national governments. Open Europe’s Mats Persson also argued in the Telegraph in favour of such an approach. This model has since been backed by a range of senior figures. In December, London Mayor Boris Johnson also called for a "pared down" UK-EU relationship focused mainly on the single market.

Our work with the All Party Parliamentary Group on EU reform – informing a group of over 100 MPs, for which we act as the secretariat and provide research, was set up, preceding the Coalition’s “balance of competencies review”, to assess the impact of a number of EU policy areas and the options for reforming/negotiating a new relationship for the UK.

Highlights of our work with a direct impact on policy this year include:

The EU crime and policing opt-out: In January, Open Europe published a pioneering report arguing that the Coalition should use a one-off opportunity to bring 135 EU laws on crime and policing, including the European Arrest Warrant, back under UK control and engage in a full and democratic debate about the UK’s future cooperation in this area. 102 Conservative MPs backed the recommendation, describing it as a “pragmatic alternative”. In October, Home Secretary Theresa May announced that the Government was “minded” to exercise the block opt-out.

A “double majority” principle to counter eurozone caucusing: In a December 2011 report, Open Europe was first in setting out the concept of “double majority” voting for financial regulation – designed to avoid the 17 eurozone members writing the rules for all 27 EU countries. In an October report, we applied this principle to the plans for Banking Union. A double majority rule was central to the UK’s subsequent negotiating position in talks on EU banking union and, in December, EU finance ministers agreed to introduce the double majority principle in the European Banking Authority, thereby helping to protect the interests of non-euro countries and the integrity of the single market.

Focusing EU regional spending on poorer EU member states: In January, Open Europe published its ground-breaking report on EU regional policy, recommending limiting this support to less wealthy EU member states, which would save the UK around £4bn over the EU’s seven year budget period. The report’s recommendations were endorsed by 17 Labour MPs, including former Cabinet members Jack Straw and Bob Ainsworth in a letter to the Guardian. In November, the Sunday Telegraph reported that David Cameron would use EU budget talks to argue for limiting the EU’s structural funds to the poorest member states.

Targeting EU overseas aid at the poorest countries: In a 2011 report, we highlighted that only 46% of EU aid reached lower income countries, and argued for a refocusing of the aid. In October this year, Justine Greening, International Development Secretary, pledged to lobby her counterparts to prioritise spending on poor countries and not “countries higher up the income scale.”

Cutting EU waste, salaries and agencies: In May, we published ‘Seizing the Moment’, a line-by-line breakdown of EU spending, which proposed a range of specific cuts to EU institutional and administrative spending.  In November, David Cameron insisted on cutting back EU administrative spending, and it has been revealed that the EU Commission is considering merging or closing some of its quangos.

Meanwhile, Open Europe was invited to provide oral evidence to a number of parliamentary inquiries – both in the Commons and Lords – into a range of EU policy areas including overseas aid, mobility and migration and regional policy, the proposals for a banking union, the latest developments in the eurozone, the UK Government's EU policy, and the EU’s diplomatic service.

“International Affairs” think-tank of the year

Open Europe’s research and analysis, including via Twitter (@OpenEurope) and the Open Europe blog, has increasingly won recognition in Europe and further afield. For all our media appearances throughout the year, check the ‘In the News’ section of our website.

The Prospect Magazine jury cited Open Europe's “astute recommendations” , highlighting our reports on the EU budget, the Common Agricultural Policy, a potential Greek euro exit and EU-UK trade, also noting that we have “produced steady, perceptive commentary on the eurozone”. UK Foreign Secretary William Hague congratulated Open Europe on the award, labelling it “well-deserved”.

In December, leading German newspaper Frankfurter Allgemeine Zeitung published a dedicated feature on Open Europe, noting that we influence the debate about the UK in Europe “like no other think tank”, and enjoy a decisive impact on UK Government thinking. The article added that, although Open Europe has many leading business people on its long list of supporters, the “start-up charm and the international make-up of the team” is “positively surprising”.

Polish daily Rzeczpospolita described us as “an influential liberal think-tank”, Belgian magazine Knack selected Open Europe’s website as its ‘site of the day’, while a leader in Sweden’s main daily Dagens Nyheter,  lamented the “miserable form of secrecy” surrounding the negotiations over the EU fiscal treaty, and noted: “Thanks to the think-tank Open Europe, which has obtained and published the drafts of the treaty on its website, journalists and other interested people have still been given access to the documents.”

A go-to source on the economics and politics of the eurozone crisis

Barron's – a leading US financial magazine – selected Open Europe’s twitter feed as one of five that “consistently provide great information and trenchant analysis” on the eurozone crisis.

It is always dangerous to make predictions about the eurozone, but here’s how we fared in 2012:

In April, Open Europe’s Head of Economic Research Raoul Ruparel argued in a briefing that Spanish “banks may be forced to tap the eurozone bailout fund” and highlighted that the build-up of debt by Spain’s regions would mean that they too could require bailouts.  In June, Spain announced that it would request €100bn from the eurozone’s bailout funds to recapitalise its banks, while in July, several Spanish regions requested bailouts from the state which sent sovereign borrowing costs to record highs.

In March, Open Europe predicted that, coming in at just 2% of GDP, the debt write-down of Greek debt under the country’s second bailout would be “far too small to allow Greece any chance of recovery”, with further assistance required in the future. In July, it became apparent that the second bailout had failed and in October, Greece received a two-year extension to its bailout programme, duly confirmed in late November. However, when others put the risk of Greece imminently leaving the euro at 80%, Open Europe’s Mats Persson argued in January 2012 that “I doubt eurozone leaders will have the nerve to force Greece out this year.”

In January, we predicted that “France could well be downgraded at least one notch…this would [also] hit the creditworthiness of the euro bailout funds”. On January 16, S&P downgraded France’s triple A rating, with Moody’s following suit on November 19, and on November 30 it also downgraded the eurozone’s two bailout funds.

In March, Open Europe’s Vincenzo Scarpetta warned of the risk that Mario Monti’s lack of a popular mandate could undermine his efforts to reform Italy’s labour market. With Monti set to step down in the coming months, the OECD has recently highlighted that Italy has undertaken limited labour market reforms, with its labour costs now amongst the highest in the eurozone.

Catalan MEP Ramon Tremosa i Balcells described our analysis of the Catalan elections as “the best so far” while Antonello Guerrera, a journalist for Italian daily La Repubblica, labelled our commentary of Italian politics leading up to Mario Monti’s resignation “the best summary” he’d seen.

Other Open Europe eurozone publication highlights include: Can struggling eurozone countries achieve the necessary ‘internal devaluation’– and at what political cost?; Not so bullish now? The short term prospects for Spain inside the euro; Better off out? The short-term options for Greece inside and outside of the euro.

Open Europe Berlin: a think-tank to provide new thinking about Europe

October witnessed the launch of our new independent German partner organisation Open Europe Berlin gGmbH, following several months of intensive, behind the scenes preparation. Open Europe Berlin is headed by Prof. Dr. Michael Wohlgemuth, who is assisted by Nora Hesse. Open Europe Berlin’s distinguished advisory board includes Claus Tigges, the President of the Bundesbank in Berlin, Leszek Balcerowicz, the former chairman of the National Bank of Poland and former Deputy Prime Minister, and Karen Horn, previously of the Frankfurter Allgemeine Zeitung.

Delivering his keynote speech at the Berlin launch, former ECB Chief Economist Ottmar Issing said that: “A think tank contributing fresh thinking on Europe is sorely needed and deserves support”, while Prof. Dr. Michael Wohlgemuth called for a Europe “of citizens, not of debt or bureaucrats”, with “a democratically controllable decentralised arrangement within a clear rules based system”. 

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