Bulletins

Open Europe bulletin: 30 March 2007

• “Mercantilist” EU to push ahead with trade agenda for developing world
• Open Europe poll: 75% of Europeans want a referendum on any new treaty which gives more powers to the EU
• EU celebrates 50^th birthday – timetable for new Constitution by 2009
• News in brief
• Daily European press summary
• Open Europe in the news

“Mercantilist” EU to push ahead with trade agenda for developing world

Trade experts call on EU to drop the threat of higher tariffs against developing countries

By the end of this year the EU is due to replace its preferential trade arrangements with African, Caribbean and Pacific Countries (ACP) with bilateral Economic Partnership Agreements ( EPAs ). For the first time, developing countries will be given a fixed timetable to drop their barriers to imports from the EU. They are being asked to eliminate 80% of their trade barriers against the EU over the next decade.

The EU argues that EPAs are essential for promoting developing countries’ integration in the modern global economy. However, some ACP ministers are worried that they will be compelled to liberalise trade in goods and services too much, too fast, the main risk being the effect of rapidly opening up trade to the EU.   There are fears that ACP exporters will not significantly increase their exports to the EU, while European exporters largely increase their shares on the ACP markets, meaning that ACP countries will undergo major trade imbalances, drops in industrial output and job losses.   Some are also concerned that the EPAs will break apart attempts to bring down trade barriers between groups of developing countries – particularly in Africa.

Negotiations are currently stalled in several of the negotiations, and despite Trade Commissioner Peter Mandelson’s apparent optimism that agreement can be reached, many ACP representatives are far more sceptical, criticising what they see as inflexibility on the part of the EU. They are also concerned that should the deadline for agreement lapse, exports to the EU will face much higher tariffs, and some of their exports will become unviable.

On 26 March, Open Europe held a seminar on EPAs , bringing together leading economists and negotiators to discuss the way forwards.

Francis Mangeni , Regional Trade Policy Advisor for the Commission of the African Union, said that the European Commission is not recognizing the very real concerns of ACP governments over EPAs .   He quoted the Gabonese Trade Minister: “no politician can sacrifice his people for the sake of meeting a deadline”. He said that there were many outstanding issues, with wide divergences of positions amongst negotiating parties, and questioned the basis for the EU’s apparent optimism that a workable deal can be settled by the end of 2007. He recommended an extension of the negotiation timeframe, emphasising the importance of predictability and stability for businesspeople in Africa.

Chris Stevens from the Overseas Development Institute argued that the EU Commission had drastically raised the stakes in negotiations with developing countries, by explicitly threatening them with higher tariffs if they did not sign EPAs by the assigned end-2007 deadline (he said the EU’s computers had already been programmed with higher tariff rates to be activated in January 2008).  He suggested that in reality it was already too late to complete well negotiated, balanced EPAs , and said that it was very uncertain that the deals would help regional integration.  Stevens cited ODI research showing that if the deadline lapsed, and African countries became subject to new tariffs, some exports would collapse – in the case of Kenya, this would happen to 57% of product lines (he suggested that products such as African canned pineapple could “become a collector’s item” in the EU).   He asked pointedly whether the EU would now take the threat of higher tariffs off the table.

Peter Thompson, the EU Commission’s Director in charge of EPAs expressed optimism that negotiations could be concluded by the end of the year. He summarised the Commission’s motives for pursuing EPAs by arguing that “Now, the motivation - for us…it’s that the EU believes in the EU. So we do believe in regional integration… We tend to believe in it. Now, foolishly we therefore go around the world to places like the Gulf, and Mercosur , and now to ACP regions, and say ‘Well, you know, this has been the model that worked for us’.”

Efforts to reach agreement with countries in southern Africa are deadlocked because other countries in the region (particularly Botswana, Namibia, Lesotho and Swaziland) want South Africa to be part of their agreement, but the EU will not accept this, because it does not want to reduce tariffs against South Africa.   However, Thompson said that while the UK wanted South Africa to be treated equally, other member states would not allow this, for “mercantilist” reasons.

He said, “Here we’re talking about political expediency. What do I mean by that? South Africa is in a different basket from all other ACP countries. It’s in a different basket because it’s seen as a competitive economy. Perhaps not as competitive as Germany, but it is nevertheless one where we have mercantilist glasses on rather than, purely ‘what can we do to help?’ In other words, the agenda is not entirely development-driven.”  

He said that EU trade policy towards South Africa always needed to be “working to this defensive interest in the European Union. Some, primarily the UK, want Europe to see South Africa treated in exactly the same way as all the other trading partners in the area. And fair enough. Unfortunately, not all the member states within the EU feel that way.”

In answer to Chris Stevens’ question, Thompson defended the EU’s warning of higher tariffs if agreement was not reached in time, saying it would be a “very strange signal” to send to WTO partners if the EU was to “go back” on international commitments. He concluded that “We’ve got the political commitment…Frankly, at this stage, I’m not giving up, and therefore I’m not spending my life thinking about alternatives.”

The EU appears determined to push African countries into Economic Partnership Agreements - despite a wealth of evidence that the deals are not the best way forward for developing countries and may well be actively damaging.

While developing countries should open up their trade, EPAs are not the way to do it.   Imposing a timetable from outside is likely to cause political turmoil and undermine support for free trade; the bilateral nature of the EPAs is likely to cause huge trade diversion;   EPAs are likely to benefit rather than challenge vested interest in developing countries; and threaten to tear apart existing efforts at regional integration – particularly in Africa.

The Commission is clearly motivated by a desire to impose the EU model of regional integration in other contexts, like sub-Saharan Africa, regardless of how appropriate it is. The serious concerns of ACP governments continue to be brushed aside by the EU, which insists that compliance with WTO rules – stating that agreement must be reached by the end of 2007 – is paramount.   This respect for ‘fair play’ apparently does not feature in the EU’s self-professed “mercantilist” approach towards countries such as South Africa, where policy is governed instead by “political expediency”.

For a full report on the seminar, with speakers’ presentations, click on the link below:

http://www.openeurope.org.uk/events/

To view Open Europe’s working paper on EPAs , click on the link below:

www.openeurope.org.uk/research/epaswp.pdf

Open Europe poll: 75% of Europeans want a referendum on any new treaty which gives more powers to the EU

A TNS poll for Open Europe, the first independent survey on the future of the European Union to be carried out in all 27 EU member states, has revealed that three in four Europeans want a referendum on any new EU treaty that gives more power to the EU. In the UK, 83% want a vote to be held.  

If a referendum were held, majorities would vote “no” in 16 EU countries, including Germany.   UK voters would vote by more than three to one against such a new treaty. The country most opposed to a treaty handing more powers to the EU is Sweden, where 78% would vote no.

Across the EU as a whole, 28% think the EU should have more powers than it has now and that more decisions should be taken at the European level. 23% think the EU should keep the powers it has now, but should not be given any more. However, 41% think the EU should have less powers than it has now and that more decisions should be taken at a national or local level. In the UK the equivalent figures were 11%, 27%, and 58% - a clear majority for taking powers back.

The Berlin Declaration, delivered on 25 March to coincide with the EU’s 50^th anniversary, cited the euro as one of the great achievements of the EU.   However, a majority of citizens in the eurozone want to go back to their old national currencies: 47% wanted to keep the euro, but 49% wanted to go back to their old currency. There is majority support for keeping the euro in only 6 out of the 13 euro member countries.    Of the non- eurozone member states 11 out of the 14 would vote not to join the euro: only Romania, Denmark and Malta would vote to join. Opposition to euro membership in the UK is at its highest ever: 77% – 19% against.

Looking at how the EU should change, across the EU as a whole, voters’ top priorities were to establish clear fixed limits on the powers of the EU, and to reduce the EU’s trade barriers against developing countries. Their lowest priorities are the creation of an EU foreign minister, further enlargement and CAP reform.   In the UK, the voters’ top priority is to “turn the EU into just a simple free trade area, without political aims”. Their bottom priority would be the creation of an EU foreign minister.

The poll suggests a disconnect between Europeans and the EU. A majority of 56% of European voters feel that “the European Union does not represent ordinary people in our country”. Only 34% disagreed. In the UK the figures were 68% - 27%.

A breakdown of the full results for every country is available at:

http://www.openeurope.org.uk/research/mainfindings.pdf

EU celebrates 50^th birthday – timetable for new Constitution by 2009

On 24 and 25 March EU leaders gathered in Berlin to celebrate 50 years since the signing of the Treaty of Rome which set up the European Economic Community.   The city played host to a street festival, a concert as well as an all-night “rave” in 35 different night clubs which is said to have cost European taxpayers over £1 million.

Some members of the Open Europe team made the trip to Berlin to take part in a conference and present the findings of our poll to an audience of EU reformers and democracy campaigners.   On 25 March poster vans demanding that EU leaders should not ignore the 372 million Europeans who want a referendum on a new EU treaty circled Berlin, and we gathered with others for a press conference near the Brandenburg Gate.

For pictures of the event and the Berlin celebrations:

http://www.openeurope.org.uk/media-centre/article.aspx?newsid=1836

At the official event the German Presidency unveiled the symbolic Berlin Declaration which was intended to mirror the 1955 Messina Declaration that kick-started the process of European integration half a century ago.   The idea behind the document was to get EU leaders to reaffirm “Europe’s values” and commit to bringing back the EU Constitution.

The declaration did not mention the word Constitution, but committed leaders to agree on “a renewed common basis” for the EU before the European Parliament elections in 2009.   Tony Blair made it clear that this was thinly veiled code for discussions to bring back a new EU Constitution.   He said, “There is no doubt the EU needs to change its rules to make it more effective because it is now a Europe of 27 not 15. I think the sooner it is resolved the better, because we need these new rules for Europe.”

EU officials are briefing that the timetable which has been decided on is particularly significant, as it will give the talks momentum and a sense of inevitability.   In June EU leaders will agree on a new mandate for an Inter-Governmental Conference which will run throughout the Portuguese Presidency of the EU and will conclude in December 2007.   Member states will then be given 18 months to ratify the new treaty.   One official told the Times, "The euro is an example of the importance of establishing timetables. Once you have the timetable, you can really get moving". (26 March)

Downing Street has already stressed that its sole aim for the negotiations will be to make sure that any new treaty does not rise above the “referendum threshold”.   The Government will argue that a referendum will only be necessary if the treaty gives the EU new powers and will argue that the creation of an EU Foreign Minister and an EU President will not do that.

Margaret Beckett told The Politics Show that she hoped the new text would not trigger a referendum.  “We would certainly hope that it would be possible to get, if we can get agreement and common ground, that that could be in an area where it wouldn’t need to trigger a referendum here.” She added that “I’ve no doubt, by the way, that no matter what it says, if there’s any agreement at all, there will be people who will call for a referendum anyway, but since they’re all people who never had a referendum when they had the opportunity, I think we can rise above that.” 

News in brief

Three Italians charged in another EU fraud scandal.   Three Italians, a Commission functionary, an MEP’s assistant and a property dealer were charged this week by magistrates investigating Mafia links to contracts for the security, leasing and refurbishment of European Commission delegations around the world.   The arrests were made during 40 dawn raids carried out in four countries, and the alleged fraud involved offices as far afield as Albania and India. According to the Brussels Prosecutor’s Office spokesman, Jos Colpin , “We are talking about contracts worth tens of millions of euros, over a period of more than ten years. So, even a bribe of ten per cent works out at millions of euros. This is a major corruption case.”   It came to light when a Finnish businessman complained that he was asked for a bribe in order to win a bid.   ( Times , Le Figaro , Agence Europe, 29 March).

The new arrests come after a series of scandals and resignations in Brussels over the last three months:

§          January, two special advisors to the Commission are forced to resign, including Dina Akkelidou , who was appointed advisor on health, despite a previous conviction for obstructing the course of justice.

§          February, Rolf Linkohr , a power company lobbyist who advised Andris Piebalgs , the energy commissioner, had his contract terminated for failing to declare that he had a conflict of interest. Commissioner Piebalgs claimed he had no idea that he was on the board of two power companies.

§          March, Franco Frattini was forced to cancel the contract of one of his 11 Italian advisors after his office was raided by police as part of an investigation by the Italian police for his role in the embezzlement of €200m of public funds. According to Agence Europe there are also conflict of interest suspicions about one of EU Commissioner Louis Michel’s advisors.   ( FT , 9 March, Agence Europe, 13 March)

EU Working Time Directive ends holidays for the disabled.   According to the Sunday Telegraph the EU Working Time Directive will effectively make it impossible for seriously disabled and terminally ill people to go on holiday when changes are introduced next month.   From then on, carers will have to take a minimum of 11 hours' "uninterrupted rest" every day to conform with the directive. On-call time spent sleeping is not classed as rest, so carers will have to clock off after 13 hours.   Care firms have said that they would need to double the amount of carers sent on holiday with clients in order to comply with the directive, which is just not feasible. Dominic Webb, a tetraplegic on constant ventilation said, “This new legislation will devastate my care team as it will not allow them to perform 'sleeper duty' as they do now.   I feel that my human rights in being able to effectively live in the community have been infringed. If something is not done about this ridiculous European bureaucracy, many people will be faced with the possibility of returning to care institutions. Living in the community is tough enough without these ludicrous hurdles." ( Sunday Telegraph , 17 March)

Minister criticised for ignoring Parliament on EU prisoner law.   Home Office Minister Joan Ryan was this week criticised by the House of Commons European Scrutiny Committee for agreeing a new EU law on prisoner transfers without giving the British Parliament opportunity to debate it, thereby overriding the Committee’s ‘scrutiny reserve’ on the measure.   Conservative MP Bill Cash argued that it could now be the case that a British national might be sentenced abroad, imprisoned and transferred to Britain to serve a sentence for something that is not a crime in this country.   According to Simon Carr in the Independent, Ryan’s “defence was that no agreement had been reached even while ministers were trumpeting that agreement had been reached. ‘That's agreement in the normal usage of the word, not the political usage of the word,’ she explained.” ( BBC Independent Open Europe blog , 29 March)

FT poll: 44% of Europeans think life is worse since joining the EU; Commission blames “nostalgia and insecurity”.   According to a Harris poll published in the FT last week, 44% of EU citizens think life has got worse since joining the bloc, while 25% think it has got better. There were wide national variations: 52% of Britons said things had got worse, whilst 53% of Spaniards believed things had got better. However, with the exception of the UK, all countries believed that life would get worse if their country were to leave the EU. 41% of Britons said life would get better if the UK left the EU, while 25% thought it would get worse.    36% of respondents believed that the effects of EU regulation on business had been negative, as against 18% who saw positive effects. France was the only country where EU regulations were seen as having a positive effect. Along with the Single Market, bureaucracy is the feature most Europeans associate with the EU. The European Commission subsequently rejected the results of the poll; a spokesman said, “You cannot convince me that lives for people are worse than in 1957 or 1973… It is nostalgia. People like to think life was better in the past. There are feelings of insecurity." ( Telegraph 20 March, ( FT 19 March)

Merkel calls for a “European army”.   Ahead of the Berlin Declaration last week, German Chancellor Angela Merkel called for an EU army.   She told a German newspaper, “We must move closer to a European army… The European Commission would become more capable of acting, within clearly defined competencies.” According to the FT/Harris poll mentioned above, Europeans narrowly oppose the formation of a European army, with 39% against the idea, and 38% in favour. ( Die Welt Sueddeutsche FAZ   23 March, Times 24 March)

EU climate change goals will cost €1.1 trillion.   Consulting firm McKinsey has calculated that in order for the EU to meet its ambitious 20% carbon emissions reduction targets by 2020, which were agreed last month, the bloc will collectively have to pay around €1.1 trillion.   The report says "on the basis of a balanced, sensible application of the most easily accessible technology...the EU states will face annual costs of between €60 to €80 billion up until 2020 ."   According to McKinsey's study, it will be easier and cheaper to start with reducing energy use, using methods such as insulating buildings, rather than rushing into far more costly solutions such as building CO2-free coal power stations.   ( Guardian EUobserver Reuters 28 March)

Luxembourg PM: single market and euro “have only ever been tools” for political integration.   In an article in Le Figaro last week Luxembourg Prime Minister Jean-Claude Juncker said, “We would be wrong to limit European construction to simple economic integration.  The market and currency issues, useful and beneficial as they are in everyday life, have only ever been means, tools in the realisation of a larger objective.”  He said, “European construction remains above all a peace project… People often tell me that this message is no longer important, that peace in Europe does not depend on structures like the European Union …[ but] one only has to look at the ease with which we fall back into national arguments, accusations even, to realise that the potential of conflict, which drove Europe so often into adversity, is far from having disappeared.” (19 March)

Daily European press summary

Each morning Open Europe produces a summary of all the top stories from leading newspapers across Europe.   Our team of researchers and linguists search through the press from the UK, Belgium, France, Germany, Italy, Poland, Spain, the Netherlands and Scandinavia for the latest news on the European Union.   If you would like to sign up for the service please register on our homepage :

http://www.openeurope.org.uk/

Open Europe in the news

Open Europe aims to bring the failures of the current EU to the attention of a wider and wider audience.    We are now appearing in the press and broadcast media several times a week. For a full summary of Open Europe’s media coverage, go to:

http://www.openeurope.org.uk/media-centre/press-coverage.aspx

Further comment and analysis can be found on our blog .

Race crime rises as immigration hits record levels

Mail 28 March

The Scottish Daily Mail reported that there has been a large increase in racial attacks on EU migrants. It quoted Open Europe’s Paul Stephenson saying “These new figures are appalling.   If we're going to have good community relations, we need much more effort to integrate new arrivals and also to give people who are here already a sense that migration is being handled in a sensitive and controlled way. So far, the whole issue has been mishandled and these figures are one of the shocking results.”

EU effusion 'lost in translation'

BBC 28 March

The BBC reported that “Sharp-eyed professors have spotted what they say is evidence of ‘political translation’ of the EU's Berlin Declaration”, evidenced by subtle, but important, differences in the German, English and Danish versions of the text. Instead of saying that the EU member states are united in "happiness" (as in the German version), the latter two versions say that they have united "for the better", or "for the best". Open Europe’s Mats Persson was quoted as saying “It is quite common that people use the maximum room available to accommodate shades of meaning. The Swedish version also reads quite awkwardly. The Berlin Declaration is a reflection of a political compromise and this is reflected in the translations."

EU’s environmental failures

Conservative Home 28 March

On Conservative Home Open Europe Director Neil O’Brien looked at how the UK Government is attempting to use the environment as a “convenient excuse” to transfer more power to the EU. He argued that despite the fine sounding rhetoric, “serious environmentalists should be very sceptical about the EU indeed”. He looks at how the Emissions Trading Scheme, the CAP, the CFP and the Landfill Directive have all been environmental failures and argues that instead the EU should be investing in new technology which could be exported around the globe.

Between a rock and a hard place

Telegraph 27 March

In an interview with the Telegraph Catherine Day – the most senior civil servant in the EU Commission – dismissed findings from our recent poll of 1,000 British chief executives. 

EU poll coverage

BBC online Telegraph Independent  Express  Scotsman  Washington Post  Newsroom Finland  Times of Malta  L’Express Libération   Focus News Bulgaria  L’Expansion Svenska Dagbladet Swedish Television Swedish Radio TV4 Helsingin Sanomat MTV3 Yle Danish TV2 Danish TV2 Danish Radio Jyllands-Posten Berlingske Politiken   UPI Rzeczpospolita Bankier Naszemiasto Gazeta Wyborcza Jurnalo La Tribune Le Nouvel Observateur Pravo Romania Libera Telegraf Telesurtv De Telegraaf RTL 24, 25, 26 and 27 March

Our poll of all 27 member states was featured on the BBC Six O’Clock News, Ten O’Clock News and on Newsnight .  Paul Stephenson appeared on Radio 4’s PM and Neil O’Brien spoke on 5 Live.  The poll was also featured in the Independent, Telegraph, and Daily Mail. 

There was widespread coverage across the continental European media, including articles in French dailies L’Express and Libération , and French business radio BFM.  Paul appeared on Danish TV and the poll was featured on Swedish national news as well as Sweden and Norway’s largest dailies Svenska Dagbladet and Aftenposten .  A joint event in Berlin was featured on the main German news channel Sat 1, Spanish Telesur tv and it was used on Dutch TV channel RTL as well as by Dutch daily De Telegraaf .  In Poland it was reported by Rzeczpospolita and Gazeta Wyborcza and it was picked up by the large Czech daily Pravo .  Romania Libera and the Telegraf also both covered the story.

Swedish government warned about over-interference from the EU

Sydsvenska Dagbladet 25 March

Open Europe’s Mats Persson had an op-ed in Swedish daily Sydsvenska Dagbladet , responding to an article by Swedish EU Minister Cecilia Malmström . Mats argued that “if Malmström truly wants the Swedish people to go along with the idea of Europe, she would do well to pursue a policy which clearly identifies what Brussels should not do. Silly and arbitrary laws only undermine the legitimacy of the entire EU project.”

Blair secret EU president plan

Sunday Express 25 March

The Sunday Express reported on Tony Blair’s plans to back the creation of a permanent EU president. Open Europe Director Neil O'Brien was quoted as saying: "It is very hard to see how the president would be accountable to the people. As for who could do it, Tony Blair would be an obvious candidate."

Moore : EU must become reversible

Telegraph 24 March

In the Telegraph, Charles Moore noted that “The pressure group Open Europe produces a useful daily digest of the main media stories about the European Union, both in Britain and on the Continent.” He reproduced a selection of stories from our summaries showing the drift towards integration.

Investors plough into farm handouts

Sunday Times Aberdeen Press and Journal Farmers Guardian 17, 18, 23 March

The Sunday Times reported that “City investors have been exploiting an EU loophole that allows nonfarmers to claim agricultural subsidies in the hope of landing huge profits... Open Europe, which discovered the loophole, paid £562.82 for a Scottish subsidy entitlement for 1.5 hectares worth £306 a year.”

Cost of Single Market regulation

BBC Five Live 23 March

Open Europe board member Stuart Wheeler appeared on BBC Radio Five, arguing that the costs of the Single Market – with regulation costing European business €600bn a year – are outweighing the benefits.  He argued that the UK’s EU membership presently costs £40bn a year, the equivalent of £3,000 per family, per year.

Why life is worse since we joined the EU

Sun Mail 20 March

A poll found that 52% of British people think life has got worse since the UK joined the EU.   Open Europe Director Neil O'Brien is quoted as saying: “Officials in Brussels shouldn't be surprised that most people now feel they would be better off outside the EU. The EU has meddled and interfered far too much. 'Worst of all, the EU has shown total contempt for democracy. Again and again people all across Europe have voted against giving more powers to the EU. But the unelected officials who run the EU have just ignored the voters.”

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