In the first of a series of interviews with EU policy experts and decision makers, Brian Simpson the Chairman of the European Parliament’s Transport and Tourism Committee exchanges with Grayling’s Kevin Doran on the Airports Package that is currently being reviewed at the Europoean Parliament.

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The latest Grayling BigPictureBrussels explains that:

  • Two mainstream parties in Greece managed to achieve a majority in the weekend’s elections and are likely to form a government of national unity to press ahead with the terms of the country’s bailout. A Greek default has however not been ruled out.
  • Earlier this month, the European Commission adopted its package on bank recovery and resolution with the aim of putting banks on a stronger footing to face down future crises.
  • German Chancellor Angela Merkel has made it abundantly clear that a banking union is impossible without first establishing a fiscal union – an idea resisted by France and Italy, not to mention the UK.
  • The Spanish bailout and the uncertainty in Greece have pulled the Eurozone closer to a banking union, and it remains to be seen whether it can be designed in a way that suits both the weaker and stronger economies and does not undermine the EU’s single market in financial services.

France and Germany do Battle over Eurobonds

My name is Bond, Euro Bond

  • EU leaders agree that Greece should remain in Eurozone – but stick to its bailout conditions.
  • New French President François Hollande not shying away from doing battle with Chancellor Merkel over Eurobonds – battles ahead!
  • Key decisions to come at June Summit on how to strengthen banks’ liquidity and on expanding fiscal and monetary union.
  • Mr Hollande’s confident performance likely to draw further support from other countries…to Germany’s cost.
For our full report, please read Grayling’s latest BigPictureBrussels

This articles comes fromt he Grayling Brussels Espresso May 2012 edition.

The Commission is proposing that Member States place a minimum tax of between one-tenth and one-hundredth of one

A new tax coming out the woods? (picture by courtesy of JeSaurai)

percent on a range of financial trades.

Although these proportions seem tiny, the sheer volume of trades that occur every day means that the Commission anticipates raising up to €57 billion in revenue from the move.

One Member State attempting to cash in on these high stakes is France. A one-time opponent of the tax, then President Sarkozy became its standard bearer, pressing ahead with a light French version of the tax when frustrated with the slow pace of progress in Brussels.

On the other side of the Channel, David Cameron has adopted a more pragmatic approach, insisting the tax is unworkable unless it is applied on a global scale, and expressing fears that the City of London would be hit disproportionately which would send investors packing.

Having already wielded his country’s veto on the fiscal compact, he has demonstrated his willingness to block proposals that he perceives as a threat to the UK’s interest.

Enhanced cooperation

With unanimity required for decisions on taxation and deep divisions within the Council, there is little hope of a speedy agreement. Nine Member States have already formally requested to be allowed to press ahead on their own, with the Lisbon Treaty’s Enhanced Cooperation procedure providing a framework for a core group of countries to do so.

The Commission is reluctant to go down this road, however, not least because they would then lose control of the proposal.

This may partly explain the recent push to advocate for the FTT on the basis of the cash savings that the tax would bring about for Member States contributing to the EU budget.

Earlier this month, EU Budget Commissioner Janusz Lewandowski claimed the measure could reduce by over €80 billion the direct contributions from Member States over the course of next 7-year budget cycle.

Promised land

Although there is little evidence that his arguments have gained much traction in key opposing Member States, if the Commission did manage to bring the naysayers around, it would not only score a major political victory on financial regulation, but also reach the promised land of generating independent “own resources”, of serious significant value, a goal it has held dear for decades.

However, an EU-wide, or even Eurozone-level, agreement seems optimistic. With negotiations on the next financial cycle due to conclude by the end of the year, time is not on the side of Barroso and his band of Commissioners in his attempt to emulate Robin Hood and his Merry Men.

Nigel

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Green is the colour...or is it?

Blessed with offices with a park-view, it has been hard not to notice the veritable explosion that has taken place over the last ten days: spring has finally come to Brussels!

What was grey and brown has once more become green.

And how fitting that greening is such a topical matter in Brussels at the moment.

In a rare display of harmony, Belgium and the European Union seem to keep the same pace with each other.

Unfortunately, the sun does not shine as radiantly on the policy side of things as on Brussels’ trees, quite the contrary; dark clouds are gathering on the horizon.

The first thing that springs to mind are the ongoing negotiations on the CAP reform in both Parliament and Council, where the Commission’s greening proposals have come to form a divide between MEPs and delegations.

While decision-makers in principle welcome the measures, opinions vary on the modalities and character of the Commission’s proposal.

After all, tying 30%of the Direct Payments to farmers for  greening measures was bound to cause a stir…

Speaking of stirs, the negotiations on the future EU budget finally seem to have hit a nerve for some Member States. Naturally, we are referring to last week’s GAC meeting ,during which delegations let off some steam concerning spending obligations.

Once again, the green was the main focus of discussions, although a different kind of green: several net-paying Member States demanded the budget be cut by €100 bn. Sometimes too much green makes you see red, says the Lobby.

Surely, the negotiations on the CAP and the budget will be lengthy (did I hear someone say delayed?) and keep on stirring emotions.

In the meantime we will keep enjoying the park view.

– Tobias

The newly elected European Parliament President Martin Schulz announced in an interview that he is going to try to “put the European Parliament in a confrontation with the heads of government.”

Is the Parliament going to float like a butterfly and sting like a bee? (photo courtest of Mark Pellegrini)

The reason behind this is that, in Mr Schulz’s view, the European Council is becoming more and more powerful, while the European Parliament’s role either “goes unappreciated or [is] stolen by the Member States”.

Clearly, this assessment can only be confirmed by people working in the “Eurobubble”.

When going back home, people seldom realise that the European Parliament is in fact a key institution and no longer a talking shop. Worse, only 43% of electors actually go and vote on election day.

This confirms one of the many shortcomings of the Lisbon Treaty: instead of truly democratising the EU, it actually gave more powers to the European Council by making it an official EU institution, which can de facto act as a sort of directoire.

Of course, one could say that governments are under control of their Parliaments back home, but in times when an increasing number of competences are being transferred to the EU, one would expect that the Parliament – which only focuses on EU issues – gets a louder voice and is appreciated as such by the general public.

In this regard, Martin Schulz’s initiative seems very positive.

Yet, the Lobby cannot help thinking that domestic politics may be the cause. By weakening the Council, the Parliament is weakening its de facto leadership, namely Ms Merkel –  something which the SPD, Mr Schulz’s home party, may try to exploit in the 2013 national elections.

It would be disappointing if this should be true, since this would show that even the European Parliament only sees itself as a means to fulfil domestic politics goals.

Yet, sometimes the ends do justify the means. Therefore, whatever its intentions, The Lobby hopes the European Parliament will experience some proper infighting, which at least will ensure the EU gets a little more democratic!

– Christian

Handling the Euro-crisis demonstrates the unity of the continent, but when it comes to open borders and immigration, European leaders show a different face.

No more queues and controls at the borders of European countries – Schengen makes it possible. For years, numerous holiday-makers and workers have been able to travel without barriers across the majority of the continent.Image

This week however French President Nicolas Sarkozy attacked this so-called “freedom of movement” by threatening that France will leave Schengen, should the Agreement not be renewed within a year after his possible re-election in May.

Sarkozy’s call is in line with other anti-immigration rhetoric used in national campaigns. However this current debate over border controls has been brewing for months and shows that Europe is threatening to fall back into old patterns.

We might recall a year ago, in the wake of the Arab Spring, that thousands of refugees fled to the Italian island of Lampedusa. The then Italian Prime Minister Silvio Berlusconi gave the refugees a six-month residence permit, which enabled them to travel freely throughout Europe.

This in turn made Sarkozy furious, and he decided to re-introduce controls on the Italian border.

Last year Denmark toyed with reintroducing permanent customs controls, and the Dutch are so worried that at the beginning of the year they established an automatic monitoring system at border crossings.

Finally, several EU Member States are still blocking Romania’s and Bulgaria’s entry into the Schengen area due to deficiencies in the judiciary and the fight against organised crime.

At the end of last year EU Justice Commissioner Cecilia Malmström announced that she wants to reform the Schengen Agreement, which she called “one of the most cherished achievements of the EU”.

The European Commission wants to put in place a more efficient and EU-based approach to Schengen cooperation, allowing Member States to independently introduce border controls only as long as the Commission agrees beforehand.

Many states consider these proposals as an attack on their sovereignty.

President-hopeful Sarkozy also blamed the bad “Eurocrats” for deciding over France’s sovereignty, while seeming to forget that the European Parliament together with the Council – including the French government – will first examine those upcoming proposals.

The debates show that the Schengen issue is one of the topics which are (ab-)used by politicians who like to stoke fears among their fellow citizens and blame over-technocratic Brussels.

One can only hope that the Schengen reform will take place in an atmosphere isolated from any populism and campaigning strategies and will result in an improved framework resistant to misapplication.

The Commission has yet to respond to Sarkozy’s statements, saying it does not comment on national campaigning.

However, in order to contradict populist claims and for the sake of explanations and communications – maybe there is a need for response.

-Thomas

It’s hardly news anymore when we hear about voter apathy and declining turnout for European elections. So how do we make people care about a ballot that is usually seen as little more than a halftime show between general elections?

One option is to make what’s at stake more important by, for example, not only electing MEPs but also the President of the European Commission.

It’s quite straightforward really.

If the main political parties agree to nominate candidates for the EU’s top job in advance of the elections, then those candidates can tour Europe, drumming up support in the Member States for their associated parties: a vote for CDU MEPs in Germany would be a vote for the centre-right candidate and a more market-friendly Commission for the next five years, while a vote for the UK’s Labour party would mean supporting a more social agenda for the EU executive.

Legally the mechanism exists: since the Lisbon Treaty entered into force, it is the European Parliament who “elects” the Commission President.

As one former Secretary General of the Parliament pointed out, the only reason why the idea was not implemented for the 2009 elections is that the Socialists could not agree on who to put forward (the EPP had agreed to back Barroso for a second term).

Since you can’t have an election with only one candidate (in the EU at least), the notion fell by the wayside.

Others have an even more ambitious plan to “Europeanise” EP elections.

Later this month the plenary will vote on a report authored by Andrew Duff (ALDE, UK) proposing to introduce a single, 25-seat, EU-wide constituency. The European parties would present their lists of candidates, and all voters from Berlin to Bucharest would be able to vote for their preferred party.

The 25 seats would then be divided proportionately on the basis of one citizen, one vote. As these lists would be made up of candidates from across the EU, there could be no insular, parochial policy platforms.

What’s the point of changing the system you might ask?

While many of us in the Brussels bubble might be used to working on European solutions to the problems we face, for most people the primary, or even the only, point of reference is national.

If the current crisis has taught us anything, it is that national solutions are simply no longer enough. We need to find ways for European parties to reach across borders and help build a European consciousness.

If in 2014 voters are asked to choose between competing visions for the Commission, or vote for a “Europarty” instead of just our national parties, the ballot paper will for the first time be asking a truly European question.

However we are left with one tantalising question: will voters respond with European answers?

– Nigel

This morning we wake up to news that – finally – Eurozone finance ministers have agreed to bail out Greece for the second time to the tune of €130 billion.

How much longer will this be flying over Athens?

The “aid”, as it is referred to (making Greece sound like a third world country) is conditional on the European Commission having a presence on the ground to oversee that this money is spent in the right way and is not frittered away or mismanaged.

Greece was the first of three Eurozone countries to receive a bailout and is the first to receive two. Lucky them. But throwing money at problems rarely makes them go away, and it remains to be seen:

a)      whether this €130 billion is enough to shore up Greece’s finance for the long-term, bearing in mind that 2011 saw the country’s economy shrink by 7%. To be clear – this is not a recession, this is a depression.

b)      Whether the Greek electorate will tolerate being told what to do by outside officials, be they from the Commission or another Eurozone country. History teaches us that, in the wake of depression, the political world can get shaken up, and parties from both sides of the political spectrum gain ground. There could be trouble ahead.

c)       Whether and to what extent the northern Eurozone population will tolerate granting hand-outs to their southern neighbours with little in return.

There are other fundamental questions too, notably the precedent this sets for the Eurozone and the EU at large.

If, as seems probable, the Eurozone will continue to shore up ailing economies for the foreseeable future, to what extent will this lead the Eurozone into full fiscal coordination, with budgets not just approved in Brussels but also drawn up.

This would seem to be in the Euro’s long-term interest, but where does this leave national governments and the notion of democratic representation?

And where does it leave non-Eurozone countries in the EU? Why on earth would they want such strict oversight and, indeed, governance of their budgets, when they are not even in the same currency?

Finally – and striking at the very core of the EU – why would the non-Eurozone countries decide to stay in a currency bloc which seems condemned to bail out Member States who have been shown to be persistently unreliable and irresponsible bedfellows?

The end of the affair? Why, this is just the beginning.

– Rob

The latest BigPictureBrussels from Grayling looks at the political priorities of the Danish Presidency of the EU and the likely impact Denmark will make during its 6 month term. Denmark takes on the Presidency of the European Union at a time of crisis and uncertainty. Only days after the highly-charged and bad-tempered Summit in Brussels, the Danish Government unveiled its list of priorities for the Presidency. Amid signs of the inter-governmental agreement on fiscal co-ordination and budgetary surveillance unravelling, Denmark is prioritising the Eurozone with the aim of keeping the show on the road. Read More

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