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Downing Street studying various legal means of securing EU reform in 2017; New Fresh Start and Open Europe report: Strategies for fundamental EU reform

15 Dec 2014

The FT reports that, if re-elected, David Cameron is hoping to finalise his EU negotiations in the ‘sweet spot’ of summer 2017, between the French and German elections. The paper reports that Downing Street accepts that at least some of the negotiation may have to be secured in a ‘UK-only’ agreement or protocol, possibly signed at a summit in June 2017, to be added to the EU treaties at a later date. The model reportedly being studied in the Foreign Office is the Edinburgh agreement of 1992, which offered Denmark a series of ‘opt-outs’ from the Maastricht treaty that had been rejected in a referendum a few months earlier. An EU official is quoted as saying, “When there is will and grip from the top – and here I mean Germany – [treaty change] can be done pretty swiftly and driven through with force.”

The paper cites a report by the Fresh Start Group of Conservative MPs and Open Europe, published today, which sets out various options for securing reform via treaty change but also other means. The report finds that while a limited number of reforms can only be achieved via treaty change, others, including rewriting the EU rules on migrants’ access to welfare, increasing national parliaments’ say over decision making, and boosting EU trade, could be achieved through other means.
FT FT 2 Fresh Start and Open Europe: strategies for reform

Volkskrant: Timmermans has blocked 62 of 64 EU energy proposals for 2015
De Volkskrant reports that European Commission Vice-President Frans Timmermans, who is responsible for Better Regulation, has blocked 62 of 64 proposals for 2015 of EU Energy Commissioner Miguel Arias Cañete. The newspaper nicknames Timmermans ‘Dr No’, noting that he was successful in removing 80 proposals from the total of 415 for next year alone. However, the paper notes that two-thirds of the proposals scrapped were redundant because the problem had already been addressed, while 25 more proposals were removed because the Commission thinks no agreement is likely between member states.

Miliband to say Labour will introduce new law to stop firms undercutting local pay with migrants
The BBC reports that Labour leader Ed Miliband will today give a speech on immigration in which he is expected to put forward plans for a new law which would help stop firms exploiting legal loopholes to employ foreign workers on lower wages than their British counterparts. Meanwhile, the Sun reports that an opinion survey by OnePoll, which will be released tonight in an ITV programme on Europe, shows that six in ten adults want David Cameron to cap migration from the EU.

Separately, on Friday, European Commission President Jean-Claude Juncker warned David Cameron not to discriminate against EU citizens in his bid to restrict access to in-work benefits. However, he added, “We did not shoot down these ideas right away because I believe that we have to talk about them.”
Open Europe research Saturday’s Guardian Telegraph Telegraph 2 Sun 

European Commission under scrutiny over EU aid to ‘ghost civil servants’ in Ghana
The Sunday Times reported that millions of pounds in EU and UK aid have been paid to “ghost workers” in Ghana. Tens, possibly hundreds, of thousands of fictitious state employees were kept on Ghana’s public payroll, which is partly financed by the EU and Britain. Ingeborg Grässle, a German MEP, criticised the European Commission for failing to inform the European Parliament of the affair. Open Europe’s Pawel Swidlicki was quoted as saying the case demonstrated that “pursuing development policies via direct budget contributions is a risky strategy – even in a comparatively well-governed state like Ghana.”
Sunday Times

Polls show narrowing of gap between New Democracy and SYRIZA as Greek election looms
A new opinion poll by Kapa Research published in To Vima yesterday put SYRIZA on 25.5% and the governing New Democracy on 22.7%, a narrower gap compared to last month. The poll also found that 58% of Greeks want the parliament to elect a new President in order to avoid snap elections being held. Two separate polls also showed similar results. The two parties traded barbs over the weekend, with Greek Prime Minister and New Democracy leader Antonis Samaras saying that the recent market concern around Greece is justified and is down to SYRIZA’s policies. SYRIZA responded by saying Samaras is “begging” for the markets to punish Greece.

Die Welt’s Brussels correspondent Florian Eder argues that “Greece is delivering what Italy and France are failing to do – the repair of their budgets. If [the Greeks] do not lose their nerve in the final straight, they could save Europe.”
WSJ Kathimerini Sunday Times Sunday Times 2 Kathimerini 2 Kathimerini 3 Bloomberg Welt: Eder

EU Trade Commissioner Cecilia Malmström writes in Le Figaro, “French exports currently give employment to some 2.6 million French. More specifically, 390,000 jobs depend on French exports to the US. In the future, it will be even more – since TTIP [the EU-US free trade deal currently being negotiated] would lead to a 10% increase in France’s total exports.”
No link

Reduction in fighting raises hopes for peace agreement in Ukraine
The IMF has announced that it will send officials back to Ukraine in early 2015, although it has not confirmed whether this means that the next tranche of bailout funds, desperately needed by Ukraine, will not be paid out until then. Meanwhile, Ukraine confirmed on Friday that no Ukrainian soldiers had been killed or wounded overnight – the first time in seven months since the conflict began. Separately, UK Defence Secretary Michael Fallon has warned Russia that it risks bringing down a passenger plane by accident by ordering its military aircraft to secretly fly into UK airspace.
WSJ WSJ 2 Mail

Bild reports that EU Transport Commissioner Violeta Bulc has written to German Transport Minister Alexander Dobrindt warning that his plans to give German motorists a rebate on the planned new road levy amounts to “indirect discrimination” against other EU nationals and is therefore unlikely to be compatible with EU law.

According to a poll by the Europeans United for Democracy (EUD) group, 49% of Lithuanians disagree with their government’s decision to adopt the euro – compared to only 26% who agree with it. Lithuania is set to join the single currency on 1 January 2015.
EUobserver EUD press release

Reuters reports that ECB President Mario Draghi will at this week’s European Council summit put pressure on EU leaders to agree to wide-ranging economic reforms and warn that, if they don’t, any monetary policy push he unveils could be blunted. Separately, almost 90% of economists in a Bloomberg survey said they believe the ECB will buy sovereign bonds next year.
FT Reuters Bloomberg

Speaking of the European Commission’s flagship €315bn investment programme, Commission Vice-President Jyrki Katainen told the FT, “This plan will not change everything. But it will make a permanent positive change if we manage to implement everything efficiently.”

EurActiv reports that the EU has given Poland more than €100m to build at least three airports in places where there are not enough passengers to keep those airports in business.

Research by the think tank Reform has found that the UK Government has scrapped £1.2bn worth of regulation since 2010, while adding an extra £4.3bn. However, the analysis concludes that, if EU regulations had been counted from 2010, the total burden on business would be much higher. The study also argues that the Government’s claim to have reduced the cost to business by £1.5bn ignores the cost of EU regulation and regulations linked to financial systemic risk.


The FT reports that the UN’s Lima climate change summit has managed to approve guidelines for how countries will set out their plans to cut greenhouse gas emissions in the lead-up to the Paris agreement.

Italian Finance Minister Pier Carlo Padoan told Le Monde, “Nowadays, it is more difficult to agree on how to use our [economic] tools in a coherent way and how to find new ones to get out of the [Eurozone] crisis. The risk of witnessing the birth of a ‘lost generation’ is real.”
Le Monde: Padoan

A group of investors, mostly hedge funds, which lost money on the restructuring plan of Portuguese lender Banco Espírito Santo have launched a legal challenge against the European Commission’s decision to approve the plan – suggesting that it goes against state aid rules and that the assumption that private capital could not have been raised to help the bank is incorrect.

On Friday, Fitch downgraded France’s sovereign credit rating by one notch to AA – citing concerns over the country’s ability to stick to the deficit reduction targets agreed with the European Commission.
France 24 Le Figaro

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