Tag Archives: Janusz Lewandowski

EU Can’t Even Agree On Date For Top Leader Summit

This is looking more and more like the break-up of the euro zone. I know it’s difficult for the member states to agree on everything, and therefore they have to find compromises from case to case that not everybody is equally happy about. But when it comes to setting a date for an extraordinary important summit to discuss the increasingly  threatening economic and political situation, they should at least be able to agree on a date. But no. Because of the French-German economic plans that has been drafted without anyone else involved, other EU members are now protesting by refusing almost any decisions made by the administration in Brussels.

“All countries should participate in the discussion, and there should be no groups created leading other countries.”

Franco Frattini

Setting the date for the extraordinary March summit of euro zone leaders  is about to become impossible, as hostility grows amongst member states towards the fiercely conservative Franco-German proposal for economic convergence. The first top leaders summit since the 2008 crisis meeting, was originally set to March 13. But now the date is set to “floating.”

EU Council president Herman Van Rompuy have told MEPs and chiefs of the parliament’s political groups that the 17 premiers and presidents of the euro zone countries are to meet “mid-March”, ahead of the normal EU-27 spring summit on 24-25 March, the EUobserver reports.

Sunday  March 13  has been widely touted as the date of the euro zone meeting.

However, one EU diplomat says: “It’s a date that was floated, as it fits the schedule of President van Rompuy.”

There has been no official confirmation however.

Agence France Presse reports that one major member state has ruled out March 13 as “impossible,”  and favor March 11 instead.

The EU leaders was supposed to discuss a proposal from Berlin and Paris that would force European states to adopt a common corporate tax base, harmonize retirement ages, eliminate indexation of wages to inflation and hard-wire limits on government debt via constitutional amendments.

But as the March summit looms, opposition to the proposal is growing.

On Tuesday, Italian foreign minister Franco Frattini announced Rome’s dissatisfaction with both the ideas in the proposal and their source in the Paris-Berlin duo.

He said that it is premature to be discussion EU level tax harmonization and constitutional changes.

“There are issues in the pact that Europe is not ripe to solve yet, this includes for example harmonization of taxes and tax systems,” he said during a visit to Prague, Reuters reports.

“Taxes are probably one of the most sensitive issues. Frankly speaking, I believe it is premature to have even an agreement in principle on harmonizing taxation. All countries should participate in the discussion, and there should be no groups created leading other countries,” he added.

Luxembourg, Belgium, Austria and Spain have also expressed reservations about the proposed “competitiveness pact.”

“We will not allow our social model to be undone,” Belgian Prime Minister Yves Leterme says.

Luxembourg prime minister, Jean-Claude Juncker, (who is also the chairman of the Eurogroup of finance ministers), says he don’t think “abolishing the indexation of wages should improve the competitively of my country or of the euro area.”

EU budget commissioner, Poland’s Janusz Lewandowski, describes “nervousness” over the plans  in an interview with the UK newspaper The Times. Adding that developments are being watched with some nervousness in Warsaw and other capitals.  “We need a discussion on how to avoid a two-speed Europe,” he says.

Meanwhile, economics and monetary affairs commissioner Olli Rehn – one of the key architects of austerity plans imposed on Greece and Ireland in return for EU bailouts – offer his support to the Franco-German plan.

“The competitiveness pact is broadly in line with proposals in the growth survey,” he said at a meeting at the American Chamber of Commerce.

Acknowledging the criticism, French finance minister Christine Lagarde underlines that the rules for individual countries do not have to be identical.

“The Franco-German proposals have been debated and have given rise to some statements, sometimes to some reservations,” she says.

The goal is not to that everyone in every European Union country will have to retire at the age of 67, Ms. Lagarde points out.
“Nor are we going to, from one day to the next, fix as an ultimate objective for all the countries in the euro zone to agree on an average corporate tax rate of 25 percent,” she adds.

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Filed under International Econnomic Politics, Laws and Regulations, National Economic Politics

EU Budget Talks Collapse

A last attempt to reach an agreement for the 2011 EU budget failed Monday night, due to reluctance by member states to grant MEPs extra powers in future multi-annual budget negotiations. The EU commission will now have to draft a new proposal, while the first months of next year will be funded on the basis of the 2010 budget,

“There is no drama, the world won’t go under.”

EU diplomat

No Budget - No Drama

The final collapse was mainly due to disagreements over procedures and extra powers granted to MEPs under the Lisbon Treaty, the EU’s new rulebook, European media reports.

Jerzy Buzek

“It’s not good news not to have a budget for 2011, but we will follow procedures,” EU Parliament chief, Jerzy Buzek,  told reporters in a late-night press conference after talks with member states broke down, according to the EUobserver.com.

Junior ministers from Britain and the Netherlands insisted that the only issue on the table was the budget for 2011 and declined to discuss contentious issues for the long-term budgetary perspective, such as raising more EU “own resources” through supplementary taxes or the “flexibility” of the budget when unexpected expenses arise.

Shortly after announcing €95 billion in domestic budget cuts, Britain has demanded that next year’s EU budget stay frozen at the 2010 levels, or go up by a mere 2.9 percent, less than half of the original MEPs’ request.

Perverse Mechanism

“The Brits didn’t want to hear about ‘flexibility’ as they argued it could create a perverse mechanism by which governments are forced to pay more into the EU coffers,” one EU diplomat says.

Dutch officials were motivated both by similar spending cuts at home and a diplomatic defeat for the Netherlands when Albania and Bosnia were granted EU visa-freedom.

The Dutch EU affairs minister promised last week that budget talks will only relate to the 2011 figures and “nothing else.”

The chairman of the budget committee, French MEP Alain Lamassoure, lashed out at the national envoys, who had no mandate to negotiate anything else but the figure for next year and said that if they were not willing to discuss MEPs’ powers, he would “take it to the European Council in December.”

Bad Blood

For some diplomats, the strategy of the European Parliament was bound to fail, because it wrongly assumed that member states would agree to a budget out of fear of being labelled as “anti-European.”

“There will be a budget, based on 2010 figures. There is no drama, the world won’t go under,” one EU diplomat told the EUobserver.

However, EU budget commissioner Janusz Lewandowski is not of the same opinion.

During the lengthy hours of negotiations he reportedly warned member states that failure to reach an agreement will create “bad blood,” and even lead to higher borrowing costs for the euro zone’s most embattled economies in Ireland and Greece.

A last-ditch attempt by the Belgian EU presidency to separate figures from the “political agreement” on the MEPs’ powers was dismissed by the parliament’s negotiators as “completely unserious.”

The euro-deputies had previously indicated that they would back a 2.9 percent increase in the budget, as demanded by 12 member states led by Britain.

Anyway – now it’s back at square one; the EU commission will have to come up with a new draft budget, and another round of negotiations, at government leader level, are to take place in December.

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Filed under International Econnomic Politics, National Economic Politics