18 January 2016

Several EU states consider adopting UK’s reforms on migrants’ access to benefits

The Financial Times reports that a number of other countries – including Austria, Denmark, France, Germany and the Netherlands – are considering whether to introduce a variant of the UK’s reform of limiting access to in-work benefits for EU migrants. The move is seen as an encouraging sign that the UK and the EU will find agreement on this issue. A number of the countries are considering the move to counter their own populist parties. Austrian Foreign Minister Sebastian Kurz said that, while changes to EU legislation must be a first step, “If treaty change is also needed in order to make the EU fit for the 21st century and closer to its citizens, then I am of the opinion we should not shy away from going this way”.

Speaking to Bloomberg TV, Deputy German Finance Minister Jens Spahn said, “I think Mr. Cameron raises some relevant questions and makes some right proposals especially when it comes to immigration into the social welfare systems.” He added the Government’s initial proposal “doesn’t work from our perspective,” but added he sees readiness to “find a common solution on this because we don’t want social welfare migration within the European Union — that’s a common point.”

A ComRes poll for the Independent on Sunday found that 84% of voters back the UK’s push to make sure that EU migrants should pay taxes for four years before claiming in-work benefits such as tax credits. The poll also found that 49% support free movement of workers in the EU compared to 29% who opposed it.

Saturday’s Sun reported on a behind the scenes row between the Prime Minister and Home Secretary Theresa May who has reportedly opposed a residency-based test and instead wants EU migrants to have a contribution record before gaining access. Meanwhile, the Sunday Times reported that the government could also secure an ‘emergency brake’ on EU migration to Britain which would allow the government to block new arrivals if public services become overwhelmed.

Source: The Financial Times Bloomberg The Sun The Independent on Sunday The Sunday Times

Cameron preparing legislation to make it "even clearer to people that our Parliament is sovereign"

Appearing on BBC Radio 4’s Today Programme, the Prime Minister said he is “very suspicious of Brussels” as he said there was a “good case” for new measures to make it “even clearer to people that our Parliament is sovereign.” The Sunday Times reported that, once the negotiations about a new settlement for the UK with fellow EU leaders are complete, Cameron will reveal he is changing domestic law to make clear that Parliament is sovereign and Britain’s courts are not bound by the EU Charter of Fundamental Rights. Saturday’s Sun reported that he is delaying his flagship overhaul of human rights legislation with a new Bill of Rights in order to make maximum impact in the EU referendum campaign.

Meanwhile, a Mail on Sunday poll showed a lead for Leave, with 42% in favour of Brexit, 38% for Remain and 20% yet to make up their mind. A total of 43% say Leave supporters could change their mind come referendum day; only 28% say Remain supporters are expected to do so. Leave was on 40% and Remain on 38% in a separate poll by ComRes for The Independent on Sunday.

Writing in The Sunday Telegraph, Nick Herbert MP, who will lead a new group, Conservatives for Reform in Europe, argued that “Leaving without the first idea of what we might get instead would be to jump into a void.” Herbert was formerly Chief Executive of the Business for Sterling campaign. Lord Lawson, the former Chancellor, said yesterday that the Leave campaign would be led by a current UK cabinet minister, though exactly who would only be revealed “in due course”. The Mail on Sunday reported that Justice Secretary Michael Gove, long considered a leading Eurosceptic, has decided to support Cameron’s campaign.

The official Labour Leave campaign is also due to launch this week. Labour Leave co-chair Kate Hoey wrote in The Mail on Sunday that Labour leader Jeremy Corbyn “is determined to democratise the Labour Party, and allow rank-and-file members to have their say… if this new-found internal democracy is good enough for Trident, it is surely good enough for the EU.”

Source: The Sunday Times The Sunday Telegraph The Times The Sunday Telegraph: Herbert The Observer: Morgan The Mail on Sunday The Financial Times The Sun

Austria suspends Schengen agreement as Schäuble suggests EU petrol-tax to fund refugee crisis response

Austria became the latest EU country to “temporarily suspend” the open-border Schengen agreement on Saturday, as Chancellor Werner Faymann warned that the crisis threatens the European project as a whole. “Anyone who arrives at our borders is subject to control,” he said, with Austrian authorities confirming that more than 3,000 migrants arriving under false identities have already been sent back from the border since the start of the year.

Meanwhile, German Finance Minister Wolfgang Schäuble suggested over the weekend that all EU states should help shoulder the costs of the refugee crisis through a petrol tax, saying, “We now have to secure Schengen’s external border. This should not fail because of a lack of funds.” Most EU countries, apart from Greece, have rejected the proposal, with a spokesperson from the French Finance Ministry commenting, “The issue of taxes is very delicate.” The latest ZDF-Politikbarometer shows that 56% of Germans now think that German Chancellor Angel Merkel’s refugee policies are ‘bad’: a jump of 7% since December last year. Edmund Stoiber, the former leader of Merkel’s sister party in Bavaria – the CSU – told Süddeutsche Zeitung that, “Merkel must change her position now. Otherwise there will be disastrous consequences for Germany and Europe.”

German Justice Minister Heiko Maas has written to all of the country’s regional justice ministers in a letter seen by Spiegel Online, inviting them to an “emergency summit” on the rise of right-wing extremism in Berlin on March 10. The meeting will seek to address the sudden increase in vigilante groups and violence against refugees in the last year. Separately, Czech President Milos Zeman has claimed that, “It is practically impossible to integrate Muslims into Western Europe,” blaming  the Cologne sex-attacks on “Muslim culture.”

Source: Politico Reuters Deutschland Spiegel Online Reuters Deutschland 2 Handelsblatt Bild The Daily Mail

New European Parliament report finds half of EU’s £23bn EU aid budget has not been used properly

Senior MEPs in charge of auditing EU spending have revealed that £11.5bn of EU development aid has been delayed or been wasted. The report for the European parliament’s budget control committee highlights that the misappropriation of funds, bad management, and corruption have all contributed to EU aid failing to achieve its objectives. The report highlights that “Every second euro spent by the EU (on development aid) does not achieve what it pays for”. Ingeborg Gräßle, chair of the committee that drafted the report, said that “Hundreds of thousands of people flee to Europe from countries where we keep spending billions without any apparent effect… we need an urgent revision of spending, independent scrutiny and a clear procedure to actually measure what we are achieving.”

Source: The Sunday Times

S&P downgrades Poland’s credit rating over erosion of independence of public institutions

Standard and Poor’s downgraded Poland’s credit rating on Friday from AA- to BBB+ citing concerns that “Poland’s new government has initiated various legislative measures that we consider weaken the independence and effectiveness of key institutions”. S&P also warned that “there is potential for further erosion of the independence, credibility, and effectiveness of key institutions, especially the National Bank of Poland.”

Writing in The Financial Times today ahead of his visit to Brussels, Polish President Andrzej Duda argues that “in the past few weeks Poland has seen a series of anti-government protests. Like any well-functioning democracy, we believe that all the participants have the right to vent their anger openly… Democracy and free media in Poland are not endangered in the least.” He also adds that “We are and will remain pro-European. Poland wishes to maintain a friendly and fruitful relationship with all our partners in Europe. This is particularly true of Germany, given our proximity and our recent history of successful political and economic co-operation. We would also like to play a more active role in solving the EU’s most troubling problems.”

Asked in an interview with Rzeczpospolita, about the European Commission’s decision to initiate a probe into the rule of law in Poland, Law and Justice leader Jarosław Kaczyński argued that “there is absolutely no cause for concern, we need to continue on our path and we cannot give in to pressure. Poland is a sovereign state.”

Source: Standard and Poor’s Reuters The Financial Times: Duda Rzeczpospolita

61% of Spanish voters want to see a government formed while only 33% favour fresh elections

A new Metroscopia poll found that 61% of Spanish voters would rather see political parties strike a deal to form a government compared to 33% who want re-run elections. The latest polls suggest the result would be little different in new elections with no party gaining a clear majority. 58% said they would like to see a minority government led by the party with the most votes which would then have to “negotiate all its decisions with other parties.” 40% supported a deal between Partido Popular and Ciudadanos or a three way alliance between those two and the Socialist party.

Source: El Pais Metroscopia

Fund management industry concerned over potential extension of bankers’ bonus cap

The investment industry has begun lobbying to ensure that the EU’s bankers’ bonus cap is not extended into the fund management industry. Guidelines released by the European Banking Authority last month suggested that any firm which falls under the Capital Requirements Directive could have to introduce the cap from 2017. This could catch large fund management firms such as Blackrock.

Source: The Financial Times

Dutch referendum campaigners threaten legal action over EU-Ukraine Association Agreement

Writing in De Volkskrant, Thierry Baudet and Erik de Vlieger, two of the leading figures in the campaign for a referendum on the EU-Ukraine Association Agreement in the Netherlands, threaten that they will take legal action against the Dutch government unless it ceases implementation of the agreement which formally came into force on January 1st. The Dutch referendum, which will take place on April 6th ,will not be binding on the government.

Source: Volkskrant: Baudet and de Vlieger

Greece signs deal on tax evasion with German state

The Greek government has signed a deal with the German state of North Rhine-Westphalia to help fight tax evasion in Greece, partly by training Greek officials but also via data sharing. Kathimerini reports that EU officials have warned that the politicisation of public sector institutions could harm the bailout review.

Source: Kathimerini Kathimerini 2

Commission highlights potential anti-trust cases on firms’ use of big data

EU Competition Commissioner Margrethe Vestager has said, “If a company’s use of data is so bad for competition that it outweighs the benefits, we may have to step in to restore a level playing field,” hinting that cases in this area could be brought forward in the future.

Source: The Wall Street Journal

Trade associations warn of “enormous” consequences if US and EU fail to reach deal on data transfers

In a letter to US President Barack Obama, the European Commission and all 28 EU governments, the  U.S. Chamber of Commerce, BusinessEurope, DigitalEurope and the Information Technology Industry Council warn of “enormous” consequences if the US and EU fail to reach a deal on data sharing and transfer by the end of this month. They also ask for a transitional period for businesses to adapt to the new rules.

Source: Reuters

ECB questions banks over bad loans

The ECB has sent a questionnaire to European banks to gather more information on their non-performing loans, as it steps up its efforts to tackle the large stock of bad loans banks are holding.

Source: Reuters

Plans to meet EU energy targets could see rise in petrol costs

Saturday’s Daily Telegraph reported that families could have to pay an extra £40 a year to fill up their cars as Ministers have disclosed that they are drawing up new proposals to meet an EU requirement that 10% of transport energy must come from renewable sources by 2020.

Source: The Daily Telegraph

#EUWargames: Watch live EU Reform and Brexit negotiations with Europe’s top politicians

On January 25th 2016, Open Europe will bring together two former Prime Ministers, nine former ministers and one former European Commissioner to simulate EU Reform and Brexit negotiations in our #EUWargames. With each player taking the role of a country and having operated at the highest level of politics, this is the closest anyone can get to being inside the negotiating room. We are today featuring the player representing Ireland.

John Bruton
John Bruton is the former Taoiseach of Ireland (Prime Minister).While Prime Minister, he helped transform the Irish economy into one of the fastest growing economies in the world. He presided over a successful Irish EU Presidency in 1996, and helped finalise the Stability and Growth Pact, which governs the management of the single European currency, the euro. He was also deeply involved in the Northern Irish Peace Process which led to the 1998 Good Friday Agreement.

Before being appointed EU Ambassador to the United States, John Bruton served as a leading member of the Convention that drafted the proposed European Constitution, which was signed in Rome on October 29, 2004. He strongly supported proposals to give the general public a more direct say in the choice of EU leadership by allowing the public of the EU Member States to directly elect the President of the European Commission.

Tickets for this event are sold out but it will be livestreamed on our website here from 9AM on January 25th 2016. Follow live #EUwargames.

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