October 18, 2010

Press Summary Archive

New Open Europe briefing: The EU's Galileo satellite project could cost UK taxpayers £2.6 billion more than originally planned

18 October 2010

Open Europe has published a new briefing showing that the cost to European taxpayers of developing and running the EU's Galileo satellite project for 20 years has gone from €2.6 billion under the original estimates (from 2000) to €22.2 billion, according to recently leaked information. Meanwhile, the UK's contribution towards the cost of completing and running the project has gone from £385 million, under the original estimates, to £2.95 billion, under the revised figures. In other words, the bill for British taxpayers has increased by £2.6 billion compared to the original budget.  Originally, Galileo was to due be finished by 2008 and chiefly financed by the private sector. But the private investors pulled out, citing a lack of commercial prospects for the project. Consequently, Galileo became completely taxpayer-funded and is now not expected to be up and running until 2017/2018.

News of the World reported the findings in the briefing and quoted Open Europe’s Mats Persson saying, “The government must resist calls to hand over even more taxpayers’ cash until it’s clear that this ludicrously expensive project will actually generate some benefits.”
Open Europe press release Open Europe research

Commission expected to table proposals for EU tax tomorrow
AFP reports that the Commission is expected to table proposals for an EU tax tomorrow in its review of the EU budget. On his Economist blog, Charlemagne argues that, instead of proposing EU taxes, “If the EU really wants to be kind to the taxpayer it might do better to find ways of spending less money. One need not be a veteran of the EU bubble to spot some obvious savings: end the expensive practices of moving the ministerial caravans from Brussels to Luxembourg for three months a year, and of splitting the meetings of the European Parliament between Brussels and Strasbourg.”

On Conservative Home, Conservative MEP Martin Callanan writes that he and his colleagues are seeking to keep the EU 2011 budget down.
AFP  Conservative Home: Callanan El Mundo Sky News Economist: Charlemagne

Former EU Commissioner Bolkestein: “EU elites don't understand that the EU is doing too much”
In an essay in Dutch daily De Volkskrant, former European Commissioner Frits Bolkestein writes that the "EU is on the wrong track", arguing that “the European institutions have learned nothing from the thundering ‘Nos’ in the [French and Dutch] referendums. Current theory in Brussels is that they haven't explained their work enough. Europe's citizens don't understand what it is all about, according to the European elite. But they themselves don't understand that the EU is doing too much." On the problems with the euro, he comments, “The Achilles heel of the Monetary Union is that ‘one size fits all’ doesn't work between countries with different economic cultures. The dividing line inside Europe isn't between East and West, neither between centre and periphery, but between North and South. That problem isn't easy to solve".

He further laments Commission President Jose Manuel Barroso’s desire for more ‘economic coordination’. “Coordination of what?” he writes. “I'm afraid that means less competition. That would be a bad thing.”
Volkskrant: Bolkestein

The Telegraph reports that Britain will attempt to block the controversial maternity rights plan proposed by MEP, a move that will cost British businesses and the Government more than £2.5 billion a year. MEPs will vote on Wednesday.

Van Rompuy’s taskforce on economic government to hold final meeting today;
Trichet hits out at Bundesbank President in interview
The taskforce on economic governance chaired by European Council President Herman Van Rompuy will hold its final meeting this morning, presenting its final proposals at the next EU summit at the end of the month. The FT notes that France, Italy and Belgium are trying to water down Germany’s bid for quasi-automatic sanctions for countries breaking debt and deficit rules. Dutch Finance Minister Jan Kees de Jager is quoted saying: “Some countries are getting cold feet when they are presented with the possibility of real sanctions that actually bite and bite early.”

A draft report – seen by Handelsblatt – shows that the UK has voiced strong opposition to extending any such sanctions to non-eurozone countries in the future. The article also notes that Germany’s proposal for an “orderly insolvency procedure” for debt-laden eurozone countries is not even mentioned in the draft document. In a separate comment piece, Handelsblatt’s EU Editor Ruth Berschens argues that the proposals won’t amount to “anything other than a bunch of vague intentions.”

Meanwhile, in an interview with Italian daily La Stampa, ECB President Jean-Claude Trichet has hit out at Bundesbank President Axel Weber. Trichet said that “an overwhelming majority” within the ECB’s governing board is supportive of the current bond purchase policy criticised by Weber last week. In the FT Wolfgang Münchau questions whether Weber “really wants to succeed Trichet” as the next ECB President.

In an interview with Greek newspaper To Vima, Eurogroup Chairman Jean-Claude Juncker has said that eurozone governments had put pressure on the Greek government to fix its finances since 2008. “We didn’t make the issue public because at the time the Eurogroup was an informal organ […] But the Greek government knew that the Eurogroup was on the alert with regard to [Greece’s] financial situation,” he added.

On his Coulisses de Bruxelles blog, Jean Quatremer notes that the ongoing political crisis in Belgium is generating concern on the markets because of its potential impact on the country’s financial stability.    
WSJ: Stelzer Irish Independent FT FT: Munchau Reuters Coulisses de Bruxelles Le Figaro La Stampa Adnkronos Expansión El Pais Handelsblatt Handelsblatt: Berschens Les Echos Jornal de Negocios

Turkish President Abdullah Gül has said that the EU’s attitude to Turkish membership shows a “lack of vision”.
EUobserver Le Monde AFP

Government to pull out of Severn barrage plan to meet EU renewable targets
The Guardian reports that the Government is expected to refuse to back the controversial £21bn Severn barrage energy project with public finance, making the project unlikely to go ahead. The project was seen as a major part of the UK’s plan to meet its EU renewable energy targets. Steph Merry, Head of Marine Renewables at the Renewable Energy Association, is quoted saying, “You need something that is a large-scale project on the same scale as a power station in order to meet the renewables targets. The Severn barrage, or something similar, is the only way of achieving that.”

In the Sunday Telegraph, Christopher Booker argued that “Trying to meet our EU renewable energy target would cost more than we currently spend on our entire electricity production.”
Guardian FT Sunday Telegraph: Booker Open Europe research

The WSJ reports that talks on the EU’s AIFM Directive will take centre stage at this week’s meeting of EU finance ministers.
WSJ FT FT 2 Open Europe research

In what Handelsblatt describes as “a protectionist battle”, French Industry Minister Christian Estrosi has demanded that the tender process for the new Channel Tunnel trains be restarted after German firm Siemens won the contract over its French rival Alstom.
Handelsblatt Reuters

The IHT reports that the EU could formalise greater relations with Russia, after President Dmitry Medvedev asked for regular participation in an ‘EU-Russia political and security committee’ at a meeting with Angela Merkel and Nicholas Sarkozy in France.
Times IHT EUobserver

Breaking News.ie reports that Irish Labour MEP Alan Kelly is to write to the EU Competition Commissioner Joaquin Almunia to find out why the Commission gave Allied Irish Bank the all clear in July, only for the bank to require billions from the government earlier this month.
Breaking News.ie