The Letter n°506

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The Letter n°506
The Letter
Tuesday 25th October 2011
issue 506
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"European federalism has to be established ..."
Author : Didier Reynders
Didier Reynders
The sixth reform of the Belgian State is a stage in the procedure that is likened to a "bet", with a transfer of competence over to the federal entities. The reasons for the Belgian political situation are similar to those of the crisis experienced by the EU, with the central issue being solidarity between regions. In an interview published by the Robert Schuman Foundation Didier Reynders, Belgian Finance Minister for the last eleven years, explains that "European federalism - which is already a reality from a monetary point of view - will have to be established" . He calls on the EU to have strong, budgetary autonomy, so that economic governance can be totally efficient.
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Front page! : Ukraine
From 24th to 26th October, the Chairman of the Robert Schuman Foundation, Jean-Dominique Giuliani, is taking part in a conference in Kyiv, Ukraine, organised by the National Civil Service Academy on "Relations between the European Union and Ukraine." He will be speaking on the future of relations between the EU and Ukraine. Mr Jacques Barrot, former Minister, member of the Foundation`s administrative board, member of the Constitutional Council and former Vice President of the European Commission, is speaking on the theme of "Rule of Law, Democracy, Freedom and Justice, the Intangible Values of the European Union"... Read more
Vote for the Foundation!
The Robert Schuman Foundation has been nominated as being one of the most influential European think-tanks in 2011 and could be awarded the European Public Affairs Prize on 9th November. European civil servants, MEPs, their assistants and members of organisations who are registered on the EPAD Directory or on the register of interest representatives at the EU can vote until 26th October. It's up to you to vote - it just takes a minute and means a great deal to the Robert Schuman Foundation. Thank you very much for supporting our work for Europe!.. Read more

Elections : Bulgaria
According to still partial results, Rossen Plevneliev, the ruling party's candidate (GERB) came out ahead with 39.6% of the vote in the first round of voting in the presidential election on 23rd October in Bulgaria. He is ahead of the Socialist candidate Ivaylo Kalfin, who is said to have won 29.7% of the vote and former European Commissioner Meglena Kuneva, an indepdendent candidate, with 14%. A second round, in which Mr Plevneliev and Mr Kalfin will face each other, will take place on 30th October... Read more
On 20th November the Spanish are being convened early to renew the members of their bicameral Parliament (Cortes generales): the Senate, the upper chamber, comprises 208 members elected by universal suffrage (provincial senators) and 49 representatives appointed by the 17 autonomous communities (Community Senators) and the Congress of Deputies, the lower chamber, comprises 300 to 400 MPs (350 in the present lower chamber), elected at least every four years by proportional representation. 10 parties sit in the outgoing Congress of Deputies: the Socialist Party (PSOE) in office, the People`s Party (PP), the main opposition party, Catalonia Convergence and Union (CiU), the Basque Nationalist Party, the Catalonia Republican Left (ERC), the Galician Nationalist Bloc (BNG), the Canaries Coalition (CC), United Left (IU), Union, Progress and Democracy (UPyD), Yes to Navarre (NB). According to a poll by Metroscopia for the daily "El Pais", the PP has a comfortable lead over the PSOE. It is credited with 45.5% of the vote whilst the PSOE is due to win 29.7%. United Left is due to come third winning 7.6% of the vote, Union, Progress and Democracy is due to win 4.5%... Read more
3.1 million Irish are being called to appoint the successor to Mary Patricia McAleese as the president of the Republic of Ireland on 27th October. The Irish will also vote on that day in two referenda - one on the payment of judges and the other on the possibility of the Oireachtas (Parliament) to undertake inquiries. Seven candidates are running. According to the latest poll by Ipsos MMRBI, published in The Irish Timesm the chair of the Labour Party, Michael Higgins is in the lead in terms of voting intentions with 23% of the vote. He is followed by Sean Gallagher, who is due to win 20% of the vote and Martin McGuiness 19%. Mary Davis is credited with 12%, David Norris 11%, Gay Mitchell 9%, and Dana Rosemary Scallon 6%... Read more
Federal Elections in Switzerland
During the federal elections (renewal of the two chambers of parliament) in Switzerland on 23rd October, the populist party, the Swiss People's Party came out ahead, but it has lost ground in comparison with the previous elections in 2007. Instead of reaching its goal of 30%, it only won - according still partial results - 25.9% of the vote. Its leaders, Christoph Blocher, Vice-President of the party and Tony Brunner, its President, did not succeed in winning a senatorial seat. The Socialist Party is said to have won 18.1%, the PLR (Free Liberals), 15.3% and the PDC (Christian Democratic Party), 13.1%. The Green Liberals and the Conservative Democratic Party (PBD) is said to have won slightly over 5%... Read more

Financial Crisis : Ireland is recovering
From 1st to 20th October the European Central Bank, the European Commission and the International Monetary Fund travelled to Ireland to undertake their quarterly assessment of its economic recovery programme. The three partners congratulated Ireland on the rapid implementation of structural reforms. They observed higher growth than originally forecast and an efficient recapitalisation of the banks, thanks to the participation of the private sector. According to the European Central Bank, Ireland is on the right path in terms of budgetary consolidation and is due to achieve a debt rate lower than the required 3% by 2015... Read more
Rating further downgraded
On 18th October the rating's agency Moody's took Spain's sovereign rating down two notches. It therefore dropped from Aa2 to A1. According to the agency "no credible solution to the sovereign debt crisis has been put forward" since the Spanish rating was placed under surveillance at the end of July. According to Moody's, due to its sizeable requirements in terms of loans and the high level of debt experienced by its businesses, Spain is still vulnerable to problems on the credit markets... Read more
Rating downgraded
On 20th October the ratings agency Standard & Poor`s downgraded Slovenia`s solvency rating. The country, which has been in the euro zone since 2007, dropped from an "AA" rating to "AA-". The agency highlights the fact that the government has not put forward any credible strategy to consolidate its budgetary situation since the crisis in 2008... Read more
24 Italian banks' ratings downgraded
Standard & Poor's downgraded the ratings of 24 Italian banks on 18th October - most were of average size, except for the Banca Monte dei Paschi di Siena (BMPS), the UBI Banca and the Banco Popolare. They did this because of a worsening in the peninsula's economic situation. BMPS, the oldest bank still in operation in the world, has seen its long term rating reduced by one notch to "BBB+", just like the Banco Popolare which has been downgraded to "BBB" and that of UBI to "A-", said the financial assessment agency in a press release. According to the agency tension on the markets and the "decline of growth prospects" have led to a worsening of the economic context for the Italian banks whose refunding costs "are going to increase significantly" due to a rise in obligatory Italian rates. S&P "does not think that the difficult context is temporary or that it will easily be reversed.".. Read more
2012 Growth Reduced
On 20th October the German government reduced its growth forecasts for next year to 1% instead of a previous estimate 1.8%, according to announcements made by the German Economy Ministry. The figures notably reflect a decline in the economy that is suffering due to the debt crisis in Europe. Growth will lie at 2.9% this year, says Berlin, ie slightly more than the 2.6% forecast in the last estimate in April. But "the risks from abroad are significantly higher," commented the German Economy Minister, Philipp Rösler, who spoke of the "growing destabilisation of consumers and businesses to the backdrop of the euro zone crisis.".. Read more

European Council : Greece
The euro zone gave the greenlight to the payment of a vital loan to Greece on 21st October to prevent its bankruptcy, however the zone is still greatly divided over other issues in its response to the debt crisis. At a meeting in Brussels the Finance Ministers of 17 countries of the Monetary Union gave their OK to releasing the 6th part of the loan to Greece totalling 8 billion euros, decided in an initial rescue plan that was agreed in the spring of 2010, to a total of 110 billion euros. The package is being co-funded by the Europeans, to a total of 5.8 billion euros and the IMF, which still has to give its approval. The payment is due in the first half of November and will enable Athens to avoid a default situation for the time being... Read more
Moving towards a solution to the crisis?
On 23rd October the 27 heads of state and government of the EU insisted on the need to overcome the sovereign debt crisis and discussed the need to recapitalise the banking system. They stressed that the measures taken should not damage either growth or employment, since the European Strategy 2020 goals had to be respected. They also prepared the next G20 summit in order to defend Europe's position. On the sidelines of the European Council the 17 heads of State and government of the euro zone met to institutionalise this meeting at the summit, which will become at least a bi-annual event and to grant Herman Van Rompuy the chairmanship of this. The latter has defined five priorities: restoring public finances, finding a solution for Greece, fighting against the risk of contagion, restoring confidence in the banking sector and improving the governance and integration of the euro zone... Read more

Commission : The launch of Galileo Satellites
On 21st October the Soyuz rocket took off from the launch pad of the Guianese Space Centre. This technical success marks the highpoint in two European scientific cooperation projects. On the one hand it heralds the start of the operation of the satellite navigation system, Galileo, both an economic and strategic competitor of the American GPS system. On the other hand this luanch was accomplished thanks to extended cooperation between the European Space Agency and its Russian counterpart - the former operating this base and the latter responsible for the rocket that put the two Galileo satellites into orbit... Read more
Improving connections in Europe
On 19th October the President of the European Commission, José Manuel Barroso, presented an investment plan to improve interconnections in Europe. This 50 billion euro plan should lead to the improvement in strategic infrastructures for the European economy, notably in areas such as transport, energy and digital technologies. This plan should also lead to the creation of many jobs, notably with high value added and improve the competitiveness of the European economy. On the same day the Commissioner for Energy, Günther Oettinger, gave details of the Commission`s ambitions as far as energy infrastructures were concerned. This 9 billion euro plan will focus on some major projects such as the South gas corridor... Read more
Financial Market Regulation
Michel Barnier, Commissioner for the Internal Markets and Services put proposals forward on 20th October for a better regulation of the financial markets. The revision of the directive on financial tools' markets that dates back to 2009 plans for better surveillance of new high frequency trading platforms and enhanced surveillance with the means to implement sanctions and to ban dangerous products. If these proposals are accepted by the European Parliament and the Council, the financial markets will become more efficient, stronger, more transparent says the Commissioner... Read more
G20 and protectionism
On 19th October the European Commission published its 8th interim report on potentially restrictive trade measures covering the period October 2010 to September 2011. In its study it expresses its concern over the lack of measures taken to remove obstacles to international trade, notably in the G20 countries. The Commission notably highlights the increase in the number of these obstacles, whilst the overall improvement in the economic situation no longer justifies them. These restrictive measures equally concern tariffs (increases in customs duties), quantitative (the application of quotas) and qualitative aspects (discriminatory technical criteria)... Read more

Council : Agriculture
The 27 EU Agriculture Ministers discussed the proposals to reform the Common Agricultural Policy on 20th October announced by previously by the European Commission. The Council will decide over the next few months how this reform should be undertaken. Moreover ministers did not come to a majority agreement for a joint position within the International Vine & Organisation, nor did they agree over the Commission`s proposal concerning the European Food Distribution Programme for the most deprived. Six states (Germany, Denmark, the Netherlands, Czech Republic, UK and Sweden) were against a policy like this Europe wide, believing that it was the competence of the Member States and that the subsidiarity principle should be applied. After their appeal, the Court of Justice decided that a major share of present spending, which 18 million people benefit from, is not covered by the regulations in force... Read more

Court of Justice : The Court of Justice rejects the patenting of the human embryo
In a case opposing Greenpeace and researcher Oliver Brüstle in the definition of the "human embryo", the German Federal Court turned to the EU`s Court of Justice, which decided on 18th October the human embryo could not be patented at the blastocyst stage. Human Rights activists and the churches were pleased with this wide definition that is the cause of concern for the pharmaceutical industry... Read more

Court of Auditors : Administration on-line
On 21st October the European Court of Auditors published an assessment of the on-line administration systems that have been established in four EU member states: France, Italy, Poland and Spain. This study focuses on projects that were co-funded by the FEDER over the period 2000-2006. The Court presents rather positive results on the investments undertaken: they are based on a strong, reliable technological and financial base and goals that have generally been achieved. Auditors nevertheless regret the lack of more rigorous methodology and lacuna in the conception of initial strategies that have delayed the completion of projects... Read more

ECB : Departure of Jean-Claude Trichet
On 19th October Jean-Claude Trichet bid farewell to the European Central Bank during a ceremony that brought many personalities together in Frankfurt. In his speech the outgoing ECB president referred to European history on many occasions. "Men only accept change in times of crisis and they only see necessity in times of crisis," he declared quoting Jean Monnet, recalling how urgent it is to reform governance of the euro zone. Thanks to "his determination and his pragmatism, his refined approach and firmness (...) Jean-Claude (Trichet) is an example to us all," declared Italian Mario Draghi, who is due to succeed him as head of the ECB as of November 1st... Read more

Germany : Germany discusses quotas to feminise company boards
On 17th October the 30 German companies comprising the Dax index put a project forward that aims to feminise their management whilst rejecting the idea of introducing restrictive quotas. In a press release they announced that they were establishing "realistic, specific objectives for each company - that these would be measurable as far as the share of women in management posts were concerned" and that they "would give account of progress yearly". The share of women on the boards of 200 of Germany`s biggest companies totalled only 3.2% said the DIW... Read more

Cyprus : Negotiations
On 20th October the Cypriot President Demetris Christofias hosted the Special Advisor to the UN Secretary General for Cyprus, Alexandre Downer. This meeting led to a review of the negotiations started in July with the northern part of the island, but also of the preparation of the trilateral meeting that will take place in New York on 30th and 31st October next. On 21st October Mr Christofias and the Turkish leader of the northern part of the island, Dervis Eroglu, met to discuss governance, management and power sharing, as well as relations with the EU... Read more

Spain : ETA/the end of armed combat
The Basque Separatist Movement, ETA, announced "the final end of its armed action", in a video press release that was sent to the Basque newspaper "Gara" on 21st October. The organisation is calling on Spain`s government and also that of France, to open up direct dialogue to settle the conflict. Spanish head of government, Rodriguez Zapatero, welcomed this as a "victory for democracy." The declaration was also welcomed by the President of the European Parliament Jerzy Buzek, who called for disarmament and the movement`s dissolution. "There is no place for violence in the EU," he declared in a press release. ETA is on the list of organisations, which the European Union considers to be terrorist movements... Read more

Finland : Constitutional Reform
Finnish MPs approved a series of constitutional laws on 21st October that restrict the president's powers even more and give greater weight to parliament (Eduskunta), especially in the area of foreign policy! The draft won the support of 118 MPs, 40 against and one abstention. 40 MPs were absent. One of the main changes is that it will now be stipulated in the Constitution that the Prime Minister will represent the country within the EU... Read more

France : "Towards economic government of the euro zone"
In a speech given to the Franco-Korean Chamber of Commerce in Seoul on 21st October, French Prime Minister, François Fillon, declared that Europe was moving "resolutely towards the economic government of the euro zone," after the debt crisis that has revealed "lacuna in our monetary union". Mr Fillon started a three day visit to South Korea and Japan on 20th October the focus of which was the G20 that will take place on 3rd and 4th November in Cannes... Read more

Italy : Ignazio Visco appointed head of the Bank of Italy
On 20th October the head of the Italian government, Silvio Berlusconi, chose Ignazio Vasco, presently director general of the Bank of Italy to take over as its head in replacement of Mario Draghi, who will take over the presidency of the European Central Bank on November 1st. This appointment is being submitted to the ratification of Italian President Giorgio Napolitano, before it can become effective... Read more

Latvia : Dombrovskis, outgoing Prime Minister, asked to form a new government
Latvian President Andris Berzins announced on 19th October that he had asked outgoing Prime Minister Valdis Dombrovskis to form a government thereby putting an end to over a month of political speculation in the wake of the general elections on 17th September. "I have decided to ask Valdis Dombrovskis to form a government," said Mr Berzins in a press release, thereby confirming his wish for as "wide a coalition as possible.".. Read more

UK : Referendum?
The British parliament planned on 24th October whether or not to organise a referendum on the UK`s continued membership of the European Union; initially planned for 27th October next the vote was brought forward by Prime Minister David Cameron. The referendum gives the choice of three options: staying in the EU, leaving the EU or the negotiation of more distant links based only on "trade and cooperation". The head of British diplomacy William Hague, a convinced eurosceptic, believed on 24th October that holding a referendum on the UK`s continued membership of the EU would boil down to "asking the wrong question at the wrong time". "I have pleaded more in favour of referenda than anyone else and I have fought more against the euro than anyone else," recalled the Minister, who, in spite of his repeated attacks on the single currency, has to follow the government line and fulfil his role as the UK`s representative on the international stage. "But this proposal" in support of a referendum on the UK`s place in the EU" - is "the wrong question at the wrong time," said Mr Hague... Read more

Slovakia : Interim Government
On 21st October the Slovakian Parliament adopted an amendment thereby enabling the Head of State to maintain the outgoing government led by Ms Iveta Radicova in office until the early elections on 10th March; hence she has the power to represent Slovakia at the euro zone summit. Her interim government will however have limited powers. It will be able to take decisions concerning the budget but any other action will require the approval of the president stipulates the Slovakian legislation. This constitutional amendment was approved by a majority of 139 votes out of 150, ten days after the collapse of Ms Radicova`a government... Read more

Slovenia : Dissolution of Parliament
The head of the Slovenian State, Danilo Türk dissolved Parliament on 21st October in view of the general elections that are to take place early on 4th December after Parliament`s rejection in September of a confidence vote in support of Borut Pahor`s government. The political crisis reduced the prospects of economic recovery and the balancing of the country`s public finances... Read more

Iceland : Initial negotiations with the EU
The first meeting of the conference on Iceland's membership to the EU took place on 19th October in Brussels. Both parties closed two negotiation chapters (freedom of movement of workers and intellectual property). On these two points the candidate country has respected all European standards. Iceland has made a new step towards its membership of the EU... Read more

Russia : Russian-Ukrainian Summit on Gas Tariffs
Russian President Dmitri Medvedev was host to Ukrainian President Viktor Yanukovich to discuss gas tariffs qnd bilateral relations on 18th October. The two presidents spoke as the Economic Forum in Donetsk was taking place - one week after the sentencing of former Ukrainian Prime Minister Yulia Tymoshenko to 7 years in prison. Dmitri Medvedev intimated that progress in the negotiations on Russian gas prices to Ukraine had been achieved. In exchange Russia has set its conditions and demamded that Kyiv join the Russia/Belarus/Kazakhstan Customs Union instead of concluding an agreement with the EU... Read more

NATO : Libya - end of the misson on 31st October
On 21st October, the day after the death of the fallen Libyan leader, Muammar Kadhafi, NATO announced that it would end its mission in Libya on 31st October with the feeling that its duty had been done. The representatives of the 28 Alliance members in Brussels concluded "a preliminary agreement" to put an end to the maritime and air operation on 31st October that started in Libya on 31st March, declared the Alliance's Secretary General, Anders Fogh Rasmussen during a press conference... Read more

Eurostat : Trade
On 19th October Eurostat published figures on the current account for the second quarter of 2011. In comparison with the same period in 2010 the goods account deficit has increased, likewise the surplus generated by services. The current account is in deficit overall totalling 35.2 billion euros. The account is in deficit with China to a total of 30 billion euros; greater surpluses have been achieved in Switzerland and the USA (around 30 billion also)... Read more

Eurobarometer : Europeans and the Crisis
The Eurobarometer service at the European Parliament published a study on 21st October entitled "The Europeans and the Crisis", which analyses European public opinion in the face of the present economic and financial crisis. It emerges that 54% of those interviewed believe that the euro has not attenuated the crisis (a decline of three points in comparison with six months ago). Most people who gave their opinion said they supported the pooling of a share of the sovereign debts and the creation of euro-bonds. They said they would like greater coordination between national responses to the crisis. These results vary greatly from one State to another... Read more
Social Climate
On 17th October Eurobarometer published a report on the state of the social climate in Europe. This study reveals that Europeans are slightly more confident than before as a whole, even though the present economic and financial crisis is a source of major concern. Moreover, although Europeans are quite satisfied with their personal situation, it seems that they are more sceptical about the global situation. In spite of rising inflation they also say that they are quite confident in economic recovery and in the improvement of social integration... Read more

Studies/Reports : Anti-Fraud Report
The European anti-fraude office (OLAF) published its annual report on 19th October. In 2010 OLAF undertook 419 investigations in the various states of the EU including 81 in Bulgaria, 41 in Italy, 37 in Belgium and 36 in Romania. The investigations mainly involved the European institutions and the Common Agricultural Policy (CAP) and led to the recovery of 67.9 million euros, of which 32.9 million in the name of the Cohesion Policy... Read more
Report on Youth Unemployment
The International Labour Organisation (ILO) presented an update on its report on "World Trends in Youth Employment" on 19th October. In this report ILO experts observe that young people aged 15 to 24 were particularly affected by the consequences of the 2008 crisis. On the one hand in developing countries young people have to face an increased lack of work. On the other, in developed countries, unemployment continues to increase. It is particularly worrying that the search for work is lasting longer and longer, and that the number of young people who quit the labour market is also increasing. The report stresses that governments must first face the crisis and step up economic recovery so that young people's situation improves... Read more

Culture : Cézanne et Paris
The Luxembourg Museum in Paris is devoting an exhibition to Paul Cézanne (1839-1906) until 26th February 2012. The exhibition reviews the major themes Cézanne explored in Paris. His friendship with Emile Zola is a privileged theme. Organised with the Petit Palais, the Beaux-Arts Museum of the city of Paris, this exhibition brings together around 80 major pieces of work from around the world... Read more
Miro, Momet, Matisse - The Nahmad Collection
For the first time and in an exclusive exhibition, one hundred works of art in the private collection "Nahmad" will be on show together at the Kunsthaus of Zurich until 15th January 2012. Pablo Picasso is one of the main artists; Matisse, Modigliani and Kandinsky, together with Claude Monetare represented by a series of major pieces of work... Read more
Perugino in Munich
The retrospective of the most important pieces of work by Perugino (1448-1523), a major Quattrocento artist, who was the student of Verrochio and master of the decoration of the Sixtine Chapel, is the main exhibition of the Old Pinacotheque of Munich, which is celebrating its 175th anniversary. The exhibition entitled "Perugino - Raphael's Master" is open until 15th January 2012... Read more

24th-27th October


Plenary Session of the European Parliament

26th October

Euro Zone Summit

27th October


Presidential Election

28th October

Justice/Internal Affairs Council

30th October


Presidential Election (2nd round)

3rd-4th November


G20 Summit

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