This story about the Europe 2020 strategy was published by EurActiv on 19th March 2010.

In a meeting with the president of the European Council, Herman Van Rompuy, the Spanish, Belgian and Hungarian labour ministers, representing the current and upcoming rotating presidencies of the EU, discussed the fundamental differences between EU social and finance ministers, as spelled out in the conclusions of the respective councils.

The ‘Europe 2020′ strategy should include both short and long-term measures and tackling unemployment should be an overriding objective, stressed the three labour ministers.

Wary of lifting anti-crisis measures too soon

“The economic crisis cannot be deemed to be over. We have the same number of jobs created as those destroyed by the crisis,” said Spanish Labour Minister Celestino Corbacho, noting that “we are not seeing net growth of new jobs yet”.

It would be wrong for Europe to let its guard down and reduce stimuli and supportive measures by the end of the year, as the Economics and Finance (ECOFIN) Council agreed to do earlier this week, said the Spanish labour minister.

EU finance ministers indeed emphasised the importance of combining cooperation on financial market regulation with “principles to underpin the coordinated withdrawal of short-term measures in labour and product markets” and called for their withdrawal by the end of 2010.

The communication gap between the finance and labour ministers seems to relate to their different approaches to economic growth.

“We need an economic growth strategy, but one that creates jobs,” stressed Belgian Labour Minister Joelle Milquet.

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This story about the proposed European Monetary Fund was published by EurActiv on 18th March 2010.

Policymakers are debating whether a proposed ‘European Monetary Fund’ would require changes to the EU’s Lisbon Treaty, as predicted by German Chancellor Angela Merkel. The EU executive believes it would, while politicians on the margins say it would not.

“Plans for a European Monetary Fund could imply that we indeed need to change the EU treaty,” a European Commission official told EurActiv.

However, socialist policymakers argue that a monetary fund, or as they have proposed it, a ‘trustee fund’, would not require any changes to the treaty. The prospect of treaty change would dissuade EU leaders from moving ahead and is reminiscent of recent referenda on the ratification of the Lisbon Treaty.

Socialists want ‘trustee fund’ without treaty change

The Party of European Socialists (PES) has come up with a parallel proposal that, they argue, would be a legitimate plan under the Lisbon Treaty’s current terms.

It is based on the EU’s balance of payments tool, which has helped non-euro countries to deal with their deficits.

A provision in the EU treaty for aid to any member state “threatened with severe difficulties caused by exceptional occurrences beyond its control” would provide the linchpin for such a fund, according to the socialists.

The proposal looks similar to a Eurobond as the Commission would lend its weight to borrow from the bond market to give the defaulting country a loan.

However, the Commission is not convinced by the PES proposal. The official noted that using the provision suggested by the socialists - aid for “exceptional circumstances” - would not provide the grounds for a systematic fund.

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This story about the 3% R and D target was published by EurActiv on 17th March 2010.

EU finance ministers are fighting against the European Commission’s target of spending 3% of GDP on research and development (R&D), demanding a new “outcome-oriented” measure of success.

The 3% figure is one of five headline goals of the ‘Europe 2020′ growth strategy and has been firmly backed by EU Innovation Commissioner Máire Geoghegan-Quinn.

Meeting in Brussels yesterday (16 March), finance ministers called for “urgent consideration” of wider indicators to measure R&D and innovation, putting the European Council on a collision course with the EU executive, which has put its political weight behind the target.

Including spending as an indicator has proven controversial and has exposed differences between ministries of finance and research across Europe. With public budgets under pressure, finance ministers are reluctant to commit to additional spending on R&D.

Geoghegan-Quinn directly referred to the rift between ministers earlier this month when she defended the 3% spending target.

”I know that this is controversial. But I believe that it should stay. Research ministers have told me in clear terms that its existence has strengthened their hand in their dealings with their finance ministers. Now is exactly the wrong moment to remove this discipline,” she said.

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This story about Catherine Ashton’s deputies was published by EurActiv on 15th March 2010.

Catherine Ashton, the EU’s recently-appointed foreign policy chief, will be able to trim her busy work schedule and counter criticism of her lack of visibility thanks to the assistance of three EU commissioners, who will act as her deputies.

Štefan Füle, the Czech commissioner for enlargement, Andris Piebalgs, his Latvian colleague responsible for development, and Kristalina Georgieva, the Bulgarian commissioner for humanitarian aid, will all assist Ashton, a Commission official said.

Catherine Ashton has endured attacks from several quarters, including French ministers, for not flying the EU flag at hotspots such as earthquake-hit Haiti or being unable to attend European gatherings.

But Commission representatives said the situation was going to change, as the EU’s first-ever High Representative for Foreign and Security Policy, who is also commissioner for external relations, will now be able to use colleagues as deputies.

“I wish we had dealt with the issue of deputies at the intergovernmental conference [laying the ground for the Lisbon Treaty], but here we are,” said one Commission official, who asked not to be named.

“In a European Union of 27 countries, she - or anybody else - will always be attacked for being here and not somewhere else,” a diplomat told EurActiv.

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This story about trading renewable energy was published by EurActiv on 12th March 2010.

Only five EU member states are planning to buy renewable energy from other countries, while the EU as a whole is on track to exceed its 20% collective target, the European Commission said yesterday (11 March).

Italy will have the biggest shortage of domestically produced renewable energies, the Commission said in a summary of the forecast documents submitted by member states under the renewables directive. The country will have to buy around 1.2 Mtoe from other countries in order to meet its binding target, it stated.

Belgium, Denmark, Luxemburg and Malta were the other EU countries which expected to fall short of their targets with domestic production only.

By contrast, ten member states predict a surplus in 2020, which they could transfer to another member state, the Commission said. This would amount to about 2% of the total renewables required in 2020.

Spain and Germany plan the largest absolute amounts of surplus renewable energy on top of their binding commitments. Consequently, Germany expects to hit 18.7% instead of 18%, and Spain 22.7% instead of 20%.

In consequence, the EU as a whole is set to reach a 20.3% share of renewable energies in 2020, slightly exceeding its 20% target, the Commission said.

“These forecasts show that member states take renewable energy very seriously and are really dedicated to push their domestic production,” said Energy Commissioner Günther Oettinger. “It is an incentive to invest in green technology and the production of renewable energy,” he added.

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This story about a proposed EU bank tax was published by EurActiv on 11th March 2010.

536 MEPs yesterday asked the European Commission to finish its report on ‘innovative financing’ before the June G20 talks, so world leaders can come up with specific proposals on which banks will be taxed and how.

Just 80 MEPs voted against the EU executive’s examination of a bank tax – so far dubbed a financial transactions tax (FTT) in the legislature – amid 33 abstentions.

Plans still ‘embryonic’

World leaders will meet in Toronto in June this year and are expected to come to an agreement on how a global tax should be structured.

Though the European Parliament’s vote shows heightened interest in Brussels for a tax on banks, the EU institutions warn that much work remains to be done at both EU and global level on the shape and timing of such a tax.

“Plans for an FTT are very much in the embryonic phase,” a Parliament source told EurActiv.

The European Commission also said that its paper on innovative financing was currently being written and that it was too early to talk of legislation on a bank tax.

The Commission paper, like a parallel paper being drafted by the International Monetary Fund, is not only examining an FTT but also a levy on assets, as is the case with US President Barack Obama’s proposal.

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This interview with Jeffrey Sachs about a proposed banking tax was published by EurActiv on 10th March 2010.

The EU should impose a financial transactions tax (FTT) as soon as possible, with or without the US, economist Jeffrey Sachs told EurActiv in an interview. Faced with huge budget deficits and public anger, both the US and the EU will have to impose the tax soon, predicted the American economist.

Sachs has joined a London-based campaign for an EU tax on banks, heaping criticism on the US for ignoring the public good.

The economist encouraged the EU to draw up a plan on a financial sector tax at the next meeting of EU finance ministers on 16 March, even though the US is not on board yet.

Sachs told EurActiv that an overwhelming public mood in favour of a tax on banks will push governments to legislate soon and that the EU should impose a “broad-based” tax at a “modest rate”.

“We have a huge budget hole in the US and in Europe and I think there is plenty of evidence that the financial sector is under-taxed and under-regulated,” Sachs argued.

Both the UK and the US have been waiting for an IMF paper, due in April, and are weighing up the costs and benefits of the tax before they come to a decision.

Currently the US and the UK have different views on which instruments and banks should be taxed.

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This story about an EMF was published by EurActiv on 9th March 2010.

German Chancellor Angela Merkel gave her backing on Monday (8 March) to a proposed European Monetary Fund to rescue ailing eurozone member countries but warned this would mean changing the European Union treaty.

Germany’s Finance Minister Wolfgang Schaeuble threw his support behind the idea of an IMF-style rescue fund for Europe at the weekend, suggesting that countries with budget difficulties such as Greece could tap into it in future.

The European Commission said on Monday it was working with Germany, France and other European countries on the plans but a spokesman said it was too early to say whether the fund would be just a financial instrument or a new institutional body with its own staff and budget.

In Berlin, Merkel said that while details would have to be sorted out, the European Union needed to have a mechanism to help itself if it hit difficulties, even if it meant changing the EU treaty.

“I think the idea [of a European Monetary Fund] is a good one,” Merkel told Berlin-based journalists at the Foreign Press Association, adding issues such as who would contribute and how independent it would be still have to be looked at.

“Without changing the [EU] treaty, it cannot be done. We would need a treaty change,” she said. “If the European Union is to be capable of taking action, it will run into such questions,” she added. “The EU treaty will not be the end of history. Then we would be in a static system. I don’t want that, I want Europe to respond to new situations.”

She said the euro was based on the two anchors of the “no bailout” clause - under which no country can take on another eurozone state’s debts - and the Stability and Growth Pact’s fiscal deficit rules.

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This story about Eurozone aid for Greece was published by EurActiv on 8th March 2010.

French President Nicolas Sarkozy promised on Sunday (7 March) that eurozone countries would help Greece if its financial problems worsened. Meanwhile, German Finance Minister Wolfgang Schaeuble said he plans to make proposals soon on a new European institution to help ensure the stability of the euro zone.

Sarkozy was speaking after talks with Greek Prime Minister George Papandreou, who is looking to secure pledges of support from European capitals that will reassure markets and lower the debt-stricken country’s high borrowing costs.

“If Greece needs help, we will be there,” Sarkozy said at a joint news conference.

“The main actors on the European stage [have] decided to do whatever is needed to make sure Greece is not isolated,” he added, declining to give precise details of any aid plans but stressing that his economy minister was drawing up measures.

“Christine Lagarde, in tandem with her colleagues in the euro zone and in Europe [...] is working on a certain number of precise measures if Greece needs them,” he said.

Papandreou met German Chancellor Angela Merkel and Luxembourg Prime Minister Jean-Claude Juncker on Friday. He had been hoping for specifics of a possible aid package and on Sunday told reporters he saw the outlines of a plan.

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This story about the new EU diplomatic service was published by EurActiv on 5th March 2010.

The birth of the European External Action Service, one of the most anticipated innovations of the Lisbon Treaty, will be a difficult one, admitted a top European Commission official yesterday (4 March).

João Vale de Almeida, director-general at the European Commission’s external relations department and future EU ambassador to Washington, spoke of the double challenge of setting up the European External Action Service (EEAS) fast and “right”. He was speaking at a conference organised by 14 European think-tanks, who presented a “contribution to the Spanish, Belgian and Hungarian trio presidency”.

Vale de Almeida is a key player in the 13-member committee led by Catherine Ashton, the EU’s foreign affairs chief, in charge of producing a proposal for setting up the EEAS.

Based on her suggestions, EU heads of states and government are expected to come to a decision on the EU’s new diplomatic corps by the end of April (see ‘Background’).

“For the Lisbon Treaty, it took us a nine-year pregnancy,” Vale de Almeida said. Comparing this with the short timeframe for adopting the EEAS, he said “birth after three months will be very difficult”.

The top official said it was extremely important to design the EU’s new diplomatic service in “the best possible way” and called on EU member countries to show “political will”.

Implicitly, he appeared to confirm that the blueprint, already drafted by Ashton’s committee, was encountering difficulties in some member countries.

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