Informal Meeting of EU Defence Ministers

European Union defence ministers welcomed the start of the evacuation of EU citizens from Libya. Although the issue was not originally on their agenda, EU defence ministers discussed it with NATO’s Secretary General, at their informal meeting in Gödöllő, on 25 February 2011, and the EU’s High Representative said that sanctions should be considered against Libya.
Inexpensive but efficient defence
Long-term planning calls for broader cooperation in the EU’s common security and defence policy. The defence ministers discussed this and similar issues. Member states backed the principle of pooling and sharing defence capabilities, which could be an innovative solution to improve efficiency while cutting cost.
The EU has already discussed the issue at several forums, most recently, at an expert conference, which was organised by the Hungarian Presidency in Budapest. Addressing the informal meeting in Gödöllő, Catherine Ashton said the EU will look at ways to fine-tune pooling and sharing, based on member states’ needs.

“The negative effects of the economic crisis, have highlighted the need to use the existing European resources in a more cost-effective, coordinated and organised manner,” Minister of Defence, Csaba Hende, said in an expert seminar, on the current issues of the EU’s capability development on 3 February. Roughly, 150 representatives from 27 member states gathered in the Stefánia Palace in Budapest, to discuss the possibilities of the proposal.

The incidents in the immediate neighbourhood of the EU’s southern states in the past weeks have highlighted the region’s security challenges are not decreasing, but increasing; which makes cooperation more important than ever.
The pooling and sharing of defence capabilities are different types of defence cooperation where military capabilities are developed or maintained together or one country specializes herself in a capability area. The Hungarian Presidency’s goal is to popularise this innovative use of capabilities among member states in this semester. This was a major subject at the informal meeting of defence directors in Budapest, at the end of January 2011, and the Presidency proposed it to be a topic at the Meeting of Defence Ministers in Gödöllő, in late February.
Mr Hende said, “Hungary is in a special situation, as the Presidency must carry out its tasks in the new institutional environment created by the Lisbon Treaty. Therefore Budapest is holding an irregular, “supportive presidency”, carrying out its duties not in competition with the High Representative of the Union for Foreign Affairs, and Security but with her guidance.”

After the speech of the Minister for Defence, the most renowned European experts, and researchers of the field, gave presentations in three sections. The morning session revolved around the theoretical background of the pooling and sharing method. The speakers included Hilmar Linnenkamp, former deputy chief executive of the European Defence Agency (EDA), and Jon Mullin, the current capabilities director of EDA.
The speakers agreed that the pooling and sharing method is the main theme of current European defence policy, but Nick Witney, former chief executive of EDA, said, “member states cannot afford to stop developing their military forces due to the economic crisis, and lack of interest. According to the expert, this will inevitably lead to Europe’s loss of significance in global politics.”
http://www.eu2011.hu/news/presidency-aims-more-efficient-organisation-eu-military-capabilities

New Irish government

Irish voters have punished the outgoing Fianna Fail-Green coalition government, handing a strong mandate to the centre-right Fine Gael party. The new government's immediate tasks will include tackling the country's economic mess and securing more favourable terms on a recent international bail-out.
Counting will continue in a number of outstanding constituencies on Monday (28 February), with 154 places in the Ireland's 166-seat parliament filled so far: 70 Fine Gael, 36 Labour, 18 Fianna Fail, 13 Sinn Fein, five United Left Alliance and 12 others.
Fianna Fail, which means "soldiers of destiny" in Irish, has governed Ireland for three of every four years over the past eight decades. But voters in Friday's elections took an axe to the party's standing after it presided over the worst economic crash in the state's history. The Green junior coalition party was completely wiped out, losing all six of the party's seats.
Incoming Fine Gael leader Enda Kenny who is set to become prime minister called the vote a "democratic revolution". His party, which is likely to fall six seats short of an overall majority, is predicted to form a coalition government with the centre-left Labour party, which enjoyed its best ever election results. A combination with Independent MPs is also a possibility.

Independent Senator Shane Ross who topped the poll in the Dublin South constituency said his strong support, the rise of a centre-left party and the collapse of Fianna Fail amounted to an "end of tribal politics in Ireland". Born out of Ireland's 1922-23 civil war, the conservative Fianna Fail and Fine Gael parties have dominated the country's political sphere since that date, reducing the importance of the left-right divide typically seen in other European countries.
The new Irish parliament is set to convene for the first time on 9 March, two days before eurozone leaders meet in Brussels to debate ways to reform the bloc's emergency lending fund.
An overhaul of the club's budgetary rules is also on the agenda, as are plans to boost the economic competitiveness of individual member states. Mr Kenny has indicated he will seek a reduction in Ireland's borrowing rate, together with compulsory "haircuts" on unguaranteed senior bank debt, as part of the overall package.
Germany has been a driving force behind the high interest rate attached to EU loans as a means of dissuading potential borrowers, but economists argue that the punitive rate and Ireland's low growth prospects mean the country's debt pile can only go up in the coming years.
Berlin is expected to request something in return from Dublin if it agrees to improved lending terms. Plans for increased eurozone competitiveness, currently being drafted by the staff of European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy, contain calls for member states to include a 'debt brake' but no provisions on increasing corporate taxation, reports the Financial Times.Ireland has so far resisted Franco-German calls to increase its 12.5 corporation tax, arguing it is key to the country's economic recovery.
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Pact for Competitiveness

The abolition of salary indexation systems, greater harmonisation of member state corporate tax rates and an overhaul of national pension systems are among the measures contained in a Franco-Geman 'Pact for Competitiveness' for the eurozone, put forward at the EU summit on Friday (4 February). Other elements included the insertion of a "debt alert mechanism" into national constitutions, the mutual recognition of educational diplomas and the establishment of national crisis management regimes for banks. Details would then be thrashed out at a specially convened summit of eurozone leaders in March, together with an already-scheduled EU summit later in the month.
"We need to increase competitiveness and the yardstick should be the member state that is leading the way," Ms Merkel told journalists immediately prior to the lunch. Suggestions that Germany should increase salaries, potentially harming the country's competitiveness, have irked Berlin in the past. The German leader indicated that non-eurozone states will also be invited to sign up to the competitiveness pact if they wish.
Mr Sarkozy hailed the initiative as a major step forward. "France and Germany are working hand in glove to defend the euro," he told the joint briefing. The Franco-German "structural plan" was a way of boosting European competitiveness and ensuring the convergence of member state economies, he added.
The plans for enhanced joint governance of the 17-nation eurozone economy appeared to hit a hurdle almost immediately however, with Belgian Prime Minister Yves Leterme blasting them as being overly constrictive. "There must be more economic cooperation, but member states must be left the room to carry out their own policies," Mr Leterme said on arriving at the one-day summit, originally scheduled to discuss energy issues. "Each member state has its own accents, its own traditions. We will not allow our social model to be undone," he added.
Critics also hit out at the pact's intergovernmental nature, with little role for the EU's institutions envisaged. "We welcome the move towards greater economic governance as step in the right direction. However, the method being proposed will not provide the required result as it is purely intergovernmental," said the leader of the European Parliament's Liberal group, Guy Verhofstadt. "The only effective way of ensuring the discipline and objectiveness that is required, is through the Community method and with the empowerment of the Commission to act and set real sanctions."

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EU leaders set deadlines for energy market

U leaders on Friday (4 February) agreed to set new deadlines for the completion of the bloc's internal energy market, linking up gas and electricity grids and consulting with the EU commission before doing bilateral energy deals with foreign suppliers. "The internal market should be completed by 2014 so as to allow gas and electricity to flow freely," the final conclusions read.
National governments are also invited to "accelerate work" on adopting technical standards for electric vehicle charging systems by mid-2011 and for smart grids and meters by the end of 2012.
The thorny issue of EU funding for cross-border energy infrastructure links, with net payers to the EU budget such as Germany keen on having just the private sector footing that bill, has been postponed until June, when the EU commission is due to come up with a list of projects which are "justified from a security of supply/solidarity perspective, but are unable to attract enough market-based finance."
In addition to pipelines and new foreign suppliers, "Europe's potential for sustainable extraction and use of conventional and unconventional (shale gas and oil shale) fossil fuel resources should be assessed."
Energy efficiency targets, "presently not on track", are also flagged up. The EU last year signed up to boost up its energy efficiency by 20 percent by 2020, for instance by streamlining standards for energy savings of buildings, transport and industrial processes. "As of 1 January 2012, all Member States should include energy efficiency standards taking account of the EU headline target in public procurement for relevant public buildings and services," the EU document reads.
On the external dimension of energy policy, EU member states are to inform the commission from 1 January 2012 "on all their new and existing bilateral energy agreements" with foreign countries. "The commission will make this information available to all other member states in an appropriate form, having regard to the need for protection of commercially sensitive information. The high representative is invited to take fully account of the energy security dimension in her work. Energy security should also be fully reflected in the EU's neighbourhood policy," EU leaders say.
Regarding Russia, accounting for up to 90 percent of the gas supplies in some eastern European member states, "work should be taken forward as early as possible to develop a reliable, transparent and rules based partnership with Russia in areas of common interest in the field of energy and as part of the negotiations on the post-Partnership and Co-operation Agreement process." EU climate change commissioner Connie Hedegaard welcomed the agreement and said it sends a very clear signal, that in spite of the economic crisis "there is a strong will to deliver on key tools to speed up Europe's transition into a resource-efficient, low-carbon society."

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Irish government in tatters as coalition partners pull out

Irish Prime Minister Brian Cowen's government was in tatters Sunday after the junior coalition partners pulled out, in a move likely to spark elections even earlier than those planned for March 11.
Green Party leader John Gormley told a press conference in Dublin that "our patience has reached an end" after a week of political turmoil that resulted in Cowen quitting as leader of his ruling Fianna Fail party on Saturday. "Because of these continuing doubts, the lack of communication and the breakdown in trust, we have decided that we can no longer continue in government," Gormley said after talks with his party's national executive.
The move plunges Ireland into deeper chaos as it struggles to recover from a debt crisis that brought the economy to its knees and forced Dublin to accept an international bailout in November.
Parliament must still pass a finance bill comprising spending cuts and tax hikes which are seen as a pre-condition for loans worth 67 billion euros (90 billion dollars) from the European Union and International Monetary Fund. All the main parties are committed to getting the bill through before an election and Gormley said this had not changed.
AFP

Portugal's President Captures New Term

Portuguese voters elected Aníbal Cavaco Silva to a second term as president Sunday, in a message that they want political stability as the country tries to extricate itself from the European sovereign-debt crisis. The seasoned Social Democratic president—who is head of state, but doesn't run the government—is facing tough months ahead.
Amid concerns that Portugal won't be able to repay its debt, Lisbon has been under pressure from its European partners to take a bailout, a measure the government has denied it needs.
With nearly 100% of the votes counted, official results showed Mr. Silva won 53% of valid ballots cast, while Manuel Alegre from the Socialist Party was in second place, with 20%. The remaining votes were divided among four other candidates.
Mr. Silva, 71 years old, will start his second five-year presidential term under great pressure to maintain the political stability that has allowed Portugal to approve a harsh austerity plan and so far to avoid having to ask for outside help.
The minority government of Socialist Prime Minister José Sócrates managed to pass the 2011 budget, which included public-sector wage cuts, reductions in welfare benefits and tax increases, with the help of the Social Democrats, who abstained from voting after forcing the government to accept deeper spending cuts than originally planned. The budget aims to reduce the government's fiscal deficit to 4.6%of gross domestic product in 2011 from an estimated 7.3% of GDP in 2010.
Concern about the country's ability to repay its debt, following the crises that forced the Greek and Irish governments to accept help from the EU and the International Monetary Fund, has pushed the price Portugal has to pay to finance its deficit higher in recent months.If international financial markets continue to demand higher interest rates from Portugal, the country might also be forced to turn to the EU and the International Monetary Fund for help, despite Mr. Sócrates' insistence that won't be necessary.
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Elindult az első európai szemeszter

Az új gazdasági együttműködés elindításaként az Európai Bizottság 2011. január 12-én éves növekedési jelentést (Annual Growth Survey) adott ki, amelyben gazdaságpolitikai és költségvetési prioritásokat javasol a tagállamok számára.
Növekedés, versenyképesség, munkahelyteremtés
A magyar elnökség szerint a jelentés közzététele után azonnal meg kell kezdeni a tárgyalásokat, hogy az uniós állam- és kormányfők márciusi csúcstalálkozóján politikai iránymutatást fogadhassanak el. Az ezek alapján elkészítendő nemzeti gazdasági programok segíteni fognak abban, hogy Európa kilábaljon a válságból, visszanyerje versenyképességét, és beinduljon a munkahelyteremtés.

Az elnökség meggyőződése, hogy az új gazdaságkoordinációs mechanizmus minden tagállam közös érdeke, és a költségvetési fegyelem megerősítésén túl növekedésösztönző, egyensúlyteremtő intézkedésekre van szükség.

Szigorú költségvetés, egyensúly, stabil pénzügyi szektor

Az Európai Bizottság jelentése tíz pontba szedte az uniós országok számára javasolt gazdaságpolitikai intézkedéseket. Eszerint a növekedés alapvető előfeltétele a szigorú költségvetési fegyelem, a makrogazdasági egyensúly és a pénzügyi szektor stabilitása. A foglalkoztatás növeléséhez a munkavállalás vonzóbbá tételére, a nyugdíjrendszerek reformjára, a munkanélküliek foglalkoztatására van szükség. Emellett a Bizottság szerint megfelelő egyensúlyt kell találni a munkahelyek biztonsága és a foglalkoztatás rugalmassága között. A növekedés ösztönzése érdekében a jelentés javasolja az egységes belső piacban rejlő lehetőségek kiaknázását, a magántőke bevonását és a költséghatékony energiához való hozzáférés biztosítását.

A Bizottság szerint az európai félév meg fogja változtatni a tagállami kormányok gazdaság- és költségvetési politikáinak kialakítását. Ha a jelentésben megfogalmazott célok megvalósulnak, „Európa visszatérhet a gyors gazdasági növekedéshez és magasabb foglalkoztatási szinthez” – mondta José Manuel Barroso, a Bizottság elnöke.

Európai szemeszter

Az éves növekedési jelentés közzététele az európai szemeszternek vagy félévnek nevezett koordinációs ciklus kezdete. Ennek keretében a tagállamok a Stabilitási és Növekedési Egyezmény szabályai, illetve az Európa 2020 stratégia szerint összhangba hozzák a közös uniós célkitűzésekkel makrogazdasági és költségvetési politikájukat, valamint szerkezetireform-intézkedéseiket. Mindez fontos lépés az európai szintű gazdasági kormányzás irányába.

A gazdasági kormányzás megerősítését célzó európai félév eljárási rendjét a tagállamok 2010 szeptemberében hagyták jóvá. Az idei évtől kezdve a Bizottság minden januárban előterjeszti majd az Unió gazdasági helyzetét és a fő kihívásokat elemző jelentését, amely egyben ajánlásokat is tartalmaz a tagállamok számára. Az Európai Parlamentben és a Tanácsban egyaránt megvitatandó éves növekedési jelentés szolgál alapjául azoknak az iránymutatásoknak és következtetéseknek, amelyeket az Európai Tanács tavaszi ülésén fogad el, és amelyek nyomán a tagállamok áprilisban véglegesítik középtávú költségvetési stratégiájukat és nemzeti reformprogramjaikat.

A Bizottság 10 prioritása (1-3 stabilitás, 4-7 munkaerőpiaci reform, 8-10 növekedés beindítása):

1. Implementing a rigorous fiscal consolidation

2. Correcting macro economic imbalances

3. Ensuring stability of the financial sector

4. Making work more attractive

5. Reforming pensions systems

6. Getting the unemployed back to work

7. Balancing security and flexibility

8. Tapping the potential of the Single Market

9. Attracting private capital to finance growth

10. Creating cost-effective access to energy

Commission Survey
Euvonal

Belgium passes the EU Presidency flag to Hungary

Hungary took the rotating presidency of the Council of the European Union from Belgium during a spectacular evening ceremony held in the presence of 270 guests on 6 January 2011. Yves Leterme, acting Prime Minister of Belgium, and Viktor Orbán, Prime Minister of Hungary attended the ceremonial event hosted in the Cupola Hall of the Houses of Parliament (the seat of MPs as well as the government).
From 1st January 2011, it is going to be task of the Hungarian Presidency of the Council of the European Union to shape the issues on the agenda of the European Union in line with the interests of the 27 Member States. In order to maintain the course amidst its many obligations, the Hungarian Presidency has defined the topics that it considers to be of outstanding significance. The Hungarian Presidency wishes to work along four priorities during the first half of 2011. Beside this, it intends to keep in the focus point the human factor, as the basis for intelligent, sustainable and inclusive growth when dealing with all other issues ranging from the economy, through common policies to the issue of enlargement.
Growth and employment for preserving the European social model
The entire Union is defined by a period of economic rearrangement. The Hungarian Presidency will continue the process of consolidation. It is convinced that the key to success is in the future oriented growth strategy of the EU and in the reinforcement of economic policy coordination.
The Europe 2020 strategy wishes to improve or to preserve the living conditions of European citizens, therefore it has to have the creation of jobs and sustainable competitiveness in the focus. Thus the Hungarian Presidency wishes to improve the situation of small and medium enterprises, which are the drivers for job creation and also wishes to call the attention of Member States to the impact that demography and family policy can have on employment and economic growth. In the framework of the initiative to decrease poverty, the Presidency wishes to pay increased attention to the struggle against child poverty and will strive for tangible, European-level measures in the field of the integration of the Roma-people.
Stronger Europe
The internal policies of the EU are structured around three basic elements: food, energy and water. Therefore the Hungarian Presidency attaches great importance to strengthen policies in these fields, thereby also reinforcing Europe. The review of the Common Agriculture Policy, the definition of a common energy policy and a new area, the drafting of a European water policy all serve this purpose. Parallel to the debate on preserving water resources, the European strategy on the development of the Danube-region will also be adopted during the Hungarian Presidency. Hungary wishes to conduct a real and tangible debate on the afore-mentioned issues. This is indispensable in order to make sure that these policies that strength cohesion and solidarity between Member States provide a solid foundation for the next multi-annual financial framework of the Union.
Citizen friendly Union
The EU also has to deal with issues that have a direct relevance on the everyday lives of citizens. Thus Hungary intends to further the implementation of the Stockholm Program, to move forward the enlargement of the Schengen area to include Bulgaria and Romania in order to provide a free movement of people and to protect fundamental rights. Beside all these, it is the objective of the Hungarian Presidency to direct the attention of Member States to cultural diversity as a European value that needs to be protected. Cultural diversity will be a defining theme of cultural events during the Presidency.
Enlargement and neighbourhood policy
Hungary wishes to pay particular attention to taking the enlargement process further and to providing an integration perspective for the Western Balkans region. The Hungarian Presidency will do everything it can to conclude the accession talks with Croatia during the first half of 2011. It is also a priority objective to strengthen the Eastern dimension of the neighbourhood policy, in the framework of which, Hungary will host the second Eastern Partnership Summit in May 2011.
www.eu2011.hu

Estonia enters euro zone

IT WAS a moment the Estonian government - one of a line of liberal, pro-Western coalitions that have ruled the country since 1992 - had been awaiting for years.
At midnight on New Year's Eve, Estonia abandoned its post-Soviet currency, the kroon, in favour of the euro - its last remaining big policy goal since securing membership of the EU and NATO in 2004.

EEA-jelentés: nincs messze a 20 százalék

Az Európai Környezetvédelmi Ügynökség (EEA) múlt heti jelentése szerint az Európai Uniónak sikerült jelentős eredményeket elérnie a szennyezőanyag‑kibocsátás csökkentése és a megújuló energiaforrások alkalmazásának bővítése terén. Az EU kibocsátása az 1990-es évi kibocsátáshoz képest 17 százalékkal csökkent. „A jelentés közzétételének időpontja tökéletes, tekintve, hogy megkezdődtek a cancúni klímatárgyalások” – mondta Jerzy Buzek, az EP elnöke.

„A klímaváltozás kihat a polgárainkra: az ivóvíz minőségére, a táplálékra, amit megeszünk, a levegőre, mit belélegzünk. Nincs egyszerű megoldás. A jogalkotóknak, az üzletembereknek és a polgároknak együtt kell működniük. Többet kell tenni az éghajlatváltozás megfékezéséért. Az EU-nak meg kell felelnie a 30 százalékos CO2-csökkentési céljának, ahogy azt Európai Parlament múlt heti határozata megállapította”.
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Dublin unveils radical austerity programme

The Irish government has unveiled a far-reaching austerity package with sweeping cuts and tax hikes in an effort to meet the tough conditions of an €85 billion EU-IMF bail-out plan, an architecture of adjustment that will radically alter the very structure of how the country is run.

It is a plan that will hit every citizen and sector of the Irish economy, but will hit working people, students and low-income earners the hardest, a move that has already provoked both a deep fury from many but also a bitter resignation amongst others.

Key measures include a slashing of welfare benefits, a hiking and broadening of income taxes, a sharp increase in university fees, the imposition of property taxes and water charges. Dublin hopes to save €15 billion over the next four years, including €10 billion in cuts and €5 billion in new taxes and other sources of revenue. The shocking sums come atop a total of €14.6 billion in austerity measures introduced in the wake of the wider economic crisis.

...

"As Ireland is a small, open economy, our economic recovery will be export-led. This plan stimulates exports, increasing productivity and rebuilding competitiveness," the government said in a statement. The plan forecasts economic growth of 2.75 percent of GDP on average over 2011-2014, and hopes this will result in the creation of some 90,000 new jobs.

Dublin appears to have won the day against pressure from other EU member states and the commission that it hike its ultra-low corporation tax of 12.5 percent, calling the rate "a cornerstone of our industrial policy".

Acquiescing to an IMF demand that labour costs be slashed, pay for minimum wage earners will be reduced by a full 12 percent, higher than the 10 percent that had been predicted, from €8.65 an hour to €7.65.

Low-income earners have in recent years enjoyed considerable relief from income tax, with as many as 45 percent of employees not paying at all. This era has come to an end, with income tax from now on to be applied on all who earn over €15,300 a year, down from the current €18,300. The government hopes to raise an additional €1.9 billion this way.

VAT will also be jacked up a total of two percent, spread over the last two years of the four-year package, while water charges will be introduced by 2014.

Social welfare spending is to be lacerated by €2.8 billion and student 'registration fees' will climb from €1,500 to €2000, an adjustment of 33 percent. The figure is not as high however as had been feared, with early reports suggesting a doubling to €3,000.

The cuts in 2011 will be worth some four percent of GDP and over the four-year period, equivalent to a full 11 percent.

As part of the cuts to spending, public service staff levels will be reduced by 24,750 positions and salary adjustments, including a 10 percent pay cut and a new pension scheme for fresh hires, will shave off €1.2 billion in costs over the next four years.

Property owners will now be subject to a tax for the first time, to be initiated in 2012, and business owners will be slapped with a local services levy.

Euobserver

Lisbon 2010

“This summit was not as exciting as other summits because we basically agreed on everything.”

Obama on the EU-US summit in Lisbon

Ireland to request bailout package from European Unio

Ireland's Finance Minister, Brian Lenihan, is to recommend the debt laden country make a formal application for a bailout loan from the European Union and the IMF. He gave no indication of how much will be needed but said it would not be a 'three-figure sum' - reports today have put figure needed as high as €120bn - but said it would be "tens of billions of euros".

A rescue from the EU, European Central Bank and International Monetary Fund has been wideley expected despite strong denials from Ireland. The recommendation will be made when the government meets later today to finalise a four-year plan to cut its budget deficit, he told RTE, the Irish broadcaster.

"The key issue is ensure we do not have a collapse of the banking sector," Mr Lenihan said in an interview. He acknowledged that Irish banks have become too dependant on ECB funds and had to be "weaned" a way from this funding. Mr Lenihan described the funding being applied for as 'a standby fund' and said not all of it would necessarily be drawn down.

Details of the bailout - or the conditions attached - will be the subject of discussion. However, the Irish government has been given a stark warning from some of the biggest American companies in Ireland on the risk of a mass exodus if the country's low corporation tax rate is raised.

Telegraph

Germany ups pressure on Ireland over business tax

Germany stepped up pressure on Ireland to raise its corporate tax rate on Tuesday with a senior finance expert in Chancellor Angela Merkel's party saying the Irish government could do so without hurting growth.

Dublin's 12.5 percent corporate tax rate, one of the lowest in the 27-nation European Union, has been a key part of its economic strategy and crucial to tempting big employers like Google Inc and Pfizer to Ireland.

Irish borrowing costs have surged in recent weeks and the country is now under pressure to ask the EU for financial assistance to help it cope with its fragile banks. It is unclear what kind of reforms the EU could demand in exchange for aid. But Michael Meister, a deputy leader in parliament and finance expert for Merkel's Christian Democrats (CDU), said the country needed to consider raising the levy. "The Irish rates are below the European Union average," Meister told Reuters on the sidelines of the CDU annual party congress in the southwestern city of Karlsruhe. "I therefore see here at least a possibility, given the high (Irish) budget deficit, to improve revenues without causing a negative impact on growth," he added.

The low rate is a source of irritation in some European capitals, including Berlin, which view it as unfair competition and there has been a real fear in Dublin that Europe would demand an increase. Meister's comments come one day after Elmar Brok, a senior CDU lawmaker who has sat in the European Parliament since 1980, said Ireland may have no choice but to raise the rate. "Ireland has two options to consolidate its budget -- cut expenses even further or increase taxes like the corporate tax rate," Brok said at the congress in Karlsruhe.

Ireland is relying on exports to help the economy grow by a forecast 1.75 percent next year and has repeatedly said it will not increase the rate it taxes the output of multi-nationals. A 2008 report by the Organization for Economic Cooperation and Development said that on average studies find that a one percentage point increase in the effective corporate tax rate leads to a 3.7 percent decline in foreign direct investment.
Reuters

Chinese premier pledges support for euro, EU trade

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EU agrees trade concessions to flood-hit Pakistan

The European Union has agreed to make trade concessions to Pakistan to help it overcome the impact of flooding, diplomats say. They say the deal could allow Pakistan significant reductions in duties paid on textile exports to EU countries.

Any move to grant Pakistan a waiver on textile duties would also require the consent of the World Trade Organisation (WTO) to ensure trade rules are not violated. The details will be determined in the coming weeks, with the European Commission working with the WTO to finalise how the concessions can be be implemented.

Meanwhile, some of the estimated 10 million Pakistanis displaced from their homes by the massive July monsoon floods have begun tentative salvage operations.

BBC

Orban Confirms Hungary Pledge to Meet European Union Budget Deficit Limit

Hungarian Premier Viktor Orban reiterated his Cabinet’s pledge to cut the budget deficit to no more than 3 percent of economic output in 2011 as the country braces for currency volatility.
“This year we can’t stretch further than 3.8 percent and for next year, I don’t suggest stretching further than 3 percent,” Orban said in a speech to Parliament, referring to the budget targets.

Hungary last week gave up a drive to raise next year’s deficit target, bowing to pressure from the European Union, which helped give a 20 billion-euro bailout ($26 billion) to the country two years ago. The government’s commitment to the target came after EU finance ministers told Hungarian officials during a meeting in Brussels last week that they had no other choice if the country wanted backing from the bloc, Economy Minister Gyorgy Matolcsy said on Sept. 8.

The Economy Ministry will submit the 2011 budget and future tax plans to the government in the middle of October, Matolcsy said today.

Bloomberg

EU expected to expand free trade agreements to South Korea

The European Union wants to expand its free trade agreements to include South Korea and is expected to reach an agreement between its trade ministers after the weekend.

The lifting of import tariffs would be a boost to the Korean automakers Hyundai and Kia Motors Corp. who are known for manufacturing low-cost vehicles.

The delay before the weekend and the objection to the free trade agreement comes primarily from Italy and its automaker Fiat Spa. Fiat fears unfair price competition if the import tariffs are lifted since the company operates in the same small to mid-size sedan market segment. The Italian automaker is also trying to carve out a niche in the US auto market now that it owns a 25% stake in Chrysler.

The free trade agreement would save EU exporters 1.6 billion euros and the exporters 1.1 billion annually based on all traded goods. The EU would benefit from the new free trade agreement as it would allow European exporters to more easily trade their goods in the South Korean market without specific standards or requirements.

examiner.com

Európai szemeszter

Az uniós országok pénzügyminiszterei jóváhagyták azt a javaslatot, mely szerint a jövő évtől kezdve minden tagállam még a nemzeti jóváhagyás előtt ismerteti a többi tagországgal költségvetési tervét.

A jövőre induló rendszer értelmében az Európai Bizottság jelentése alapján a tagállamok kormányait képviselő Tanács minden év elején meghatározza majd az unió előtt álló gazdasági kihívásokat, és stratégiai iránymutatásokat ad ezek leküzdéséhez. A tagországoknak ezt figyelembe véve április végéig szükség esetén módosítaniuk kell középtávú pénzügyi stratégiájukat, illetve nemzeti reformprogramjukat. Nyáron a tagállamok ugyancsak uniós iránymutatást kapnak a következő évre vonatkozó költségvetésükkel kapcsolatban. A rendszer - a miniszterek keddi brüsszeli üléséről kiadott közlemény szerint - lehetővé teszi, hogy fél éven át párhuzamosan figyelemmel kövessék a tagországok gazdaságpolitikáját, és időben kiderüljön, ha az eltérést mutat az uniós iránytól, illetve ha egyensúlytalanság van kibontakozóban.

Az uniós zsargonban európai szemeszternek nevezett új rendszert az EU-n belüli gazdasági együttműködés javításán dolgozó - Herman Van Rompuy EU-elnök vezette - munkacsoport dolgozta ki. A csoportot (amely gyakorlatilag a pénzügyminiszterekből áll) annak érdekében állították fel a tagországok állam- és kormányfői, hogy dolgozzon ki olyan szabályokat, amelyek lehetővé teszik a gazdasági válságok megelőzését, illetve könnyebb kezelhetőségét a jövőben. Van Rompuy a kormányfők október végi találkozóján számol be arról, milyen javaslatok születtek a munkacsoportban.

Sweden, Finland urge EU to open peace institute

Sweden and Finland are urging the European Union to create an independent peace institute to broaden the scope of the bloc's peacekeeping efforts around the world.

Swedish Foreign Minister Carl Bildt and his Finnish counterpart Alexander Stubb say an independent think tank could have better opportunities to help solve conflicts than traditional diplomacy. Their proposed institute would be modeled on the U.S. Institute of Peace, which is funded by the U.S. Congress but run by an independent board.

The ministers sent a letter with the suggestion to EU foreign policy chief Catherine Ashton on Friday. They said they hoped to get support from other EU member countries for the initiative.

EU, Euro Zone GDP posts fastest growth in four years

Gross Domestic Product in both the European Union and the Eurozone increased 1 percent during the second quarter of 2010, compared with the previous quarter, according to first estimates released by Eurostat. The figures show the EU and the Euro Zone have rebounded strongly as compared to the first quarter of the year. According to the statistical office of the European Union, growth rates in the first quarter of 2010 were 0.3 percent in both zones.

GDP growth in the EU and the euro common area was the fastest in four years, outstripping rivals United States and Japan. In comparison, the United States GDP increased 0.4 percent during the second quarter of 2010, after 0.9 percent rise in the first quarter of 2010. In Japan, GDP rose a nominal 0.1 percent in the second quarter of 2010, after 1.1 percent growth in the previous quarter.

Link

Germany and France lead way in 'two-speed recovery'

The economic recovery of the eurozone slightly lost its momentum in August, with most of the growth dependent on the performance of Germany and France, a purchasing managers' index survey published on Monday (23 August) showed.

According to the preliminary figures from Markit, a UK-based research firm, the eurozone composite output index, which measures activity across the private sector, including the manufacturing and services sectors, fell to a two-month low of 56.1 in August, down from 56.7 in July.

While the outcome of the whole single currency bloc is "solid," Markit wrote in a press release, there are "worrying divergences" between national economies, as growth is largely dependent on Germany and France.

"Growth in the rest of the euro area slowed to near stagnation, and services even contracted again as austerity measures bite," Chris Williamson, the company's chief economist said.

There is little evidence to suggest that buoyant business conditions from France and Germany "are spilling over to the benefit of the periphery," he added, noting that this could spell further divergence in the euro area's "two-speed recovery."

Flash estimates from the EU statistic office Eurostat, published on 13 August, confirmed Germany as a leader of Europe's economic recovery with a GDP growth rate of 2.2 percent in the second quarter of 2010, the best German result since re-unification in 1990. France's GDP increased by 0.6 percent, while Spain, Italy and Portugal each reported increases of less than 0.5 percent. The EU's overall growth was 1.7 percent.

Euobserver

Germany turbocharges EU economy

The strongest economic growth in Germany in two decades powered Europe's economic recovery ahead of the United States. The eurozone economy grew by 1 percent in the second quarter, its biggest quarterly expansion since the second quarter of 2006, the European Union's Eurostat statistics agency said Friday.

...

Beating all analyst forecasts, Germany's economy in the second quarter of 2010 grew by 2.2 percent compared to the first three months of the year, its fastest growth in two decades. In comparison with the same time last year, Germany's economy grew by 4.1 percent, the Federal Statistical Office said Friday.

Link

France proposes EU reaction force for natural disasters

French President Nicolas Sarkozy has called for the EU to set up a joint rapid reaction force to handle natural disasters such as earthquakes, wildfires and floods. In a letter to European Commission President Jose Manuel Barroso published on Sunday (15 August), Mr Sarkozy addressed the issue of the EU's ability to react under its own name in connection to the recent floods in Pakistan.

"It seems essential, for obvious political and humanitarian reasons, that Europe shows its solidarity with the Pakistani people visibly. The interest of Europe is also to ensure the development and stability of this country," he wrote. Following the earthquake in Haiti and wildfires in Russia, says the letter, the EU "must take the necessary measures and build a real EU reaction force ... that draws on the resources of the member states." France is to draw up proposals for the force in the near future, it adds.

Paris announced Sunday that a plane with 60 tonnes of humanitarian aid will be sent to Pakistan, with Mr Sarkozy saying France is prepared to use its Nato military forces to help transport the aid. France has already allocated €1 million to Pakistan since the start of the floods, which are estimated to have affected 20 million people.

Last Wednesday (11 August), the commission said it would provide Pakistan with €10 million in immediate emergency aid, in addition to €30 million allocated in July. EU foreign ministers are to also discuss a long term aid plan for Pakistan at an informal meeting in September.

With wildfire smog returning to Moscow over the weekend, Russia itself indicated it would be interested in joining a multilateral crisis response force. "The United States and the EU have now come to the same conclusion. I think we will come to this, and such capabilities will have to be established," he told the Ria Novosti news agency.

Euobserver Link

Slovakia: No Funds for Greece Bailout

Slovakia’s parliament rejected the nation’s participation in a loan for Greece, ending the European Union’s unity in handling the sovereign-debt crisis. The 69-1 vote, with 14 abstentions, reversed a decision by the previous Cabinet to lend Greece 816 million euros ($1.1 billion). Prime Minister Iveta Radicova's month-old government opposed the aid, saying poor countries shouldn’t pay for the profligacy of richer peers.

“The Slovak share is small, so it shouldn’t have much impact on the big picture,” said Timothy Ash, head of emerging markets research at Royal Bank of Scotland Plc in London. “On the other hand, the rejection is clearly a disappointment for the European Commission as Slovaks are thinking outside the box.”

Olli Rehn, the EU’s economic affairs commissioner, called Slovakia’s decision a “breach of the commitment” the previous government made as part of the so-called eurogroup of countries. “The eurogroup’s decision was a crucial act at a critical moment to safeguard financial stability of the euro area as a whole, including Slovakia,” Rehn said today in a statement. “I can only regret this breach of solidarity within the euro area, and I expect the Eurogroup and the Ecofin Council to return to the matter in their next meeting.”

Slovak Finance Minister Ivan Miklos has said EU fiscal rules should be changed to allow for the default of euro-member nations. Slovakia, the euro region’s poorest member by per- capita gross domestic product, was asked to pay too large a share of the Greek loan package, he said July 30.

“Many people in Germany and rich EU countries would have a lot of understanding for the Slovak position,” Ash said. “It shouldn’t be inevitable that every country gets a bailout.”

Earlier, lawmakers approved Slovakia’s participation in the European Financial Stabilization Facility, an entity that would sell debt secured by 440 billion euros in national guarantees and use the proceeds to provide loans to distressed euro-region members. Slovakia’s share in potential guarantees amounts to 4.4 billion euros.

Bloomberg

Megkezdődnek a csatlakozási tárgyalások Izlanddal

Az Európai Unió általános ügyekkel foglalkozó Tanácsa tegnap (2010. július 26.) zöld utat adott az Izlanddal folytatott tárgyalások megkezdésének – a skandináv ország csatlakozásáról szóló egyeztetések ma veszik kezdetüket egy kormányközi konferencia keretében.

Euvonal

Czech Fiscal Plans

The Czech Republic’s credit rating may be increased if the new government delivers on its promise to cut the budget deficit, Moody’s Investors Service said, pushing the koruna up as other east-European currencies fell.

The three-party government, named on July 13, has pledged to reduce the public-finance deficit to the European Union limit of 3 percent of gross domestic product by 2013, from the 2010 target of 5.3 percent. Moody’s rates the Czech Republic A1, its fifth-highest investment grade, with a stable outlook. “If we see a resumption of real convergence towards core Europe that could put upward pressure on the rating,” Dietmar Hornung, a senior sovereign-risk group analyst at Moody’s, said in a July 16 interview. “And if the fiscal plans were to be implemented as planned and result in stabilization” of debt ratios “that would also be reassuring.”

The deficit widened last year as the global economic crisis cut demand for Czech exports, including cars made by the local units of Volkswagen AG and Hyundai Motor Co., slashing tax revenue. The EU is increasing penalties on members that flout budget rules after Greece’s spiraling deficit undermined confidence in the euro.

The Czech Republic’s debt rose to 35.4 percent of GDP last year, from 30 percent in 2008, less than the 60 percent limit for joining the euro.

“The Czech Republic is acting as a stabilizing element in the region,” said Prague-based Raiffeisen Bank analyst Michal Brozka in a note to clients, referring to Hornung’s comments. The new government has 118 seats in the 200-member lower house of parliament, giving it the strongest majority since the country became an independent state in 1993. That creates “preconditions for removing the gridlock” that hampered efforts to overhaul government finances, Hornung said.

The Finance Ministry forecasts the economy will grow 1.6 percent this year and 2.3 percent in 2011, after a 4.1 percent contraction in 2009. The European Commission, the European Union’s executive arm, estimates the euro area’s economy will grow 0.9 percent this year and 1.5 percent in 2011.

Businessweek

European IT Research Gets €1.2 Billion From EU

The European Union is set to add €1.2 billion (US$1.5 billion) in funding for IT research in Europe, and about half the amount is earmarked for robotic systems, next generation network and service infrastructures, electronic and photonic components and digital content technologies.

Emphasis will be placed on technologies that address societal challenges such as climate change, energy and food security, health and an aging population, said Commissioner Máire Geoghegan-Quinn as she announced the new funding on Monday.

Link

A legbefolyásosabb tagállamok a 30 százalékos széndioxid-csökkentés mellett

Az Egyesült Királyság, Franciaország és Németország miniszterei együtt szólították fel az Európai Uniót, hogy emelje 30 százalékra a 2020-ra megállapított kibocsátás-csökkentési célt.

Az EU jelenlegi célszáma nem lesz elég a zöld innováció serkentésére és Európa versenyben tartására az ún. „tiszta” technológiák terén, nyilatkozta Chris Huhne, az Egyesült Királyság energiaügyi és klímaváltozásért felelős minisztere, Nobert Röttgen, a német környezetvédelmi miniszter és a francia környezetvédelmi miniszter, Jean-Louis Borloo a Financial Timesnak címzett levelükben.

Az Európai Unió 2008 végén fogadta el energia- és klímacsomagját, melyben azt vállalta, hogy 2020-ig 20 százalékkal csökkenti az üvegházhatást okozó gázok kibocsátását. Az EU három legbefolyásosabb tagállamának miniszterei első alkalommal fogtak össze, hogy az egyoldalú 30 százalékos cél mellett érveljenek.

„Ha a 20 százalékos célhoz ragaszkodunk, Európa valószínűleg elveszti a versenyt az alacsony széndioxid-kibocsátású [low-carbon] világban, olyan országokkal szemben, mint Kína, Japán, vagy éppen az Egyesült Államok, melyek mind vonzóbb környezetet próbálnak teremteni a low-carbon befektetések számára” – írták a miniszterek.

Ez az elmozdulás a német álláspont jelentős változását jelzi, Berlin korábban az EU hivatalos álláspontját támogatta, mely szerint a 30 százalékos kibocsátás-csökkentést csak akkor kellene megvalósítani, ha más iparosodott országok hasonló mértékű kötelezettségeket vállalnak az ENSZ tárgyalásokon az új klímaegyezmény tárgyalásai során.

A Bizottság májusban kiszámította, hogy a recesszió miatt a 30 százalékos csökkentés most csak 11 milliárd euróval kerülne többe, mint amire a tagállamok két évvel ezelőtt vállalkoztak, amikor a 20 százalékos célt megállapították. Connie Hedegaard klímavédelemért felelős európai biztos ugyanakkor úgy vélekedik, hogy a célszám emelésének most nem lenne értelme, mert szerinte a feltételek még nem megfelelőek ehhez.

Az európai üzleti körök vehemensen ellenzik a klímavállalások emelését, azzal érvelve, hogy ezzel versenyhátrányba kényszerítenék az uniós ipart. „Rossz jelzést küldene az európai ipar számára a gazdasági válság idején” – jelentette ki Jürgen R. Thumann, a Business Europe üzleti lobbi elnöke.

Euvonal

Romania to Raise Taxes

Romania said it would raise taxes to shore up state finances as it seeks to qualify for continued help from the International Monetary Fund and other lenders and reassure jittery markets focused on government spending and debt. Cabinet ministers approved the tax increase at an emergency meeting Saturday in order to plug a hole in the budget created Friday when the country's highest court declared that government-imposed pension cuts were unconstitutional.

Friday's court ruling, which called into question the government's ability to carry out its austerity plans, jolted markets and pushed the Romanian currency, stocks and bonds sharply lower. The currencies of neighboring Hungary and Poland also lost ground on fears those countries could have trouble curbing deficits. The cabinet's decision to boost the value-added tax to 24% from the current 19% will solve the immediate problem of holding the government budget deficit to the promised 6.8% of gross domestic product. But it is also likely to serve as a further break on economic expansion in a country where GDP fell more than 7% last year.

More...

EU greenlights Estonia eurozone entry in 2011

Leaders of the 27 European Union nations on Thursday gave their green light for Estonia to adopt the troubled euro currency as of January 1, 2011.

According to the latest EU estimates, Estonia will post a public deficit amounting to 2.4 percent of gross domestic product this year and debt of 9.6 percent of GDP -- levels which most of Europe can only dream of. However, the European Central Bank has warned Estonia that it could struggle to keep inflation under control once it joins the eurozone.

The country shifted rapidly from a communist command economy to the free market after breaking from the crumbling Soviet bloc in 1991 and its economy began to grow quickly, especially after joining the European Union in 2004. Hit by the global crisis in 2008, Estonia's government slashed public spending to confront the crisis and maintain its drive to switch from the national currency, the kroon, to the euro. The Estonian kroon was created in 1992 to replace the Soviet ruble. First pegged to the German mark, it was then linked to the euro in 2002 and its rate has not changed since

AFP

EU invites Iceland to membership talks

European Union leaders agreed Thursday to open membership negotiations with Iceland despite differences over whale hunting and a bank collapse that hit British and Dutch investors. European heads of state and government meeting in Brussels gave Iceland candidate status less than a year after it applied to join the 27-nation bloc.

Britain and the Netherlands said the talks should go hand in hand with negotiations over demands that Iceland reimburse compensation paid out by those two countries to citizens who held accounts at the failed Icesave bank. "My government is fully committed to resolving this issue," Johannesson said. "It's a bilateral issue."

Dutch Prime Minister Prime Minister Jan Peter Balkenende said that while his country wasn't blocking the start of Iceland's membership negotiations. "before it can become a member, it will have to fulfil its obligations toward Britain and the Netherlands."

The Icelandic authorities will also have to make extensive moves towards shutting down their controversial whaling industry before they can think of taking their seat in Brussels, as European rules ban whale hunting.

Iceland's application to join the European Union and adopt the euro as its currency, which it lodged in July 2009, could also stumble on the issue of access for European fleets to Icelandic fishing waters.

But potential problems are not only with its would-be partners. An opinion poll this week showed a substantial majority of Icelanders want their government to tear up the EU application form. A national referendum will have to be held before Iceland can join the EU club. In a March referendum Icelanders massively rejected a deal to pay Britain and the Netherlands billions for their losses in the collapse of the Icesave bank.

It was only after the global financial hurricane battered its banks, forced its currency down and pushed it to the International Monetary Fund cap in hand that Reykjavik decided to apply for EU membership.

However European capitals see Iceland as a natural fit for the EU, as long as the obvious hurdles can be overcome. "There are a lot of conditions to be fulfilled but in due course Iceland can become a member of the club," said EU president Herman Van Rompuy.

AFP

Tőkés Lászlót az EP alelnökévé választották

A néppárti frakció jelöltjét, Tőkés Lászlót az Európai Parlament egyik alelnökévé választották kedden (2010. június 15.).

Tőkés Lászlót 334 szavazattal, 287 tartózkodás mellett választották a tizennégy alelnök egyikévé, miután a korábbi magyar EP-alelnök, Schmitt Pál lemondott európai parlamenti mandátumáról és a Magyar Országgyűlés elnöke lett.

Az alelnök - csakúgy, mint az elnök - irányítja az Európai Parlament és szervei (az Elnökség, illetve az Elnökök Értekezlete) munkáját, valamint vezeti a plenáris ülésszakokon folytatott vitákat. Amennyiben az elnök nincs jelen, vagy akadályoztatva van hivatali kötelességei ellátásában, illetve ha részt kíván venni valamilyen parlamenti vitában, az egyik alelnök veszi át az elnöklést. Az elnök bármely megbízatást átruházhat az alelnökökre, például a Parlament képviseletét ünnepi alkalmakkor vagy eseményeken. (Az alelnökök feladatait az EP Eljárási Szabályzatának20. cikke rögzíti.)

Euvonal

Franco-German relations hit new low

The French president has surrendered to the German Chancellor's demands on EU economic governance and her idea of "red cards" for member states that break spending rules set in Brussels. Mr Sarkozy had been determined to create an "economic government" of the 16 eurozone countries with a powerful secretariat to coordinate national budgets, tax and spending.

...

President Sarkozy was then bludgeoned into accepting a German ultimatum that euro zone states that persistently breach budget deficit limits should have their voting rights suspended on economic issues, even if that requires changing the EU treaty. Previously, the issue of treaty change has been taboo for Mr Sarkozy who fears a French referendum. "If a treaty change is needed we will propose it," he conceded in Berlin.

Read more...

Centre-right coalition set to take over in Slovakia

Slovakia's governing Smer-Social Democracy have boosted their support by six percent in the weekend's general election to win 62 seats, far and away the most popular party. But current Prime Minister Robert Fico will most likely not return to power, as support for his two hard-right coalition partners slumped, and all four centre-right opposition parties have ruled out working with his centre-left group.

On Monday (14 June), Slovak President Ivan Gasparovic approached Mr Fico, asking him to form a government without a majority in the 150-seat chamber. However, despite the president's move, the opposition parties, with a total of 79 seats, have already launched coalition talks among themselves.

Smer won 36 percent of the vote, almost double the next closest party, the conservative Slovak Christian and Democratic Union (SDKU-DS) of sociology professor Iveta Radicova, the likely next prime minister, who won 15.4 percent, down some three percent from the last general election in 2006. The free-market liberals of Freedom and Solidarity (SaS) - who are strongly pro-business but also favour drugs liberalisation and same-sex marriage - came second on 12.1 percent, followed by the country's second Christian Democratic party, the Christian Democratic Movement (KDH) of former EU education commissioner Jan Figel on 8.5 percent, and Most-HID, an ethnic Hungarian grouping, on 8.1 percent.

The four parties should have little trouble working together, although there are frictions between the two Christian Democratic groups.

Mr Fico's main coalition partner, the extreme-right Slovak National Party, slid 11 seats down to nine on 5.07 percent - only barely above the five-percent threshold required to enter the Narodna rada, while the nationalists of former prime minister Vladimir Meciar, the Movement for a Democratic Slovakia (LS-HZDS), won no seats at all.

The priorities of what will likely be a highly fiscally conservative government will focus on slashing spending in what is already the poorest country in the euro area. The country's budget deficit was 6.8 percent in 2009, well above the three-percent limit for eurozone members.

Euobserver

Hungarian Leader Announces 29-Point Budgetary Plan

The prime minister of Hungary, Viktor Orban, introduced a mix of cost-cutting and tax measures Tuesday, including cuts in public-sector wages and new levies on banks, as part of its efforts to reassure jittery investors that the country could reach its budgetary targets.

“The time has come to replace the country’s old economic system with a new one,” Mr. Orban said, introducing the measures before Parliament, which was expected to approve them...

Link to the NYT

Germany moves to save $96 billion

Germany will cut welfare benefits, introduce new taxes and shed government jobs to save as much as euro80 billion ($96 billion) through 2014 and set an example for the rest of Europe, Chancellor Angela Merkel said Monday.

The wide-ranging savings package finalized by the Cabinet includes trims in social programs such a subsidy for new parents who stay home, more taxation for the nuclear power industry, and delaying the building of a replica of a Prussian palace in the heart of Berlin.

Merkel said as many as 15,000 federal government jobs could be shed through 2014.

In addition, the government wants to levy a special charge on passengers flying from German airports until aviation is included in an international carbon dioxide emissions trading scheme. Looking farther ahead, the Cabinet said it hopes to save money by reforming the military and will consider trimming the 250,000-strong force by up to 40,000.

The new nuclear tax is aimed at netting euro10 billion throughout 2014, but the bulk of the savings will come from the welfare budget — a total of euro30 billion.

AP

Képviselőcsere

Schmitt Pál fideszes EP-képviselő helyét Pelczné Gáll Ildikó veszi át az Európai Parlamentben; Balczó Zoltán jobbikos képviselőt pedig Kovács Béla váltja, miután Schmitt és Balczó hazatérnek a magyar törvényhozásba, mert az áprilisi választáson a magyar Országgyűlésben is mandátumot nyertek.
Euvonal

Hungary’s Orban Assumes Power

Viktor Orban returned to power as Hungary’s prime minister after eight years in opposition, pledging to accelerate economic growth in the first European Union member to obtain a bailout in the credit crisis.

Orban has yet to unveil details of his economic policy plans. He will have to balance pledges to cut taxes and boost growth after the worst recession in 18 years with investor concern that the new administration will loosen fiscal policy at a time when the euro area’s debt crisis prompts countries from Greece to England to cut spending to defend the euro.

“Fiscal risks in Hungary are particularly high and the government appears to be shifting its focus away from budget responsibility at a time when the euro zone is mired in a sovereign debt crisis,” Neil Shearing, a London-based emerging- market economist, said in a note to clients this week.

The Cabinet will place job creation and growth above budget discipline, Gyorgy Matolcsy, the new Economy and Finance Minister, said during a parliamentary committee hearing on May 25. Hungary can only “outgrow” its debt level, the highest among the EU’s eastern members at an estimated 79 percent of gross domestic product this year, he said, referring to lowering the ratio by accelerating growth.

Bloomberg

$30 Billion of Budget Cuts

Prime Minister Silvio Berlusconi said Italy’s planned 24.9 billion euros ($30.4 billion) of budget cuts over the next two years are “absolutely necessary” to defend the euro.

The measures are part of a European effort to convince investors the region can tame budget deficits and shore up the euro, which has fallen 15 percent this year. The package aims to reduce Italy’s budget gap an additional 1.6 percent of gross domestic product to bring the shortfall within the EU limit of 3 percent of GDP in 2012 from 5.3 percent last year.

Italy’s cuts include a three-year wage freeze for civil servants, a 10 percent budget cut for ministries, 4.5 billion euros in reduced transfers to regional governments, a partial amnesty on illegal construction and a crackdown on tax evasion.

Berlusconi said that while public spending that accounts for about half of GDP needed to be scaled back, the measures also aim to combat tax evasion and rein in the underground economy. Those steps include requiring the use of credit cards, checks or other traceable means for any transactions of more than 5,000 euros. Italy misses out on about 100 billion euros a year in unpaid taxes and that helps create Europe’s second-biggest underground economy after Greece, worth about 270 billion euros, or 22 percent of GDP, Berlusconi said. The plan also calls for a crackdown on false disability claims. Italy pays 16 billion euros a year in benefits to 2.7 million people claiming disabilities, Finance Minister Giulio Tremonti said.

http://www.businessweek.com/news/2010-05-26/berlusconi-says-30-billion-of-budget-cuts-needed-to-save-euro.html

Mentőcsomag az euró elleni spekulációs támadások elhárítására

Az uniós tagállamok pénzügyminiszterei hétfő hajnalban, Brüsszelben a közös fizetőeszköz, az euró védelmében több milliárdos mentőcsomagot szavaztak meg. Az 500 milliárd eurós csomagról szóló döntés a közös valuta elleni spekulációs támadások elhárítását célozza.

A csomag részben hitelről, részben hitelgaranciáról szól. Ebben az összegben nincs benne azonban az a hitelkeret, amelyre szükség esetén - vagyis ha fizetési gondjai támadnának az eurózóna valamelyik országának - a Nemzetközi Valutaalaptól (IMF) számítana az Európai Unió.

Az IMF-pénz további 220 milliárd eurót jelenthet, vagyis összesen 720 milliárdos lenne a teljes mentőcsomag értéke. A megbeszélésekről korábban kiszivárgott hírek arról szóltak, hogy a németek "csak" mintegy 100 milliárd eurónyi IMF-pénzkeretre számítanának.

Az 500 milliárd úgy tevődik össze, hogy 50 milliárdról 110 milliárdra - vagyis 60 milliárddal - növelik azt a hitelkeretet, amely eddig csupán az eurózónán kívüli uniós tagállamok megsegítésére szolgált az Európai Bizottság közreműködése révén, de ezentúl a közös pénzzel fizető országok is részesedhetnének belőle.

A további 440 milliárdot az euróövezet országai bilaterális támogatás formájában bocsátanák rendelkezésre. A mentőmechanizmus a tagországok reményei szerint megakadályozhatja, hogy a görög pénzügyi válság az euróövezet más országaira is átterjedjen.

A tanácskozás versenyt futott az idővel, hogy a megállapodást még a főbb ázsiai piacok nyitása előtt elérjék, és azoknak pozitív üzenetet küldjenek.

Euvonal

ECB suspends rating threshold for Greek debt

The European Central Bank on Monday said it would suspend the application of the minimum credit rating threshold in the collateral eligibility requirements for credit operations in the case of debt instruments issued or guaranteed by the Greek government. This suspension will stay in place "until further notice."

On Sunday, the Greek government approved an economic and financial adjustment program, under which it would receive 110 billion euros from the European Union and the International Monetary Fund.

The ECB said the program was "appropriate." "This positive assessment and the strong commitment of the Greek government to fully implement the program are the basis, also from a risk management perspective, for the suspension announced herewith," the central bank said.

The suspension applies to all outstanding and new marketable debt instruments issued or guaranteed by the Greek government.

Greece Gets Aid, Promises Austerity

Euro-zone countries and the International Monetary Fund, seeking to halt a widening European debt crisis that has threatened the stability of the euro, agreed to extend Greece an unprecedented €110 billion ($147 billion) rescue in return for Draconian budget cuts.

Under the three-year agreement announced here late Sunday, Greece would receive €80 billion in loans from other euro-zone members and €30 billion from the IMF. The planned rescue is the largest ever attempted by the IMF and a first for the 16-member euro zone. It still requires final approval from national governments.

The bailout removes the worry that Greece won't meet its immediate funding needs—€8.5 billion in borrowings due May 19. But it introduces fresh questions, among them whether the country can bear the harsh budget-cutting measures that are the price of the aid.

The prospect of a rescue has been controversial in Europe. Some euro-zone countries, led by Germany, worried that a bailout would set a dangerous precedent by encouraging other members to flout the bloc's deficit and debt rules. A rival faction, led by France, favored speedy intervention, viewing the crisis as a moment of truth, both for the 11-year-old common currency and the broader European Union. The divide delayed action, which some critics say worsened the crisis by allowing it to spread to other countries, raising concerns about the cohesion of the euro zone.

Even with the austerity measures, Greece now projects that its debt, which last year stood at 115% of its gross domestic product, will surpass 140% by 2014 before it begins declining. That is worse than was believed even a few weeks ago. The budget cuts will slash the deficit from 13.6% of GDP last year to 8.1% this year. Economic output will fall 4% this year, Greece says.

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Link

Debt-web in europe

Germany says Europe needs its own rating agency

Germany's Foreign Minister says the European Union should create its own rating agency because of the financial crisis. Guido Westerwelle on Thursday told "WAZ" newspaper group the EU "should counter the work of rating agencies with efforts of its own."

Westerwelle said rating agencies must not develop, sell, and rate financial products all at the same time. He said such conflicts of interest must be ruled out.

Peter Bofinger, a member of the government's independent economic advisory panel, criticized Standard & Poor's move to lower the ratings for Greece and Portugal. The economist told the "Welt" newspaper that "we should not make the welfare of Europe dependent on rating agencies," pointing to their failure to spot problems ahead of the financial crisis.

AP

EU Sovereign Debts Exploded In 2009

Recent predictions by ECB staff that warned of 16 years of pain before sovereign debt levels in the Eurozone would recede to the treaty level of 60% are getting backed up by the accelerating trajectory of the European debt pile-up, new Eurostat data shows. Desperately trying to immunize their countries against the Eurozone recession 2009, governments have embarked on a spending spree that resulted in an increase of public debts by a breathtaking 225% in 2008 and and an equally horrendous 211% in 2009, when they took on new debts of € 565 billion after €181 billion a year earlier.

So far these new stones around taxpayer's necks have not yet resulted in more than a modest bounce back in some industries that may find an explanation in the most recent decline in construction activity.

More...

Greek Debt Costs Climb as Talks With IMF, EU Begin

Greece took a further battering from financial markets Wednesday as government officials began talks in Athens with the International Monetary Fund and the European Union over conditions for a package to help rescue the country from its debt crisis. Interest rates on Greek 10-year bonds rose above 8%, the highest since Greece joined the euro in 2000, and the euro itself weakened.

Meanwhile, other bond markets around Europe displayed nervousness following a warning from the IMF that Greece's government-debt troubles could spread to other nations. Big budget deficits that have followed the economic slowdown and financial crisis promise a glut of government bonds in all major Western economies.

Meanwhile, other bond markets around Europe displayed nervousness following a warning from the IMF that Greece's government-debt troubles could spread to other nations. Big budget deficits that have followed the economic slowdown and financial crisis promise a glut of government bonds in all major Western economies.

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The IMF said Greece's troubles could represent a new phase of the global financial crisis. "In the near term, the main risk is that, if unchecked, market concerns about sovereign liquidity and solvency in Greece could turn into a full-blown sovereign-debt crisis, leading to some contagion," the IMF said in its World Economic Outlook published Wednesday.

In a separate report Tuesday, the IMF said that Portugal, and to a lesser extent Spain and Italy, were likely to suffer most from Greece's debt problems. European banks are big holders of Greek debt and would also suffer knock-on effects if Greece couldn't pay its way.

http://online.wsj.com/article/SB10001424052748704133804575197353477880666.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsSecond

Bizottság vizsgálja a vulkánkitörés gazdasági hatásait

Az Európai Bizottság felméri a vulkánkitörés hatásait az európai gazdaságra - közölte José Manuel Barroso, az Európai Bizottság elnöke. A vulkánkitörés miatt számos uniós esemény megrendezése bizonytalan.

Barroso felkérte az uniós közlekedési biztost, hogy koordinálja az Európai Bizottság ezzel kapcsolatos lehetséges válaszait, és teljeskörűen értékeljék a vulkáni hamufelhő gazdasági hatásait, különösen a légi iparra gyakorolt hatásokra tekintettel. Barroso szerint fontos, hogy minden szóba jöhető intézkedést európai szinten hangoljanak össze.

A vulkáni hamufelhő miatt számos uniós rendezvény megrendezése kétségessé vált...

http://www.euvonal.hu/index.php?op=hirek&id=6487

EU mourns sudden death of Polish leader

The EU leadership remembered Polish President Lech Kaczynski on Saturday as a patriot to his nation, putting aside his eurosceptic views in the aftermath of his death in an air crash.

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Herman Van Rompuy, the former Belgian prime minister who is the European Union's first president, said the news of the crash in Russia that killed Kaczynski and a host of other Polish officials had left him "deeply upset".

http://dalje.com/en-world/eu-mourns-sudden-death-of-polish-leader/301469

EU to train Somali troops

The European Union has given the go-ahead for a military mission in Somalia, which reportedly aims to train Somali forces against local fighters.

The training mission known as 'EUTM' is led by Spain and involves around 100 troops plus several dozen additional staff. Germany and France have already committed troops to the mission and Britain is expected to participate.

The EUTM is expected to train around 2,000 Somali troops in coordination with international partners, in particular the United Nations, the African Union Mission in Somalia and the United States.

It is to start operation on April 7, mainly in Uganda, where some Somali forces are already stationed.

The goal of the mission is to strengthen Somalia's transitional government. However some members of the 27-nation bloc believe that without a long-term financial and political commitment, training Somali troops and providing them with guns could cause more problems than it will solve.

Somalia has had no effective government for 19 years. At least 21,000 Somalis have been killed since the start of 2007 due to ongoing violence and political conflicts in the country, 1.5 million have been uprooted from their homes, and nearly half a million are refugees in other countries in the region.

Link: http://www.presstv.ir/detail.aspx?id=122183&sectionid=351020501

Feloszlik a Nyugat-Európai Unió

Az Európai Unió 10 tagállama tegnap (2010. március 31.) közös közleményben jelentette be, hogy feloszlatják az európai védelempolitika egyik úttörő intézményét, a Nyugat-Európai Uniót.

A nyilatkozat felhívta a figyelmet arra, hogy az Európai Unió reformszerződésének, a Lisszaboni Szerződésnek a tavaly december elsejei hatályba lépésével új szakasz kezdődött az európai biztonság- és védelempolitika szempontjából. Az Európai Unióról szóló szerződés 42.7 cikke ugyanis kimondja, hogy ha az EU valamely tagállamának területét fegyveres agresszió éri, akkor a többi EU-tagállamnak kötelessége segítséget nyújtani minden rendelkezésre álló eszközzel (kölcsönös védelmi klauzula). E segítségnyújtásban a kötelezettségvállalásnak és együttműködésnek összhangban kell állnia a NATO-kötelezettségvállalásokkal, hiszen a a közös védelem alapját a NATO jelenti.

Az 1954. október 23-án létrehozott Nyugat-európai Unió a közös európai védelem megteremtését igyekezett elősegíteni, majd a közép- és kelet-európai rendszerváltást követően a válságkezelés felé fordult. Mivel a NYEU a NATO és az Európai Unió árnyékában nehezen találta helyét, már az 1999. júniusi kölni csúcson döntés született az EU-ba való fokozatos beolvasztásáról. Egy 2000. novemberi döntésnek megfelelően 2001. július elsejével a szervezet érdemi működése megszűnt, de névlegesen eddig nem számolták fel. A brüsszeli székhelyű szervezet parlamenti közgyűlése tovább működött Párizsban, mintegy hatvan alkalmazottal, évi 13 millió eurós költségvetéssel.

A NYEU-ban tíz teljes jogú tagország fogott össze: Németország, Franciaország, Nagy-Britannia, Olaszország, Spanyolország, Portugália, Görögország, valamint a három Benelux állam. További 18 ország „társult tag”, „társult partner”, illetve „megfigyelő” státust kapott, de valamennyiüket összekapcsolja egymással a NATO- és/vagy az EU-tagság.

http://www.euvonal.hu/index.php?op=hirek&id=6466

EU Welcomes Serbia's Srebrenica Apology

The European Union praised Serbia on Wednesday for acknowledging its troubled past after parliament in Belgrade apologised over the 1995 killing of thousands of Bosnian Muslims in Srebrenica.

Nearly 13 hours of debate that ended after midnight highlighted deep divisions about Serbia's wartime past at a time when the country aspires to join the EU. "This is an important step for the country in facing its recent past, a process which is difficult but essential for Serbian society to go through," EU foreign policy chief Catherine Ashton said in a joint statement with Enlargement Commissioner Stefan Fule. "This is not only important for Serbia, it is the key for the reconciliation for the whole region."

The Serbian resolution expressed sympathy to the victims and apologised for not doing enough to prevent the massacre, but stopped short of calling the killings "genocide." The measure was approved by 127 of the 149 deputies present in parliament. Some opposition parties left the chamber shortly before the vote.

"With this (declaration) the people of Serbia demonstrated they want to distance themselves from that monstrous crime," Serbian President Boris Tadic told a news conference.

The New York Times