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EU Heads Meet: Decisions On All Fronts

  • March 17th, 2013
  • Posted by 7thmin

council-building.jpgThe March summit of the European Union this year (14-15.3.13) took on the appearance of a working meeting, more than a crisis gathering;  perhaps a sign that the governments involved, though far from free of the financial crisis, have got the hang of handling it.

BUSINESS AGENDA FOR HEADS OF GOVERNMEN

Several matters were back on the table, at Brussels, including:

Disagreements over the civil war in Syria; Britain and France talking about arming the rebels against the Assad regime, most others sticking with present sanctions.

Deregulating regulations; a review of mandated procedures, like certain environmental or safety protections, said to be going too far and hampering small business. It is a favourite of the Cameron administration in the United Kingdom, wanting “small government”, and reviews also on taxation and agreements on trade. The agenda accords with the political interests of the Prime Minister, David Cameron, who is campaigning for a “small EU” to go with small government, focused on business and economic cooperation mainly, with no federalism. (See, EUAustralia Online, “Vote on EU …”, 24.1.03). The President of the European Commission, Jose Manuel Barroso, welcomed the UK contribution, saying it put a focus on getting better transparency in  economic and financial management, better taxation (with emphasis on stopping tax evasion), and mobilising free trade in line with long-standing policies.

Adjusting the rules binding budget practices to standardising the Euro
, with in that case France forcing a concession.  Said a commentary from the BBC: “The 27 EU leaders agreed, after debating how to overcome mass unemployment and recession unleashed by three years of the euro zone’s sovereign debt crisis, to allow greater leeway for public investment when reducing government deficits.” That matched the ideas of President Francois Hollande, to “ balance productive public investment needs with fiscal discipline objectives”; providing a strategic stimulus, and backing off from all-out austerity in the drive to recover surpluses. (See, EUAustralia Online: “Managing Europe …”, 5.7.13; “Elections: France, Greece …”, 7.5.12).

Dealing with Russia. A speech by Mr Barroso, in particular, highlighted the importance of the large neighbour, fraught with problems of its own, while already closely bonded to the EU, especially through close ties between their respective economies.

LOAN GUARANTEES NOW EXTEND TO CYPRUS

An important side to the Russian story came out on Friday when the EU Finance Ministers met in a parallel session.

They took on the task of continuing to manage the sovereign debt crisis and its effects, this time by extending loan guarantees to the government of Cyprus.

The country had been helped along  by a large government loan from  Moscow (€2.5 billion; A$3.14-billion, xe.com, 17.3.13) , but also heavily whacked by having  done rather too much business with rich Russian depositors: too much expansion of its finance system, and concerns about extensive money laundering.

The Finance Ministers agreed to provide €10-billion (A$12.56-billion) in guarantees, making  Cyprus the fourth “Eurozone” country, users of the Euro currency, to come under that protective umbrella – packaged-in with a set of demands on state budgeting.

They added a requirement that others had not had to take on: not just the familiar set of strictures on very tight budgets, but also a measure directly linked to the banks, and their sometimes shadowy depositors – a one-off levy of up to 10% on all accounts.

Cyprus, with Malta was one of the “orphans” of Europe worried over by the statesmen who crafted the expansion of the European Union in the early 1990s; they were admitted to membership despite concerns over their size and, in the case of the divided island of Cyprus, political instability.

Like the other smaller, or weaker economies – Greece, Ireland, Portugal – Cyprus had gone in for expansion and borrowing while loan money was on cheap supply. Regulation was light. It made it worse that the finance sector was closely tied-in with banks in Greece, the first to come under pressure when the crisis hit.

nicosia.jpgWith the new levy, public anxiety about the fate of savings burst onto the streets on the weekend in Nicosia.

Parliamentarians came under pressure to rebut the measures in a vote; government leaders replying that it was the deal or disorderly bankruptcy for the state. In Moscow, the Russian President, Vladimir Putin, would declare the raid on deposits, so many of them held by his compatriots, “destructive” and “unfair”.
Worried depositors banged on the doors of banking houses; one man brought along some heavy machinery with a view to getting in.


cyprus-bbc.jpgSee VIDEO
, BBC report,   http://www.bbc.co.uk/news/world-europe-21814325

Smaller accounts, up to €100 000, would be up for a charge of 6.75%; those above, 9.9%.

BARROSO’S CALL: YOUNG PEOPLE AND JOBS

EU and youth unemployment

barroso-strasbourg-19-june-07.jpgThe following is extracted from the speech to the summit of Heads of Government , by Jose Manuel Barroso of the European Commission,  emphasising one dominating consequence of economic stress and austerity, the high levels of unemployment among young people:-

youth-jobs.jpgIn fact, in Europe, too many young people are asking if they will ever find a job or have the same quality of life as their parents.

And we need to give them a better prospect. Since January 2012 the Commission has been working with action teams in the eight Member States with the highest levels of youth unemployment. Together we have targeted EU financing to support job opportunities for young people and help SMEs get access to finance. The results have been positive. By the start of this year around €16-billion of EU funding had been mobilised – double the amount we first expected. Nearly 800 000 young people and 55 000 SMEs [Small and Medium Enterprises] are set to benefit. This is of course still work in progress.

But reversing the youth unemployment trend needs sustained and long term effort. Member States recently endorsed the Commission’s proposal for a Youth Guarantee giving every young European the promise of a job, further education, or work-focussed training at the latest four months after becoming unemployed. And in the recent budget negotiations the Commission fought to secure a large increase in funding for youth. Under the Erasmus programme more students will benefit from mobility opportunities. And the new Youth Employment Initiative will provide additional €6-billion in much-needed support for young people in regions with youth unemployment rates above 25%. The Commission has moved quickly on this and already this week made the proposals needed to make this Initiative a reality. And we expect that as soon as we have an agreement on the MFF, Member States and the European Parliament can reach a formal agreement, so that this programme can start up as soon as possible.

Another point we have analysed, and we spoke about yesterday, is that we simultaneously have high levels of unemployment and skill shortages. The shortfall in ICT professionals could reach 900 000 by 2015. Opportunities exist and we must train our young people to fill them. Last week the European Commission launched the Grand Coalition for Digital Jobs. Working in partnership with business, industry associations, and Member States, we are already collecting pledges on new jobs, internships, training places, start-up funding, and free online university courses. Business is a key player in helping ensure that both vocational training and more academic education are effectively meeting labour market needs.

EU and Russia

kremlin.jpgFinally, we had today, in the European Council as well, a good open frank discussion on our strategic partnership with Russia.

We need to move from a partnership of necessity to a partnership of choice

The case for engaging with Russia is overwhelming. They are our largest neighbour, our largest energy supplier, our third largest trading partner, a key player in our common neighbourhood and in other major international files, and in fact this year they will also be leading the G20 summit.

But we are also very important for Russia. We are their largest trading partner. 75% of the FDI, Foreign Direct Investment, in Russia, comes from Europe. And we are by far their biggest energy costumer. So as we see, we should do more with Russia, provided of course, Russia can also show the same interest in this kind of relationship. We expect Russia to be a trusted partner and uphold the commitments they have taken in the WTO, OSCE and Council of Europe.

Next week I will travel to Moscow together with members of the College to meet with the Russian Government to explore areas of cooperation of mutual interest.
Reference  

Luke Baker and Julien Ponthus ,”France, Italy see leeway on budget rules at EU summit”, Reuters, London, 14.3.13. http://www.reuters.com/article/2013/03/14/us-eu-summit-idUSBRE92D0MK20130314, (17.3.13).

José Manuel Durão Barroso, President of the European Commission, Statement by President Barroso following the final session of the European Council. Press conference/Brussels, 15.3.13.

European council, Brussels, European Council – European Council meetings. www.european-council.europa.eu/council-meetings, (17.3.13).

Robert Peston, Business Editor, BBC, London, in “Shock in Cyprus as savers face bailout levy”, 16.3.13. http://www.bbc.co.uk/news/world-europe-21814325,(17.3.13).

Jessica Phelan, Syria’s civil war, EU declines to give weapons, Global Post, Boston, 15.3.13. http://www.globalpost.com/dispatch/news/regions/middle-east/syria/130314/syrian-rebels-should-be-armed-say-france-ukce, UK, (17.3.13).

Mark Thompson, “Tiny Cyprus gets big EU bailout”, CNN, Atlanta, 16.3.13. http://www.money.cnn.com/2013/03/16/news/economy/europe-cyprus-bailout/, (17.3.13).

Times of Malta, Valletta, “EU summit ‘in line’ with PL’s electoral planks”, 16.3.13. http://www.timesofmalta.com/articles/view/20130316/local/EU-summit-in-line-with-PL-s-electoral-planks.461686, (17.3.13).

Voice of Russia, Moscow, “EU summit tackles Syria arms embargo”, 15.3.13. http://english.ruvr.ru/2013_03_15/EU-summit-tackles-Syria-arms-embargo/, (16.3.13).

Pictures  bbc

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