EU news focus

EU news focus: 6-12 September 2013 – EP Plenary session, Greek economy, Citizenship, G20, car industry

EU News Focus

Internal affairs

The European Parliament’s plenary session

This week, the European Parliament held its plenary session in Strasbourg. The highlight of this session was the State of Union speech delivered by José Manuel Barroso, the President of the European Commission. Mr Barroso called upon “all those that care about Europe […] to speak up for Europe”. He talked about the significant progress in reforming Europe and the financial system since the beginning of the crisis, five years ago. He also expressed hope that the economic situation could continue improving in the coming months, pointing out several positive figures that justify showing some confidence in a recovery. Moreover, he mentioned the need to foster ties with neighbouring countries, especially those in Eastern Europe (e.g., Ukraine), since these countries must face Russian pressure. The President of the Commission called for more European integration, claiming that it is only by uniting that Europeans could continue promoting and defending their values, their prosperity and their interests. He declared that the key question ahead was: “Do we want to improve Europe, or give it up?” After that, he advocated a deeper and better integration to remedy the shortcomings of the current EU, challenging Eurosceptic people to put forward proposals to improve the union. On some issues (genuine Economic and Monetary Union, banking union, etc.), more competencies must be transferred to the EU, but the principle of subsidiarity should be fully respected: “Europe must focus on where it can add most value”.

Apart from listening to Mr Barroso’s speech, the MEPs were quite busy. In matters of international relations, they called for the end of violence and the return of democracy in Egypt and they adopted a resolution that does not exclude the recourse to deterrent measures. MEPs also called for the end of roaming fees by 2015, following the presentation of the telecoms package by the Commission on Wednesday. The first pillar of the banking union – a single supervisor for banks – was also approved by the EP, as well as tougher sanctions for financial markets manipulation. In matters of environment, MEPs called for a cap on traditional (or “first generation”) biofuels, based on food crops, and a switchover to advanced biofuels (e.g., those based on agricultural waste), in order to reduce greenhouse emissions, and they postponed a vote on including shale gas fracking in the Environmental Impact Assessment Directive. Finally, it is worth mentioning that MEPs voted a resolution asking for more “good quality traineeships and apprenticeships” to support youth employment.

Sources: European Parliament, European Commission, BBC, Le Monde.

Note: The whole speech is accessible here and we will publish an article about the #SOTEU in the coming days. Stay tuned for more information!

Economy

Is the end of recession in sight in Greece?

The Greek PM Antonis Samaras predicted that the Greek economy would finally return to growth next year. The GDP has contracted by nearly 25% in 5 years, despite two bailouts for an amount totalling €240 billion and many observers consider that the excessive austerity measures killed prospects of economic rebound in the past years. But the PM pointed to a change of political climate in Europe, claiming that talks were now about a “Grecovery” instead of a “Grexit” from the Eurozone. He also asserted that this year’s GDP would shrink by less than the forecast of 4.2% and that Greece would achieve a primary budget surplus (i.e., before payment of interests on debt) for the first time in many years. In addition, the GDP decrease in the second term of 2013 was the smallest since the third term of 2010, thanks to a rebound in the tourism sector. To further support the Greek economy, Mr Samaras asked the country’s creditors to lighten the debt burden. The PM declared that 2013 had been “the toughest and most critical” year for the country’s economy, but also “the most successful”.

At the same time, people protesting against cuts and job losses did not share the PM’s positive discourse, and the principal opposition party, Syriza, declared the speech was “delirious”. A review of the aid programme by Greece’s creditors is scheduled this autumn. The IMF predicts that an additional aid of €10-11bn is necessary; these may come at least partly in the form of a third rescue package by the Eurozone.

Sources: BBC, Les Echos.

Citizenship

The European Year of Citizens

There were various events interesting the European citizens this week, including President Barroso’s State of Union speech (cf. “Internal Affairs” above).

It is worth noting the following initiative announced by the Commission: a month of online debates on the Single Market, between 23 September and 23 October (‘Single Market Month’). The discussions “will focus on four themes: jobs (23-25 September), social rights (30 September to 2 October), banks (7-9 October) and e-commerce (14-16 October).” Discover more here.

If you want to understand better what the European Year of Citizens (EYC) is about, discover this infographic provided by the EYC Alliance (EYCA), which also offers you various possibilities to get involved in European civil society engagement thanks to varied activities such as workshops, debates, exhibitions, conferences, etc. Check out their website for more information!

Sources: Website on the European Years of Citizens, EYCA.

International Relations

Europe at the G20 summit in St Petersburg

Two main topics were discussed at the G20: Syria and economics. One was marked by the divisions of the gathered world powers; the other benefited from a broad agreement. It is interesting to notice that this observation also applies when only focusing on European members of the G20.

Regarding the first theme – Syria –, François Hollande led Europe’s pro-military camp supporting Barack Obama. David Cameron had a similar position, although hindered by the Parliament’s refusal to back an intervention. On the other hand, Germany literally refused to sign the declaration signed by 10 other members of the G20 (including all other European members), although there was no direct reference to military strikes, while Italy tried to explore a third way by calling for focusing on diplomatic solutions. The declaration drafted by the US strongly condemned the Syrian regime for using chemical weapons against its population and expressed support for the necessary measures to ensure the enforcement of the prohibition on using chemical weapons. Angela Merkel indicated that she wanted to focus on the political process, that the UN should remain “in the game” and that countries such as Russia and China should cooperate to organise a peace conference in Geneva. France and other countries wanted to wait for the report of UN inspectors. Many countries, including Italy, would like a military answer only if there is a UN mandate, which is nearly unimaginable. The European disagreements on the strategy were clearly visible, and this may explain the weakness of the European foreign policy on the Syrian issue.

As to economics, world leaders agreed that the crisis was not yet over: global growth is still too weak, in particular because emerging economies face significant risks, due to the volatility of both capital flows (following the Fed’s announcement that it would start tapering its unconventional programme) and raw materials’ prices. Central banks will continue to act with the necessary caution and to provide clear forward guidance, in order to promote financial stability. Governments from emerging countries will also adopt measures aiming at meeting this goal. Moreover, excessive austerity has been criticised as harming the growth potential and should be more balanced with growth and job creation targets. Finally, the G20 agreed to tackle seriously the issue of tax evasion and aggressive tax planning. It expressed full support to an action plan put forward by the OECD, a think-tank of rich countries. So, some fiscal data will be automatically exchanged between the G20 countries by 2015. NGOs would like these measures to be extended to poor countries, which are the biggest victims of tax evasion. Finally, the G20 called for a better supervision of trusts and other legal arrangements aimed at reducing multinationals’ tax burden. European leaders were satisfied with the outcome: Enrico Letta, the Italian President of the Council (it is the equivalent to Prime Minister), declared that his country had done its homework and was not anymore under special supervision; Presidents Barroso (European Commission) and Van Rompuy (European Council) published a joint statement pointing out to Europe’s progress over the past years and to the positive initiatives adopted by the G20 to further stimulate growth and job creation.

Sources: European Commission, BBC, Le Monde (Syria, economics), Corriere della Sera (Syria, economics), Der Spiegel, El País.

Note: The fact that European disagreements were exposed to the international community is a mistake and shows once more how much progress is still needed towards a “European” foreign policy. Fortunately, Europeans finally agreed on a common position at a meeting of foreign ministers in Vilnius, last week-end. The final statement was very carefully worded, but at least it was adopted unanimously, after the disastrous image given in St Petersburg at the G20. So, European foreign ministers declared that there were strong presumptions that the use of chemicals weapons was the feat of the Syrian regime. They also agreed upon waiting for the report of the UN inspectors before taking further action. Germany finally expressed support for the declaration signed by eleven countries at the G20 which called for a “strong” reaction to the use of chemical weapons without expressly mentioning military options. Finally, the need of a political solution was also stressed in the communiqué. Better late than never… and let us hope that next time Europeans will act more as a union on the world stage!

Industry/Technology/Business

Is the end of the gloom coming for the car industry in Europe?

The minds are more relaxed at this year’s edition of the Frankfurt auto show (10-22 September 2013). Various CEOs of the car industry (both inside and outside Europe) forecast an end of the decline on the European market, despite a sales decrease of 6.6% in the first half of 2013. Daimler and Volkswagen reported profits for the second quarter of the year. Alan Mulally, Ford’s CEO, considers that the lowest point should soon be reached. Philippe Varin, his counterpart at PSA Peugeot-Citroën, a French carmaker particularly badly hit, even thinks that his group could increase its market share during the last quarter of the year. Analysts are uncertain about the future of the European car market: some expect a mere stabilisation, while others are more optimistic and predict a slow growth from next year onwards. Indeed, the context is still very difficult, characterised by a low GDP growth and an important rate of unemployment, and this harms consumption. Carmakers which are more dependent upon sales in Southern Europe may face more difficulties to rebound than carmakers more firmly established in the UK and Germany. Consultants such as AlixPartners reckon that Europe still suffers from massive overproduction (up to 3 million vehicles a year) and that more factory closures are unavoidable in the long term. Various strategies are tried by European carmakers: reducing costs, setting up international alliances, or the diversification of car models.

Sources: Le Monde, Reuters.

Next week…

Next week, several informal meetings of ministers will take place: Transport (15-16 September) and Energy (19-20 September).

For our readers who will be in Vilnius next week, note a free-entry exhibition on Cathedral Square to raise awareness of the European spatial programme, research and policy from the 17th to the 22nd of September.

Source: Lithuanian Presidency of the Council.

Pierre-Antoine KLETHI

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