EU news focus

EU news focus: 1-7 November 2013 – UK in EU, misspending, a “de-facto Union”, immigration, digital single market

EU News Focus

In this week’s newsletter, we focus on the following five topics: the debate about the British EU membership; €6 billion misspending in the European budget; a report on what Europe cannot fully enjoy its strengths; disagreements about the reform of the immigration policy; and the need for a digital single market.  Enjoy the reading and share with us your opinion about these topics!

Internal affairs

The debate about the British EU membership

The Confederation of British Industry (CBI) fully entered the debate about the British EU membership by expressing during its annual conference the businesses’ will to remain in a reformed EU. It warned about being “out with no influence” rather than “in with reform”. According to the CBI, the membership of the EU adds yearly £78 billion to the British economy (£1,225/person). Among reforms called for by the British businesses, there is cutting red tape, facilitating e-commerce and removing EU directives affecting employment law. Business leaders warned that the City could lose its role as Europe’s financial capital if the UK were to leave the EU. They also warned political leaders to speak with carefully chosen words and not to use the EU issue as a scapegoat for other problems.

David Cameron, the British PM, indicated that his plan of renegotiating the EU powers before holding an “in-out” referendum was widely supported by the voters and that the support for staying within the EU was “wafer-thin”. However, he claimed in front of the CBI audience that he could win this referendum. Mr Cameron also asserted he had “a long-term strategy for Britain” and that it was important to keep the debate alive and to explain to citizens why the EU membership matters. Mr Cameron bets on significant reforms of the EU, but he will need his 27 partners to succeed and these have made clear that they would not tolerate more cherry-picking. So, Mr Cameron will have to suggest concrete improvements. He started with advocating a reduction of bureaucracy at EU level at the last meeting of the European Council. This more constructive attitude brought him the support of other Member States and parts of his agenda are supported by Germany and the European Commission.

Sources: BBC (Cameron at CBI, Gavin Hewitt), The Guardian, Der Spiegel, Les Echos.


€6 billion badly managed in 2012

The European Court of Auditors announced that the amount of misspent EU money had slightly increased in 2012 compared to the year before, reaching €6.6 billion (£5.5 billion). This represents 4.8% of the overall 2012 European budget, of which 80% is jointly managed by the European Commission and the Member States. The most affected areas of spending were rural development and the cohesion policy. Some cases of misspending are the absence of a public procurement policy or wrong declarations by beneficiaries of aid (which amount to fraud where the purpose was to circumvent the eligibility criteria). MEPs called upon the Commission, national governments and regional governments to urgently improve the situation. The Commission claimed that the Auditors’ report did not take sufficiently into account the efforts to correct past mistakes and recover misspent money.

The European Court of Auditors highlighted that the rate of error was not an indicator of fraud, inefficiency or money waste and that such an annual analysis of the regularity of public spending is not carried out by most national governments.

Sources: BBC, Les Echos.


The Europe we would like: the report on Raitre (Italy)

The Italian TV channel Raitre broadcasted on Monday evening a report about why the EU cannot fully enjoy its strengths. This report shows that Europe is “a de facto Union” which lacks, for now, internal and external cohesion: there are commercial imbalances within the Eurozone, there is no proper common foreign and defence policy and there is no common industrial policy. The report compares the USA and the EU on various topics – businesses, labour and industrial policies – to “understand what lacks for a more integrated Europe to think itself as a single economic and political entity, to optimise the use of its resources, to valorise the differences between Member States and to be solidary with those experiencing difficulties”. The whole report can be watched here.

Source: Corriere della Sera.

International Relations

The Commission disagrees with Member States about immigration

The immigration policy needs to be reformed, but how? The European Commission and the Member States seem to disagree on the answer to this question.

On the one hand, the Commission calls for a more open Europe and looks at the need for workers in some sectors and the long-term demographic challenges that Europe must tackle. The Commission thinks it is necessary to provide increased opportunities for legal migration within the EU, also by signing agreements with the home countries for migrants: better control of borders in exchange for an easier legal immigration process for students and workers from these countries. The Commission also reminds that the bulk of immigrants in the EU come to work.

On the other hand, national leaders are afraid of xenophobic reactions to more immigration and point to the lack of jobs and resources in their countries. The Commission’s proposal to create temporary visas for humanitarian reasons was immediately rejected by the Council. Due to the recent news, the focus is now on better protecting the Mediterranean border although only 10% of all immigrants use this way, and despite all the talks the Member States do not want to increase the budget of Frontex, the EU agency responsible for border supervision. Some MEPs criticise the lack of political will to truly address the issue. The European Council’s meeting in December will be the occasion for national leaders to discuss issues related to immigration, but no one expects big changes.

Meanwhile, in the UK, a study by University College London (UCL) showed that, contrary to popular belief and catchy media titles, immigrants make a substantial net contribution to the public finances. So, over the past decade, immigrants were much less (45% less) likely to claim benefits or tax credits than British natives and they also were slightly less likely to live in social housing. Furthermore, over the same time, immigrants contributed more in taxes than they received in benefits (this is very true for immigrants coming from the EEA – EU plus Iceland, Norway and Liechtenstein –, but it also applies for immigrants from the rest of the world), while the contrary happened with British people (they paid 11% less in taxes than they received in benefits). The study also found out that recent immigrants were more likely than native Britons to have a university degree, showing that the UK attracts highly-skilled migrants. These results came in contrast to political claims of “benefit tourism” which are supposed to justify a restriction of access to benefits for migrants.

Sources: BBC, El País.


Towards the digital Single Market

Neelie Kroes, Vice-president of the European Commission, argued for proactively adapting the European businesses to the realities of the digital world. She pointed to the changes that took place during the past months and years in the telecommunication sector, with former leaders such as Nokia and Blackberry being now in difficult financial situation and prey to rivals. Internet has now become a true economic sector and “since 2008, Europe’s app industry alone has generated 800,000 new jobs” thanks to many innovative SMEs. Mrs Kroes wants to spur European businesses and policymakers to stimulate Europe’s competitiveness and get rid of barriers to investment. The digital revolution does not affect only the telecommunication sector but many other economic sectors. The Vice-president of the Commission underlined existing strengths of Europe such “a strong high-tech research programme and 5G mobile, but to succeed Europe needs a telecoms single market in Europe.

Sources: British Influence.

Next week…

A conference on Vocational education and Training will take place in Vilnius on Tuesday and Wednesday.

The Political and Security Committee will meet on Tuesday in Brussels. It is a permanent body which forms part of the Council and is competent to monitor developments regarding the Common Foreign and Security Policy (CFSP).

The agenda of the EP for next week will be available here from Friday 8 November in the afternoon.

Sources: EP website, Lithuanian Council presidency website.

Pierre-Antoine KLETHI

2 thoughts on “EU news focus: 1-7 November 2013 – UK in EU, misspending, a “de-facto Union”, immigration, digital single market

  1. “The European Court of Auditors announced that the amount of misspent EU money had slightly increased in 2012 compared to the year before, reaching €6.6 billion (£5.5 billion)” < Yet again the EU auditors shine a light on the EU and its gross waste of tax European payers money. Its no wonder people are loosing faith in all EU institutions in Brussels.

    • I agree that it’s too much misspending. That being said, most governments do not even bother to measure the amounts misspent. Furthermore, contrary to the Member States, the EU cannot spend more money than it receives, so it does not make deficits, and this reduces the risks of “bad” spending. Finally, the Court of Auditors merely pointed out that procedures had not been respected when allocating these €6.6 billion; it does not say that the choice of spending such money is inappropriate.

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