Monthly Archives: April 2008

To the 23 official languages of the European Union can be added a 24th – Silviospeak.
Yes, Berlusconi is back and once again turning heads and headlines across Europe.
The incoming Italian premier has yet to form a government but has already irked Brussels on two issues: his defence of lossmaking airline Alitalia and the nomination of a Italy’s European commissioner.
The billionaire businessman helped wreck talks to sell Alitalia to Air France/KLM by holding out the prospect of an Italian takeover. Now, if local businessmen do not stump up the cash, he could just nationalise it, he said on Tuesday.
He invented a new word – “zignare” – to describe the hectoring of the Commission, which is anxious to ensure that the airline does not receive any more government subsidies, disadvantaging its competitors.
“If they continue hectoring, we could take a decision in which Alitalia could be bought by the state – by the state railway,” Berlusconi told a news conference. “It’s a threat, not a decision.” Some suspect it may also be a joke since the railway lacks the resources to take on the airline.
Jacques Barrot, the EU transport commissioner, has expressed doubts over whether an emergency 300m government loan complied with state aid rules. The Commission on Tuesday said that nationalisation would not pose a problem as long as the state did not pay above market rates for the 50.1 per cent of Alitalia it did not own. Given the lack of private buyers a market rate could be difficult to gauge.
Italy gave Jose Manuel Barroso, Commission president, a further headache on Tuesday when Franco Frattini, its commissioner, asked for his leave of absence to be extended until May 15. He took time off to campaign with Berlusconi and is expected to become Rome’s foreign minister.
Barroso last week said that if he resigned Italy would lose the sensitive justice and home affairs post, which temporary fill-in Barrot would retain. The new Italian would take Barrot’s transport portfolio. Rocco Buttiglione, Berlusconi’s last pick, (cd xref to beeb or our story) had to withdraw in 2004 after offending the European parliament with remarks about homosexuality and the role of women.
Patience with Italy is strained in Brussels. After his time spent with Berlusconi, it might be wise for Frattini not to return.

The results of a Commission consultation about the needs of small and medium-sized businesses – paving the way for a possible Small Business Act – have just been made public. Most of the small businesses responding wanted regulatory burdens reduced, easier access to public sector contracts, more effective protection of their intellectual property rights, and greater support should they wish to expand and go global. No surprises there.

The most unified response, though, came over education – with 88 per cent saying there was a need for additional measures to stimulate entrepreneurship through education, and 86.6 per cent believing that entrepreneurship was insufficiently reflected in school curricula. Read more

Who will feature in the next European Commission, to take office in 2009?

Well, for starters, it is widely thought that José Manuel Barroso wants a second term running the show. So how does the Portuguese liberal re-apply for his own job? Read more

There has been much talk of the Franco-German motor that has traditionally propelled the European Union breaking down recently. So the cancellation of a meeting last week between the two countries to discuss proposals to cut pollution from cars led to plenty of puns.

The German press said the process has stalled but the French government said that was overblown. Whatever happens, the two biggest automakers in the European Union will have to strike a deal over  whose companies will have to make the biggest changes to ensure the European Union meets – or at least comes close to – its climate change targets. Read more

Thursday’s thundering Financial Times editorial on the food crisis unfortunately arrived too late to change opinions on the 13th floor of the Berlaymont, the European Commission nerve centre. The day before the call for a pause in the push for biofuels was made Jose Manuel Barroso, Commission president, defended the policy.

He said the use of crops for fuel had so far had little effect on higher food prices. It can’t be often that the Commission disagrees with its multilateral brethren, the IMF, World Bank and United Nations. Read more

Tony Barber

As a trained economist and former prime minister of Romania, Nicolae Vacaroiu is understandably concerned about his country’s inflation rate, budget deficit and vast current account deficit, all of which are getting Romania into hot water with its new masters at the European Commission. But what really bugs him is Romania’s inability to make effective use of all the economic aid that is on tap from the European Union.

On the 27th floor of a Brussels hotel the other night, Vacaroiu told me that Romania had made such “poor progress” in absorbing EU funds last year that it had ended up a net contributor to the EU budget. “Maybe, unfortunately, the same will be true in 2008,” he said. Read more

The daily press briefing at the European Commission’s star-shaped Berlaymont HQ in Brussels is an event rarely noted for its humour.

Yesterday’s menu, for example, included questions to the Commission on the subjects of organised crime in Bulgaria, a court judgment on Sweden’s alcohol taxation rules, the Macedonian elections, and Greek asylum policy, among others.   Read more

Tony Barber

The first time I interviewed Giulio Tremonti, he was in shirtsleeves and a pair of bright braces, puffing confidently on a cigar in Milan. At that time he was finance minister in Silvio Berlusconi’s centre-right Italian government, and there’s no denying it, he looked every inch the part.

Now, as Italians prepare to vote in their April 13-14 election, Tremonti is playing a more populist tune. He’s just published a book, Fear and Hope, which lashes out at globalisation and condemns “the dictatorship of the market”. He also calls for a “new Bretton Woods”. Today’s Tremonti, some may think, has more in common with his protectionist political opponents on the Italian far left than with the Tremonti of 2003. Read more

A colleague visited recently from the FT’s London mothership, and a few of us took him out to sample some hearty Belgian fare.

Over his beer and stoemp (bangers and mash, Belgian-style) he asked who in the Brussels machine was the ultimate dinner party guest. A member of the European parliament, a national ambassador to the EU, or a European commissioner?

The consensus was that with Brussels dancing to the beat of the European Commission (the EU executive), commissioners were at the top of the pecking order.

Granted, not all commissioners’ roles are equal. Holding the EU education and training portfolio (where the union has only a small role)  hardly has the same cachet as, say, the competition supremo job which gives Neelie Kroes, the incumbent, the power to take on companies such as Microsoft.

But now this Commission has entered its final year and a half, and some of its members have already jumped ship. Markos Kyprianou, formerly health commissioner, has returned to Cyprus to become its foreign minister. Franco Frattini, justice commissioner, is on unpaid leave to participate in this month’s elections in his native Italy. Read more

Tony Barber

What a pleasure it was to attend a conference on sovereign wealth funds today at the magnificent Palais d’Egmont in Brussels. There we were, listening to a prominent Kuwaiti banker as he described the activities of the Kuwaiti Investment Authority, often regarded as the oldest sovereign fund of them all.

All of a sudden, a French participant livened things up by asking why the Kuwaitis, when they set up shop back in the 1950s, had chosen London rather than some other foreign city as their base. Smooth as silk, the Kuwaiti replied that, well, after all, as a top banker you needed to be in a city “where you can have some fun … not like Frankfurt, for example.” Read more