Monthly Archives: December 2010

The Brussels Blog is shutting down for the holidays. Thanks to all our readers who have helped make the blog one of the best-read sources for EU and European news on the Internet. We’ve got a lot more planned for the new year, so please check back in January, when we’ll continue to try to bring you a taste of what’s being talked about around town – and throughout the continent.

In today’s paper, fellow Brussels Blogger Stanley Pignal has a nice scoop about a letter France and Germany sent to European Union officials announcing their formal objections to including Bulgaria and Romania in the Schengen area, the visa-free travel zone that most EU members are part of.

Traian Basescu, the Romanian president, has already responded this morning by calling the letter a “discriminatory act against Romania,” and vowing to fight the move.

Because the issue could get even hotter, especially since the incoming Hungarian presidency had made Bulgarian and Romanian Schengen membership such a priority, we thought we should post the letter here, with some annotations of our own. Read more

Monday’s meeting of EU energy ministers marked the last such ministerial conclave of the six-month Belgian presidency, a period that diplomats seem to agree will be remembered as extremely effective – even without a Belgian government in place for the entire span.

As we reported in today’s paper, there is a good amount of trepidation heading into the Hungarian presidency, particularly amid moves by Viktor Orban, the populist prime minister, to consolidate power in the hands of his government, most recently through a much-criticized media law.

Mr Orban himself has been a bit unpredictable. When I spoke with him during the October summit of EU heads of government here, he was his usual colourful self, saying his fellow European leaders were frequently too focused on EU institution-building in response to the economic crisis: Read more

On the second and final day of the EU summit, attention turned briefly away from the ongoing eurozone crisis and onto a letter the British government was circulating to get other member states to agree to freezes in the EU’s budget.

During their post-summit press conference, both Nicolas Sarkozy, the French president, and Angela Merkel, the German chancellor, said they would sign onto the effort, giving David Cameron, the UK prime minister, significant backing.

After breaking the story Thursday night, we have obtained a copy of the letter being circulated and thought we’d post it here. The so-called “financial framework” and “financial perspectives” mentioned is the seven-year budget cycle that begins in 2014. Negotiations over the new multi-year budget are due to begin in mid-2011.

The next multiannual financial framework will come as Member States make extraordinary efforts to clean up public finances. These efforts are intended to bring down public deficits and public debt to a sustainable level in keeping with an enhanced fiscal and macroeconomic monitoring framework.

 Read more

One of the more mysterious elements of the summit, which is now wrapping up, is the chatter about some of the EU’s big countries looking to cap community spending for up to a decade, as we reported in today’s paper.

The plan is to keep net EU contributions at the same levels, adjusted for inflation. If you assume the European economy grows by a couple of percentage points a year in real terms, that would mean EU spending falling as a percentage of GDP from roughly 1 per cent today to 0.8 per cent by 2020.

That would amount to stopping the European project dead in its tracks, critics of the letter say. Those critics broadly fall in two categories: Euroenthusiasts and net recipient countries. Read more

During his normal mid-summit breakfast with reporters, José Manuel Barroso, the president of the European Commission, the EU’s executive branch, was in a feisty mood, despite the late session Thursday night.

Barroso gave an overview of the debate over treaty changes and a summary of what he hopes will be a strong statement in support of the euro today.

But his most pointed comments were aimed at reports of a letter being circulated by Britain and other member states attempting to set limits to the seven-year budget framework, which starts in 2014. Read more

We now have a full copy of the conclusions reached by the European heads of government. Not many surprises in there, but I thought I’d post an annotated version below for those interested in EU arcana.

1. The European Council welcomed the report presented by its President following up on its conclusions of 28 and 29 October 2010. It agreed that the Treaty should be amended in order for a permanent mechanism to be established by the Member States of the euro are to safeguard the financial stability of the euro area as a whole (European Stability Mechanism). This mechanism will replace the European Financial Stability Facility (EFSF) and the European Financial Stabilisaton Mechanism (EFSM), which will remain in force until June 2013. As this mechanism is designed to safeguard the financial stability of the euro area as a whole, the European Council agrees that article 122(2) will not be used for such purposes.

The interesting thing here is the last sentence. This is the language David Cameron, the UK prime minister, was seeking to ensure non-euro countries do not get sucked into another bail-out when the new rescue system goes into effect in 2013. Read more

We have just gotten our hands on the new treaty change language agreed to by the EU’s heads of government, and the change from the original language is very minor – meaning that efforts by Germany and the UK to get additional provisions included was successfully fended off. Read more

We have an agreement.

According to a senior European minister, the heads of government have broken for dinner after reaching an agreement on the language for changes to the EU treaty to create a new bail-out system for the eurozone.

We haven’t seen the language yet, but the minister said that it remains just two sentences. Clauses were inserted into both sentences, however, that toughened up the amendment a bit. But the changes fall short of the initial demands made by Germany to make explicit that the new rescue fund could only be used as a last resort. Read more

Leaders have finally arrived at the Justus Lipsius building, headquarters of the European Council, and have begun their deliberations over changes in the EU treaties and next steps in the eurozone crisis.

As we expected this morning, the main point of nervousness is still over how hard Angela Merkel will insist that changes in the treaty include tough language ensuring a the newly-created bail-out system only be used as a last resort.

Merkel seemed to hint that she wouldn’t push too hard – saying at a pre-summit gathering that she wanted only “very limited treaty change” - but officials at the sidelines of the summit said there was still much hand-wringing going into the main event.  Read more