Monthly Archives: September 2012

Germany's Schäuble, left, and France's Moscovici sent the Tobin letters out this morning.

First, it was going to be a global financial transactions tax – known among the cognoscenti as the Tobin tax – agreed by the Group of 20 major economies, but the US wouldn’t go along. Then it was going to be an EU-wide levy among all 27 members of the bloc, but the UK and several Nordics disagreed.

That got whittled down to the 17 eurozone members, but the Dutch and Irish didn’t want it. So, starting today, a final push to find nine EU members who will sign up to the Tobin tax was launched by France and Germany, who sent letters around this morning to all EU finance ministries looking for takers.

Under the EU’s arcane rules, if nine sign up, Paris and Berlin can move ahead with “enhanced cooperation” – essentially a tool that allows a small subset of countries to agree on common policies and still stay within the EU’s legal system. But it’s not certain they’ll find even nine, EU diplomats said.

According to copies of two letters obtained by Brussels Blog – one to the European Commission, the other to national capitals – co-signatories Pierre Moscovici, the French finance minister, and Wofgäng Schauble, his German counterpart, are trying to gain support by arguing the tax is the financial sector’s contribution to eurozone crisis response. Read more

French finance minister Pierre Moscovici signed the letter to Viviane Reding from Paris.

Battlelines are being drawn between countries on a controversial European Commission draft legislation that would force public companies across the EU to reserve at least 40 per cent of their board seats for women.

As we reported yesterday, France became the first big country to come to the support of the proposal’s author, EU justice commissioner Viviane Reding, after a group of nine UK-led countries, which now includes Denmark, the Netherlands, Hungary and the Czech Republic, weighed in against.

There are also divisions within the European Commission itself, with several men who hold key economic porfolios – including Olli Rehn (economics and monetary affairs), Michel Barnier (internal market) and Joanquin Almunia (competition) – backing Reding, while most of her female counterparts – including Neelie Kroes (digital agenda), Catherine Ashton (foreign affairs) and Connie Hedegaard (climate) – are opposed.

As is our normal practice here at Brussels Blog, we wanted to give our readers a bit more detail of the French letter we obtained. A copy of the letter, and our translation, after the jump. Read more

Van Rompuy this week at the UN. MEP Goulard called his letter "empty (and quite insulting)".

The ongoing saga of the European Central Bank’s empty seat on its six-member executive board appears to be, well, ongoing.

Senior members of the European Parliament’s economic affairs committee met yesterday for a brief coordinating session and decided to, yet again, postpone the confirmation hearing for Yves Mersch, the Luxembourg central banker whose quest to secure the empty seat has been the subject of intense internecine fighting for more than nine months.

To update readers, Mersch’s nomination is now being held up by the committee because they believe no woman candidate was seriously considered for the post. Herman Van Rompuy, president of the European Council, wrote to the parliament in the last week to explain leaders’ positions – but committee members found the response “very thin,” prompting the decision to put off a confirmation hearing again.

Sylvie Goulard, a French liberal MEP who is a senior member of the committee, told Brussels Blog in an e-mail she found the Van Rompuy letter “empty (and quite insulting)”. Excerpts from the letter are after the jump. Read more

Another day, another country opposing a nascent European Commission plan to impose a 40 per cent quota on women serving on corporate boards.

Last week, a UK-led letter to the proposal’s author, EU justice commissioner Viviane Reding, and her boss, commission president José Manuel Barroso, included nine countries, including the interior ministers of the Netherlands, Hungary and the Czech Republic.

This week, Denmark added its name to the list of opponents, sending its own letter to Reding. According to the letter, obtained by the Brussels Blog, Copenhagen believes more should be done to help women in business, but feels mandatory quotas are not the solution. Read more

Who will succeed José Manuel Barroso as president of the European commission?

That question has long been debated around the corridors and coffee bars ofBrussels. But it gained special urgency after Barroso’s state-of-the-union speech in Strasbourg last week. In it, Barroso suggested that each political party nominate their own choice for commission president and place that person atop their list for the 2014 European elections.

The idea is to generate some much-needed excitement for EU elections that tend to suffer from paltry voter turnout.

“This would be a decisive step to make the possibility of a European choice offered by these elections even clearer. I call on the political parties to commit to this step and thus to further Europeanise these elections,” Barroso said.

So that begs the question: who is generating the most buzz as the next commission president? Who has the right stuff? As a service to our readers, Brussels Blog has decided to present a list of early contenders from each of the major political families. Read more

Is it possible to have one supervisor for eurozone banks, while keeping 17 different paymasters for when things go wrong?

It is the big potential problem of phasing in a banking union – while prudential responsibility is centralized under one supervisor, the means to pay for bank failure isn’t. One cynical diplomat likened it to “telling all cars to suddenly change sides and drive on the left of the road – but leaving the lorries to drive on the right.”

Just think through what would happen in the case of a failed financial institution once the European Central Bank takes over supervision.

Under the Brussels banking union plan, the ECB will have the power to shut down the lender by removing its license to operate. But in practice it would require the authorisation of the bank national authority. As we know, some banks perform vital functions for the economy and are too big to fail. For the ECB to pull the plug, someone would have to be available to pay for winding it up or bailing it out. Read more

Photo AFP

Mohamed Morsi, the new Egyptian president, arrived in Brussels today for day-long meetings with top EU officials. But most of the world’s attention was back in Cairo, where the US embassy, like other embassies in the region, had been the target of attacks by demonstrators angry about an anti-Muslim movie clip uploaded onto YouTube in the US.

Morsi’s morning press conference with European Commission president José Manuel Barroso was his first chance to publicly address the incidents and followed concerns in Washington that he had not condemned the attacks strongly enough. Indeed, US president Barack Obama himself warned that the US did not consider Egypt an ally, nor an enemy, and was watching closely how Morsi would respond.

In order for our readers to make their own judgment, the complete transcript of Morsi’s comments on the incident at the Brussels presser, as conveyed through a translator, are below. He falls short of specifically condemning the attacks, but does say “the Egyptian people reject any such unlawful act” against “individuals, the properties and the embassies.” Read more

China’s solar panel manufacturers are facing an uphill battle in their legal fight against the EU, which last week targeted them as it launched the bloc’s biggest-ever an anti-dumping investigation. The case involves Chinese exports of solar panels, wafers and other products that totalled some €21bn last year.

More than half of such anti-dumping investigations result in tariffs being imposed, according to EU officials. Yet there are at least two technical factors at work in the solar dispute that could make the odds even worse for the Chinese. Read more

Luxembourg's Yves Mersch, left, arriving at an ECB executive board meeting in Finland last year.

Yves Mersch’s path to a seat on the European Central Bank’s powerful six-member executive board has been rocky.

The head of the Luxembourg central bank was, at first, not even considered a leading candidate for the position, which was being vacated by a Spaniard and, Madrid assumed, would be filled by a Spaniard. But a caucus of northern European countries balked at putting another southerner on the board, so inflation hawk Mersch became their candidate.

That set off months of nasty backroom battles, where the Spanish insisted on compensation – at one point they held out for the head of the new €500bn eurozone rescue fund, which was supposed to go to German economist Klaus Regling – in exchange for acceding to Mersch. Luxembourg retaliated by holding up plans to give Spain more time to hit tough budget targets.

In the end, the northerners won out. Mersch was nominated, and Spain was left empty handed. Everyone thought the fight was over. Everyone thought too soon: this morning, the European Parliament announced it was postponing Mersch’s confirmation hearing scheduled for Monday because no women candidates were considered for the job. Read more

Viviane Reding, left, confers with José Manuel Barroso during a July meeting in Cyprus.

Over the last couple of days, we’ve been chronicling the increasingly contentious effort by EU justice commissioner Viviane Reding to enact legislation requiring all major listed companies in Europe to have at least 40 per cent of their boards comprised of women.

The UK and Sweden– as well as some free-market oriented Reding counterparts on the European Commission – are not enamoured of the idea, which the Luxembourger is hoping to introduce next month. As we reported in today’s dead-tree edition of the FT, the UK has circulated a letter to other EU countries which would lay out their objections to Reding and her boss, commission president José Manuel Barroso.

As is our practice here at the Brussels Blog, we thought we’d provide some more detail on the leaked documents we’ve been basing our reporting on. First, click here for a copy of the draft legislation that has been making the rounds within the commission. After the jump is the text of the draft UK letter that’s now being circulated on the topic. Read more