Conventional wisdom in Brussels holds that nothing helps the cause of European integration like a crisis: the battles of the exchange-rate mechanism in the 1990s led to the Euro, the 9/11 terrorist attacks to greater judicial cooperation, and now the financial meltdown is spurring an ever-stronger European response.

As Jacques Delors, former Commission president, put it in a recent speech, firefighters battling crises soon make way for architects.

Proponents of this vision would do well to read Otmar Issing’s comment piece in Tuesday’s FT. Read more

Italian economy and finance ministry

The Italian finance ministry. Image by Bloomberg.

Italy has been in the news for all the wrong reasons, and a look at World Bank indicators on how easy is to run a business there might explain a few things: It takes 1,210 days to enforce a contract in Italy and it costs around a third of the contract’s disputed amount in legal costs – for those hardy enough to attempt to navigate the byzantine court system.

Businesses not willing to wait forty months to get their money back might want to try setting up shop in Luxembourg instead, where courts will process claims in a far more reasonable 321 days – and at a lower cost, too.

Those World Bank figures highlight the difficulties facing the European Union’s single market. Though goods and services can flow nearly seamlessly through the EU’s 27 countries, the laws and regulations that apply to them remain very different. Read more

Viviane Reding

Viviane Reding

There will be a touch of Parisian glamour at the Commission’s stuffy Berlaymont headquarters today as LVMH, the French luxury titan, drops in to chat business and gender with justice commissioner Viviane Reding.

The holding company behind Christian Dior and Louis Vuitton will publicly sign a Commission pledge to include at least 40 per cent women on its supervisory board by 2020.

Behind the effortless elegance of this afternoon’s event, a hard-nosed political battle on corporate regulation is unfolding.

Boardroom gender equality is gearing to be a big issue for Reding, who in Brussels is still best known for her popular crusade as telecoms commissioner to get mobile phone roaming fees down to nearly reasonable levels. Read more

It took six years of negotiations, but Croatia’s entry into the European Union is now officially a formality.

In a mad dash to the finish line, the Hungarian presidency managed to squeeze in one last mini-summit to consecrate the deal before the clock runs out on their six-month stint at the EU Council’s helm Thursday evening.

Now comes the behind-the-scenes work of translating that political agreement into an accession treaty which can be signed and ratified by the existing 27 EU members – and the Croats, of course. The drafting and translating into 23 languages should be done by the end of the year; the actual accession date is set for 1 July 2013. Read more

EU budget negotiations, which kick off this week, are about three things: the size of the overall pot of money; which countries will pay into that pot; and which countries will get money out of it.

For those following the debate, here is your cut-out-and-keep Excel guide to those questions, plucked from 2009, the latest year for which figures have been compiled.

Over 70 per cent of the EU’s money comes from five countries: Germany, France, Italy, Spain and the UK, in that order. But most of the money comes back to them, too. France (with its EU farm subsidies) gets the biggest amount back, followed by Germany, Spain, Italy and Poland (with its farmers and its roads funded by EU development funds).

As the debate gets underway for the next seven-year budget framework, we thought we’d crunch the numbers to establish who the biggest winners and losers are. (Check out the outcomes for all 27 countries in this spreadsheetRead more

The Socialist group were the first to gather in the traditional pre-summit party huddles, the real start of the festivities here in Brussels. Under a well-worn tradition, EU leaders from the major political groupings meet over lunch to coordinate their positions – and share gossip, one presumes – ahead of the actual leaders’ meeting today and tomorrow.

Well, that’s the idea anyway. In the Socialists’ case, none of their national leaders – including Spain’s José Luis Zapatero and Greece’s George Papandreou – were in attendance at the Albert Hall venue in downtown Brussels.

That left a hodge podge of opposition leaders, ministers, European commissioners, and other lesser-known officials as the only attendees to a pre-summit meeting for a summit to which they are not invited. The only exception was Cathy Ashton, the EU foreign policy supremo, who gets a look in on some of the council debates. Read more

Behind-the-scenes preparations ahead of the summit of European leaders on Thursday and Friday have yielded one final piece of agreement on managing EU borders, cobbled together in the last few hours.

Reliable sources tell Brussels Blog there has been a breakthrough in the negotiations to bolster Frontex, the EU’s budding border guard agency.

The new regulations — which still have to formally approved by parliament later this year — will give Frontex the ability to buy or lease equipment such as helicopters, planes and patrol boats for the first time.

Currently, it has to beg, borrow or steal whatever surplus kit national border guards can spare, an arrangement which has hampered its operational capabilities since it was founded in 2005. Read more

Put it down to all those bankers and Eurocrats: Luxembourgers are once again Europe’s richest citizens.

The Grand Duchy’s gross domestic product per person is 283 per cent of the EU average, according to 2010 data released this morning by Eurostat — itself based in Luxembourg. That’s a whopping 6.6 times larger than Bulgaria, the bloc’s laggard, whose GDP per person is a mere 43 per cent of EU output.

That gap between richest and poorest is 0.2 points larger than last year both because Luxembourg’s GDP share rose (from 272 per cent) and Bulgaria’s dropped (from 44 per cent). All figures are adjusted for purchasing power changes, so exchange rates don’t factor in.

 Read more

Happy Tax Freedom Day to our Polish and Danish readers!

Or so says a new study put out today by New Direction, a think tank funded by the centre-right European Conservatives and Reformists parliament group.

Tax Freedom Day isn’t some cooky holiday dreamt up to celebrate taxes or freedom; rather, it is meant to represent the day on which citizens stop working for the government (i.e. to fund their tax bill) and when they start working for themselves. So a 25 per cent tax take equates to a Tax Freedom Day of April 1st, while you need a 43 per cent rate to land on June 7th.

It’s a simplistic model, but it is invariably a big deal in the US, where it was dreamt up in the 1940s by low-tax precursors of today’s Tea Party movement.

The New Direction study, compiled by Institut Economique Molinari in Brussels, suggests that the EU-wide Tax Freedom Day is coming up this Saturday, or 44.23 per cent of the way into 2011. That’s a day later than last year, mainly because of assorted VAT tax hikes enacted to plug gaping budget deficits.

See the country-by-country breakdown after the jump: Read more

Ask most people what the causes of the financial crisis were, and you will get an answer encompassing unsustainable bank lending, out-of-kilter US property prices, greedy banks and inept regulation.

Ask the European Parliament what the causes were, and the answer is simpler: not enough European Union.

That is the conclusion of the parliament’s special committee on the financial, economic and social crisis, which after sitting for 18 months and sending delegations to countries hit by the said crisis, has issued recommendations to prevent it happening again. The answer: member states have to boost their contribution to the EU budget from 1.06 per cent of economic output currently to 5-10 per cent. Read more

Fellow Brussels Blogger Peter Spiegel gives a comprehensive account in today’s paper of how European integration is not just slowing down, it appears to be unravelling.

His argument is that the two most visible achievements of the European Union – namely, the single currency and the Schengen passport-free travel zone – are under unprecedented assault.

What about the third and last great European grand projet: the right of EU citizens to live and work anywhere in an EU country other than their own? A core benefit of European integration, it is a used by an estimated 12m Europeans – a population roughly the size of Belgium.

That, too, may be in an early form of trouble, put under pressure by a blend of populism, high unemployment and a lack of political will to defend gains made over the past six decades. Read more

If, hypothetically, a member of the European parliament was caught on video offering to amend laws in exchange for cash, who would investigate such a thing?

The answer – rather less hypothetical after Britain’s Sunday Times exposed what appears like serious misconduct from four MEPs – depends on who you speak to.

The European Anti-Fraud Office, or OLAF, thinks it should be the one investigating. After all, what’s the point of having a dedicated EU anti-fraud agency if you can’t investigate credible allegations that MEPs are taking bribes?

But when an OLAF team showed up in the parliament to search the MEPs offices last week, they were unceremoniously denied entry by parliamentary authorities. Parliamentarians insisted OLAF was set up to investigate fraud against the EU budget, and it’s not clear that the EU has lost money in this episode.

OLAF disagrees on the limits of its role, but so far hasn’t been anywhere near the MEPs’ offices, which have been sealed off.

Insiders say part of the reason for the stand-off is a power struggle between parliament and the European Commission, the EU’s executive branch, which is ultimately OLAF’s master. Read more

It will be Luxembourg that will have the final say on Brussels versus Strasbourg, now that Paris has decided to sue under Lisbon.

In other words, the fight over the seat of the European Parliament has suddenly become a full-blown EU inter-institutional brawl.

The French government on Tuesday decided to take the European Parliament to the European Court of Justice in Luxembourg after parliamentarians last week decided to tweak the terms of their regular commute between Brussels and Strasbourg. Paris claims the move violates the EU’s new Lisbon treaty, its governing constitution. Read more

José Manuel Barroso, the president of the European Commission, announced he was sending the emergency relief commissioner, Kristalina Georgieva, to Tunisia Wednesday night to oversee the EU’s humanitarian aid effort to the growing refugee crisis along the Libyan border.

Your Brussels Blogger has been in Malta reporting on how southern Europe has been preparing for a possible flood of migrants fleeing Libya. Despite all the bluster, thus far the only two who have claimed asylum in Europe from Libya are the two defecting fighter pilots who flew over in their Mirage jets last week.

Why the exodus to Tunisia and not across the Mediterranean? Officials in Malta say the awful weather in the past week is the real reason why nobody has attempted the 400km journey from Libya.

As I explained in my story on Monday, it’s not fleeing Libyans that Europeans are most worried about. Their main concern relates to foreigners living in Libya, mostly from other parts of Africa, who might use the chaos to flee in Europe. Many hail from places like war-torn Somalia, which nearly automatically entitles them to some sort of protection as refugees if they reach Europe. Read more

With Libya at risk of becoming the latest North African country to be destabilised by a popular uprising, the European Union’s diplomatic service faces a problem: Tripoli has long been the only capital in Europe’s neighbourhood without an EU diplomatic representation.

Sources in the diplomatic service say that is about to change.

The European Union is to open a representative office in Libya as part of its burgeoning European External Action Service network, they say.

Tripoli has been a gaping hole in EU diplomacy thus far, the only country in the European neighbourhood where its diplomatic service doesn’t have a baseRead more

Belgium sets a dubious record on Thursday when it overtakes post-war Iraq as the country that has gone longest without a government.

It’s a surreal achievement greeted with a mix of amusement and quiet despair in the streets of Brussels. (I speak of “Brussels” as the capital of Belgium here – Eurocrats based in the city pay only passing attention to things Belgian).

For those not following the Kafkaesque saga that is Belgian politics, ever since the government collapsed on April 26th, and after Flemish nationalists became the country’s biggest party in the ensuing June elections, politicians have been unable to patch over linguistic and cultural differences that separate Dutch speakers in Flanders from Francophones in Wallonia. Read more

With all the controversy surrounding succession at the head of the European Central Bank, at least European finance ministers could agree on another ECB succession challenge with quite a bit less conflict.

Peter Praet, a regulation expert from Belgium, has been selected to replace Austria’s Gertrude Tempell-Gugerell on the European Central Bank’s governing council, eurozone finance ministers unanimously agreed during their afternoon gathering in Brussels.

The outcome doesn’t come as much of a surprise: the only other nominee, Slovakia’s Elena Kohutikova, had a lacklustre hearing at the European parliament, even as Praet’s star continued to rise.

But his nomination means there will be no women on the 23-member council, comprised of 17 central bankers from the countries that use the euro, and six executive board members, of which Praet will be one. Read more

Paris lost no time in rebutting yesterday’s study suggesting members of the European Parliament would rather end the monthly to-and-fro between Brussels and Strasbourg.

A statement released by the foreign ministry on Friday was a Gallic blend of rebuke, snub and curtness.

“The question of the seats is judicially mandated by the treaties: these are applicable to member states and to institutions alike,” it reads. Read more

If you’re wondering why Monday afternoon felt unusually quiet in Brussels, you can thank Belgacom, the Belgian telecoms group which provides the phone lines to the European institutions.

For five hours starting at lunchtime, all lines at the European parliament and the Commission, the EU’s executive arm, were severely disrupted, apparently blocking incoming calls from landlines and some mobiles. Read more

The European Central Bank has emerged from the financial crisis as one of the few institutions with its reputation intact – and its powers greatly enhanced – so a job on its governing council is a pretty good gig by any measure.

One is coming up in June, when Austrian economist Gertrude Tumpel-Gugerell is leaving after eight years at the top table. She’s one of the six executive board members at the ECB, and as such also sits on the rate-setting governing council alongside the 17 governors of the national banks whose countries use the euro.

Two candidates have been put forward to replace her: Peter Praet, 61, a well-regarded director of the Belgian central bank for the past decade; and Elena Kohutikova, 57, a former Slovak national bank deputy governor and now an economist at Vseobecna Uverova Banka, a unit of Italy’s Intesa SanPaolo. Read more