Open Europe blog

Yet more faintly off-putting EU propaganda for kids

Posters saying that their school milk has been provided by the EU.

Hmmm.

The justification for the posters?

“Experience has further shown that European Union citizens are not sufficiently aware of the role played by the Community in the school milk scheme. As a result, it should be laid down that the European Union flag must appear on the packaging. In cases where the method of distribution or substantial technical difficulties do not allow the use of individual packaging and appropriate labelling, the fact that the school milk scheme is subsidised by the European Community should be indicated in the form of a clearly visible and readable poster or sign put next to the place of distribution.”

http://www.defra.gov.uk/foodrin/milk/

According to the Press Association MEPs have today voted to increase the amount of subsidies you and me pay each year to "hard-pressed" tobacco farmers. As the global credit crunch starts to bite and rising food and petrol prices hit your daily budget I'm sure you'll be as pleased as we are that more than €300 million a year of our taxes will continue to be spanked on producing a crop which killed over 500,000 people in Europe last year.

In the perverse world that is the EU, farmers are paid £5,250 a hectare to grow tobacco while wheat farmers receive £240 a hectare.

In the UK alone the NHS spends £1.5bn a year treating people with smoking related diseases and the government spends around £30m on anti-smoking education campaigns and £40m is spent helping people stop smoking. No contradictions there then...

Last year the Government claimed the EU had seen the light and that tobacco subsidies would end in 2010, but the clowns in the European Parliament have just voted to extend tobacco farmer's gravy train until at least 2012.

The issue will now go to an agriculutural ministers meeting where no doubt the UK Government will defend our interests admirably (remember that root-and-branch review of the CAP that Blair promised us in return for our rebate anybody?)

Other news just in which helps to confirm that Brussels really is on another planet: today is the launch of European Maritime Day which "will highlight the importance of the oceans and seas to Europe". This from the organisation which has admitted that its very own Common Fisheries Policy is "morally wrong" and is single handedly responsible for destroying some of the richest fishing stocks in the world?

Apparently this great day is going to be a celebrated with a "stakeholders conference" in Brussels. Hurrah! Cohibas all round...

Labels: EU failure, tobacco

Blimey

Its the anti-biofuel reggae from the NGO biofuel watch.

Not sure about the tune, but the sentiment is fair enough.

Eurofanatic Indie hack Jeremy Warner makes (or rather repeats) an intriguing argument in his column today.

Space constraints prevent me from repeating the many positives Britain has derived from enlargement that were aired at yesterday's "Business for New Europe" conference, but here's an interesting thought from one of the speakers, Lucy Neville-Rolfe, the corporate and legal affairs director at Tesco.

Just as the influx of Poles and other Eastern European workers helped fill shortages in the labour force during the upswing, they are now acting as a useful shock absorber for the labour market as the economy slows, with many deciding to return home to the higher growth eco-nomies from which they came. With luck, it may mean Britain can survive more difficult times without the usual, steep rise in unemployment.

Er... doesn't this kind of contradict the Governments previous argument that migration from eastern Europe doesn't cause unemployment? If people going home would "create" jobs then doesn't that rather suggest that them turning up probably "takes" jobs away from people here? You can't have it both ways.

Obviously if a lot of people turn up in a short space of time that is likely to create some frictional unemployment, but with a flexible economy that should clear pretty quickly. There is not a set number of jobs in the UK economy. Indeed, most migrants come here to do a specific job.

Post migration the labour market will clear with a slightly lower wage rate for unskilled workers who face more competition. The government have never really faced up to that. On the one hand the Government want to say that it increased migration hasn't reduced wages. On the other hand they say migration has “held down inflation”. Again - which is it to be?

One duff argument in the migration debate is that we "need" immigration so that immigrants will do the jobs that people in Britain won't do. This is nonsense. The UK has 7 million economically inactive people, and with a flexible economy wages will rise to the point where people will do the job. Are Brits too good to clean the bog, or take out the bins, or work on a farm? Are these jobs “only fit for Poles”? It’s a pretty dodgy argument that would probably sit better in the rhetoric of the hard right, than the liberal eeejuts that normally make this argument.

The bottom line is that the answer to unemployment is a flexible economy. The answer to low wages is to transform our utterly useless education system.

There is an argument that says migration is good because its a stealthy way to make the economy more flexible. But this is fundamentally bad politics because (a) making the economy more flexible by stealth through immigration is likely to be unpopular in the long term and (b) it discourages real reform - why sort out education or labour market regulation if we can just import skills, and circumvent labour market rules. NB India are desperately trying to phase out their "informal sector" - are we seriously trying to create one in the UK?

In the long run the growth of the economy is all about productivity and the accumulation of knowledge. It is pretty clear which policies promote growth (low tax, low regulation, effective public spending) and the real challenge is for politicians to pursue these goals in a gutsy way.

Migration probably has a marginal impact either way (and all EU migration is only a third of the total anyway). GDP per capita is probably initially lower because the same capital and land stock is divided among more people, and the people arriving are not that highly skilled or wealthy. On the other hand they are clearly entrepreneurial enough to move countries and probably working more hours than the average person in the UK.

Jeremy Warner thinks both it was great that people from the A8 came to the UK, and also it's just great that they are now going away (are they? - no-one knows). The truth, as the Lords recently pointed out, is that neither will really make much difference.

Should a government-funded university really be sponsoring what appears to be a highly partisan think tank?

Just asking the question...

The "global policy institute" appears to be uncritically pro-EU integration, anti-US, left leaning...

*Thought* given that this is standard fare in a lot of UK academia, maybe they actually can't see the bias...

Oh and London Met Uni also give the Federal Trust office space as well. Fairly clear whose side they are on then.

Here's a copy of the Irish memo in full:

Irish have picked May 29 for voting but will delay an announcement to keep the no camp guessing (please protect). DFA's EU director gives us referendum timetable and details of the bill, to be published next week. Aim is to focus the campaign on overall benefits of EU rather than the treaty itself. Concern about the potential impact of a WTO deal and of
Sarkozy.

The draft, largely incomprehensible to the lay reader, had been agreed following lengthy consultation with government lawyers and with the political parties.

The bill would enter parliament in the second week of April and it would probably take two weeks to go through and be passed around 22 April. The minister for the environment would thus be entitled to set an order naming the date for the referendum between 30 to 90 days of the order being made. Technically, the Taoiseach and Ahern saw a slight advantage in keeping the no campaign guessing. 29 May was the assumed date in working plans.

Mulhall said a date in October would have been easier from a procedural point of view. But the risk of unhelpful developments during the French presidency - particularly related to EU defence - were just too great. Sarkozy was completely unpredictable. The only other unhelpful event the Irish thought might impact on the May vote would be a WTO deal based on agricultural concessions that could lead the powerful farming association to withdraw its support.

I ran through the UK parliamentary ratification timetable and noted that the refernedum vote on 5 March would be a particularly sensitive moment. Mulhall remarked that the media had been relatively quiet on the ratification process so far. We would need to remain in close touch given the media crossover.

Mulhall said other partners - including the Commission - were playing a helpful, low-profile role. Vice-president Margot Wallstrom, who had been in Dublin yesterday and today, had told Dermot Ahern that the Commission was willing to tone down or delay messages that might be unhelpful.

??? ??? ???...so Irish thought treaty was taken for granted...... David Miliband not going

Most people would not have time to study the text and would go with the politicians they trusted.

Labels: EU Constitution, Irish referendum

The front page of the Irish Daily Mail today reports on a typically cynical leaked email from the Irish Foreign Office to the British Government, which shows that ministers are planning a deliberate campaign of misinformation to ensure that the Lisbon Treaty is passed in the upcoming referendum. Foreign Minister Dermot Ahern has apparently been personally assured by Margot Wallstrom that the EU Commission will “tone down or delay” any announcement from Brussels “that might be unhelpful.”

It also says that ministers ruled out an October referendum, which would have been better procedurally, out of fear of “unhelpful developments during the French presidency – particularly related to EU defence.” The email said “the risk of unhelpful developments during the French presidency – particularly related to EU defence – were just too great. Sarkozy was completely unpredictable.”

It also suggested that the Irish Government plans to keep people from analysing the details of the Treaty, saying, the “aim is to focus the campaign on overall benefits of the EU rather than the Treaty itself.”

Until now it had been widely assumed that the date of the referendum would be June 12. However, the memo throws this into uncertainty, admitting that the Government are playing trying to fool campaigners over the date of the referendum. It says: “Irish have picked 29 May for voting but will delay an announcement to keep the No camp guessing. The Taoiseach and (Dermot) Ahern saw a slight advantage in keeping the No camp guessing.”

Labels: Irish referendum

We would never accuse them of lacking persistence… the EU Commission is sticking to its guns on biofuel targets, despite a wave of negative press coverage brought on by soaring food prices, and – perhaps most significantly – outbreaks of hunger-related violence in the developing world. This has so far occurred in several West African countries, Egypt and Haiti (leading to the fall of the Government there). We are also told that the Bangladeshi army has had to take control of food distribution.

Meanwhile the list of international institutions calling for the immediate suspension of biofuel targets grows ever bigger: the UN, IMF, World Bank, OECD, European Environment Agency and the EU Joint Research Centre are those we can think of (the latter two are responsible for providing scientific advice to the EU Commission).

Despite all this, the Commission still has its head in the sand on biofuels. Andrew Bounds at the FT reports that Barroso will continue to push ahead with the 10% target. Meanwhile, Energy Commissioner Andris Piebalgs, in an extraordinary blog post, attempts to make the Commission’s case:

“In Europe, we use less than 2 percent of our cereals production for biofuels, so they do not contribute significantly to higher food prices in the European context.”

This is misleading in a number of ways. A relatively small amount of cereal production may be currently diverted towards biofuels, but Europe has always been a far bigger producer of biodiesel, which is derived from oilseed plants such as rapeseed – not cereals. So the total crop production devoted to biofuel production in Europe is already far higher than 2%.

More importantly, consumption of biofuels in Europe may be very low at the moment, but the target for 2020 will change this dramatically in the future – use of these fuels would have to increase around fivefold. Academic estimates suggest 38% of current agricultural land in Europe would need to be turned over to biofuel production in order to meet that demand. The IMF note that biofuels were responsible for just under half of the increase in the consumption of major food crops in 2006–07. Of course, a great deal of this is due to the separate US targets. But the EU targets are just as ambitious as those in the US, and America has had a highly interventionist biofuel policy for the past couple of years, whilst Europe’s hasn’t really kicked in yet – meaning that much of the future escalation of demand will most likely come from this side of the Atlantic.

Piebalgs continues:

“Even if we reach our 10% biofuels target by 2020, the price impact will be small. Our modeling suggests that it will cause a 8 to 10% increase in rape seed prices and 3 to 6% increase in cereal prices.”

Exactly the same thing was being said by the farm lobby in the US prior to the introduction of biofuel subsidies over there. Moreover, the Commission’s modelling is based on the assumption that ‘second generation’ biofuels (which would be derived from wood etc, rather than food crops) will be developed in the near future, and can satisfy around 30% of demand. But this is a non-existent technology, and there is no scientific consensus as to whether these fuels can actually be produced cost-effectively on an industrial scale. The Commission also assume imports from cheaper biofuel producers (such as Brazil or Indonesia); but at the same time the EU maintains big import tariffs on ethanol. In any case, importing palm oil from South East Asia raises some serious environmental concerns – massive deforestation is already happening in this region in anticipation of future import demand from Europe.

The Commission’s figures for commodity price changes are therefore likely to be a big underestimate. But even if they are correct, this increase in price is highly significant for the world's poorest people, who already spend 50 to 80 percent of their total household income on food. Profs. Runge and Benjamin Senauer estimate that for every percentage increase in real prices of staple foods, 16 million extra people will be drawn into food insecurity. Those in the most marginal positions will starve.

The Commissioner responds with the following:

“The charge now is that EU biofuel policy will contribute to third world poverty by driving food prices up. My impression from this debate sometimes is that we the Europeans know best what is good for people in developing world. Let them speak for themselves.”

Clearly Piebalgs hasn’t been reading the news lately – the message from developing countries seems pretty clear...


“Without a good domestic production base for so called first-generation or crop based biofuels, the more innovative and efficient products will probably never take off. We need to use first-generation biofuels as a bridge to the second generation biofuels using lignocellulosic materials as a feedstock.”

Apologists for biofuels usually argue that we need targets for biofuels now in order to spur development of new and better versions of the Victorian-era first generation agrofuels we rely on now. But according to the EU’s Joint Research Centre, €33-60bn will be spent on subsidising biofuels up until 2020. To reemphasise the point: there still no viable industrial process for producing second generation biofuels – it is pure theory. Is this really the time to be throwing taxpayers’ money at something that might prove to be a mere pipe-dream? If second generation biofuels can in fact be developed, fair enough: but surely the research funding necessary to work out how would come in at a tiny fraction of this insane cost? Why does the EU continue to defy all scientific and economic logic to promote a policy which wastes such vast amounts of our money, pushes the poor towards starvation, and will harm rather than help the environment? Piebalgs in fact answers this question in the conclusion of his blog piece:

“The EU’s ambitious but realistic 10% target will provide the market pull stimulation that farmers need to face a future market based agricultural economy and less dependence on EU subsidies.”

Translation: it’s a great way of replacing the CAP. Direct farm subsidies can be scaled down and substituted with binding targets which create artificial, state-mandated demand – another mechanism of price support for EU agribusinesses. In this light, it is abundantly clear why Brussels is so determined to press ahead with its lonely campaign for the promotion of biofuels.

Labels: biofuels, CAP, environment

Labels: euro, propaganda

So now we start to see where some of the 190 million euro budget for the Presidency is going…

According to La Tribune de Geneve French Foreign Minister Bernard Kouchner has said he wants the French EU Presidency to be “very creative” and has appointed well-known French designer Philippe Starck as “artistic director for the French EU Presidency.” Starck told AFP, “Bernard Kouchner wants to mark a very, very vivid, very interesting, very creative French Presidency.” He said it was a matter of giving “the image of very modern, very creative France, using the most sophisticated technologies, and therefore not a ‘basque beret’ France but an avant-garde France.” Starck has been chosen to come up with the French Presidency merchandise. He said “There are many things which are traditionally given out to journalists, ministers, delegates… for the first time in the whole history of the EU, all that will be created with high quality”, instead of “simply sticking little logos on things.” He said he has created “many useful things”, between “ten to fifteen objects” which will be presented in June. He has also come up with “events,” and said, “there will be loads of them”, of all kinds, but mostly cultural.

Meanwhile, the Wikipedia entry for Philippe Starck quotes him telling a German newspaper last month that he plans to retire within two years because his work is "unnecessary and materialistic".

Peter Oborne's thesis about the emergence of an insulated "political class" is looking more and more bang on every day... now a lost bag is a "diplomatic incident."

As Richard North has pointed out, it tells you a lot about media priorities that T5 has been way higher up the bulletins than the new wave of fighting in Iraq.

--

MINISTER'S PLEA AFTER T5 'DIPLOMATIC INCIDENT'

David Miliband issued an appeal for Heathrow authorities to "get their act together" today after revealing that the Terminal 5 debacle had caused a diplomatic incident.

The Foreign Secretary said he had been approached by a furious counterpart during an informal gathering of EU ministers over the weekend.

The unnamed politician apparently lost his luggage while changing planes at Heathrow, and has been warned it may take "weeks" to locate.

Writing on his blog, Mr Miliband said he had been asked to express the man's anger to British Airways and operator BAA.

"One foreign minister I met at the informal meeting in Slovenia over the weekend has fallen victim to the Terminal 5 saga," he wrote.

"He arrived merely to transit, but his bags are nowhere to be seen and it was whispered that it might take weeks.

"He asked me to pass on a message to BA/BAA: 'For goodness' sake, get your act together'."

The Communique from the Franco-British love in is up.

Some of it is rather broad brush, but there are some interesting snippets.

Defence

They have signed off a whole bunch of joint funds and joint defence development projects. Apparently they will:

Cooperate to develop European military capabilities, available to both the EU and NATO, in particular in the fields of :

• Carrier Group operations: by facilitating the generation of a combined maritime strike capability when required for national, EU-led or NATO operations. This capability could be expanded to other European countries able and willing to make a contribution.

• A 400M: France and the UK will pursue a common approach to in service support for interoperability and through life cycle costs optimisation, including common configuration management with other A400M nations; our aim is to cover the requirements of both France and the UK in a single joint contract.

• Helicopters: by addressing critical shortfalls in capability which constrain the deployment of helicopters in operations. Support will be given to initiatives such as pilot operational and advanced training courses, upgrading aircraft and establishment of a trust fund that could improve the availability of helicopters to our European partners and NATO allies. Other nations are invited to contribute to this effort. We support both the EDA and NATO's role in addressing European helicopter capability shortfalls.

Climate Change

Despite the UK's opposition to "green" tariffs it has agreed to the principle of them in the absence of a Kyoto successor.

It calls on the Commission to "Urgently analyse and address the risk of carbon leakage in order for appropriate measures to be implemented in the event that other countries do not commit to taking adequate measures to reduce greenhouse gas emissions in the context of an international agreement. An international agreement remains the best way of addressing this issue."

They also agreed to "Collaborate in the development of a comprehensive EU energy security strategy for the EU" later this year.

Business

The communique calls for "an EU Small Business Act that delivers a package of measures aimed at cutting EU regulation for small businesses, including making more use of exemptions from regulations." We'll believe that when we see it working, but it's interesting nonetheless.

Listening to Sarkozy talking to Parliament. Lashings and lashings of Franco-British history.

But despite the warm words, as soon as you move from the general to the particular things are going to be rather more difficult. For example:

- Sarkozy talks about Britain and France leading on the environment. But is he going to let Britain out of the EU's biofuels target, which the UK now seems to have turned decisively against?

- Sarkozy says he is "open" to CAP reform he means moving from higher subsidies towards higher tariffs. Thats the opposite of what the UK wants.

- When he says "there can't be 27 different immigration" policies he causes a sharp intake of breath in Downing Street. Will Brown really agree to a single EU-wide definition of asylum?

- Sarkozy wants to have a 60,000 strong common intervention force. But that can only divert resources away from the war in Afghanistan - the last thing Brown wants.

There are plenty of other rather tricky issues too. Have a look at our briefing note for the gory details. Nonetheless it will doubtless get gushing coverage on the TV news ce soir. As usual, the devil is in the detail, which is never reported.

Below is an email which we have sent to all UK MEPs today.

It follows a whole series of disturbing reports over recent weeks - for example see:

Times
BBC
Sunday Times
Daily Mail

Most MEPs are away this week - so we probably won't be publishing our first summary of their responses until next week. If we get a good response from UK MEPs we will be broadening it out to all MEPs.

Let us know what you think and about where we should go with this next.

----------------

European Parliament Transparency Initiative

Following a series of damaging stories about the European Parliament in recent weeks we are writing to all UK MEPs asking for your help in restoring trust in the Parliament.

The irregularities discussed in the recent internal audit report paint a picture of widespread abuse of the current expenses system.

Our aim is to find a way to reassure voters that UK MEPs are not in any way implicated in these problems.

That is why we are today writing to all UK MEPs asking them if you will state:

1. Who is your paying agent/service provider?

2. What are his or her book-keeping or accountancy qualifications?

3. How much of the money claimed by your paying agent or service provider since your election has been paid out so far, and how much is still in his or her account?

4. Have you ever claimed less than the full entitlement, or repaid any excess?

5. Do you employ any family members?

6. Are you prepared to list the people currently in your employment (not their salary levels)?

We are not seeking to criticise Members of the Parliament for employing family members. We accept the argument that in many cases family members will work longer hours for less money than anyone else. However, it is essential to ensure that such arrangements are not abused, and we believe transparency is the best way to ensure this.

We believe disclosure of these details will help to restore trust that public money is being well spent. Our aim in this initiative is to restore confidence in the Parliament and MEPs of all parties. We will be publishing regular reports on the progress of the initiative.

We are very grateful for your help in this.

Please do not hesitate to get in touch if you have any questions about the initiative.

Many thanks

Gordon Brown returns again and again to Black Wednesday. He is always keen to remind people of Cameron’s role in that credibility-shredding day.

As of yesterday, he might want to stop banging on about it.

As of yesterday the pound has fallen by more since the Prime Minister took office than it did on black Wednesday.

The day before Brown took over the pound bought you 1.49 euros. It is now worth 1.269 euros – a fall of about 14%.

Have a look at the graph. Norman Lamont's era is in tory blue, and Brown's is in fetching pink.

The day before black Wednesday (16 September 1992) the pound got you DM 2.78. After black Wednesday it was about 12% down, before falling to 14% down on 5 October - the low point of Black Wednesday which we have now surpassed.

Brown could argue that the real low point was long after black wednesday in March 1993. But looking at what happened after black wednesday makes the comparison worse. At the equivalent point nine months after black Wednesday the pound was back up to 2.49, or just over 10% down. It was the same after a year.

On the other hand, If the current trend continues the pound will be down about 18-20% by Brown’s first anniversary. Brown's Black Wednesday may be happening more slowly compared to Lamont's - but it could be bigger.

Is this a bad thing? Yes and no.

It certainly isn’t a huge vote of confidence in the UK economy. In fact the pound was the only currency to fall against the dollar yesterday.

But on the positive side, the fact that outside the euro the UK can have appropriate interest rates and can gain competitiveness from a falling pound is extremely good news as the world economy heads downwards.

Euro member states like Spain and Ireland are going to have, er… “interesting times” if they suffer from property crashes.

They can’t cut rates, and the ECB has set its face against taking action. Fair enough: inflation in the eurozone is above target and German exports are doing fine. So the struggling member states of the periphery are on their own.

In the Telegraph Ambrose Evans Pritchard points out that the Fed taking manic action to stave off recession while the Bundesbank ECB sits on its hands is reminiscent of the conditions just before the 1987 crash.

If things do get worse it will be the first real test of the euro system. How will it fare? In the good times member states have done little to prepare for problems and run deficits at the top of the cycle. France and Germany trashed their own fiscal rules at the first sign of trouble in 2002. They have failed to resolve structural questions like the eurozone’s lack of a lender of last resort.

So while the pound might be falling like a stone, this is not like 1992. Remember, Britain’s exit from the ERM was a good thing – it was being in it that was the problem. With interest rates subordinated to an artificial exchange rate target, the ERM became rightly known as the Eternal Recession Mechanism.

At least in 2008 the authorities have the ability to respond if things do get worse: with a free hand on fiscal policy; a flexible exchange rate; and ultimately even control over the monetary target . And if you don’t think they are doing a good job… at least you can get rid of them.