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Brussels Briefing: Poland’s day of reckoning

mer, 13/01/2016 - 09:23

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Flag-waving protesters demonstrate against Poland's new media law in Warsaw last week

“I regarded your letter as an attempt to exert pressure upon the democratically elected parliament and government of the sovereign Republic of Poland.” Not a phrase you’d normally expect in official governmental communications between two ministerial-level politicians in the EU. But it was part of an invective-filled response to Frans Timmermans, the European Commission’s first vice-president, from Polish justice minister Zbigniew Ziobro sent Monday night ahead of today’s highly-anticipated European Commission debate on two new laws that many critics believe undermine rule of law in Warsaw.

Despite the tendentious tone of the letter in response to questions on legal changes that will make it difficult for the country’s constitutional court to overturn legislation – and a similarly direct letter from senior diplomat Aleksander Stepkowski in response to concerns about a new Polish media law – officials tell us that Brussels is likely to keep its powder dry at today’s meeting, at least for now.

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Catégories: European Union

Vestager: Not a party in the USA

mar, 12/01/2016 - 10:44

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It wasn’t so much what she said, it was how she said it. On Monday, Margrethe Vestager, the European Commission’s feared competition chief, announced her latest in a series of cases cracking down on sweetheart tax deals offered to multinationals by ordering Belgium to claw back €700m in illegal tax breaks to at least 35 companies.

The decision itself had been flagged up a month ago by Belgium’s finance minister, Johan Van Overtveldt, so it wasn’t really a surprise. But in announcing the decision, Ms Vestager went out of her way to highlight a common trait of those able to avoid taxes through the Belgian scheme (about €500m of the €700m). “Most of the companies benefiting are European; it is also European companies that avoided the majority of the taxes under the scheme, which they now have to pay,” she said at a midday news conference.

The statement stood out because it comes after American officials have privately raised concerns over the fact that three of the four initial cases in her corporate tax crackdown targeted US companies: Apple, Amazon and Starbucks. Last month, she expanded the list to include McDonald’s. The private grumbling became public in September when Robert Stack, the US Treasury’s man in charge of international tax policy, broke cover to complain about how the investigation would affect American corporate tax revenues, and Ms Vestager acknowledged that she had flagged up European companies in the Belgian scheme to emphasise her services’ impartiality.

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Catégories: European Union

Leaked: Commission’s planned VW response

lun, 11/01/2016 - 19:34

The revelations that Volkswagen was rigging emissions tests have left a trail of destruction in their wake: a once proud European champion has seen its reputation dragged through the mud, millions of owners of “clean diesel” cars have found out they were hoodwinked and – most importantly for Brussels – the EU’s current system for policing auto manufacturers has been exposed as deeply flawed.

EU officials and politicians now regularly lament that it was the US’s powerful Environmental Protection Agency, rather than any European authority, that revealed the company’s use of illegal defeat devices to cheat in emissions tests – even though the practice was going on right under everyone’s noses on both sides of the Atlantic.

Although most of the power to test and certify vehicles falls to national regulators, the European Commission has come in for its share of the blame in failing to better enforce rules in this area. As we reported last week, it is preparing plans for overhauling the EU’s moribund car approval system. But will they go far enough?

A draft of the measures, obtained by Brussels Blog and posted here, makes it clear that the commission views the VW scandal as a game changer. Prior to the revelations, the commission was planning a limited overhaul of EU requirements; much more far reaching options are now on the table.

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Catégories: European Union

The endgame in Spain?

lun, 11/01/2016 - 10:49

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Mr Mas congratulates Mr Puigdemont after Sunday night's election in Barcelona

It’s been three weeks since Spain’s inconclusive national elections left the country in an uncharacteristic political stalemate. As one of the last remaining EU countries dominated by two centrist parties – and a two-party system where leaders have some of the strongest tools anywhere to impose strict discipline on backbenchers – it has normally been clear on election day whether the centre-right Popular party or centre-left Socialists had a majority in the 350 congress of deputies. But for the first time since it returned to democracy, neither of the country’s two largest parties secured more than 30 per cent of the vote in the December 20 contest, and the second-place Socialists (who polled 22 per cent) have repeatedly refused to join a grand coalition with the Popular party (28.7 per cent) of Prime Minister Mariano Rajoy.

That might all change this week because of some fast-moving developments in Catalonia which, until now, looked headed towards a re-run of regional elections in March. First, Catalonian independence leader Artur Mas, whose Junts pel Si coalition won the regional elections in September, unexpectedly stepped down as leader on Saturday, a week after the far-left pro-independence CUP party vowed not to join in a coalition with Mr Mas to govern the region. Mr Mas’ resignation cleared the way for his less controversial ally Carles Puigdemont to take over Junts pel Si, and on Sunday Mr Puigdemont was voted leader of Catalonia in a special session of the regional parliament.

That decision could set off two more unprecedented moves that are likely to dominate Spanish political debate this week: the Socialists may now think again about joining Mr Rajoy – if not in a grand coalition at least in support of a Rajoy-led minority government – as a way to create an anti-independence united front in Madrid. And the Catalonian government is likely to move more quickly towards creating all the trappings of independence, including a central bank and tax authority. Last night, Mr Rajoy warned darkly that he had “given instructions” to prevent any illegal act from going into law in Catalonia. “I am going to defend democracy in all of Spain,” he said.

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Catégories: European Union

Warsaw sends Brussels a warning

ven, 08/01/2016 - 14:13

The Polish government has sent a punchy defence of its media reforms to Brussels, accusing the EU of getting its facts wrong and warning of the “undesirable effects” any crackdown on Warsaw will bring.

The letter to the European Commission’s first vice president Frans Timmermans, which can be read in full here, lays out Poland’s defence of its decision to sack senior management at state media outlets.

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Catégories: European Union

Talking Turkey

ven, 08/01/2016 - 08:58

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Even at the time the EU signed its “joint action plan” with Turkey at a high-profile summit in November aimed at stemming the flow of refugees into Europe, Turkish leaders were cautious. “Nobody can guarantee anything,” Ahmet Davutoglu, the Turkish prime minister, said even before the ink on the deal was dry. “I wish I could say the number will decline but I cannot because we do not know what will happen in Syria.”

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Catégories: European Union

Cameron’s toughest Brexit task: Tory party management

mer, 06/01/2016 - 10:10

This is our new daily Brussels Briefing. To receive it via email every morning, sign up here.

David Cameron, the British prime minister, went before his parliament on Tuesday to report on last month’s EU summit, where leaders for the first time debated his request for a renegotiated relationship with Brussels ahead of an in-out referendum at home. During the appearance, he dropped a bit of a bombshell: his ministers will be allowed to campaign for Brexit even if his government recommends staying inside the EU. “It’s never been my intention to strong-arm people into a position they don’t believe in,” he told the House of Commons.

That sets up the prospect of Mr Cameron, widely expected to campaign for membership once he reaches a renegotiation deal at February’s EU summit, on the opposite side of such government luminaries as Iain Duncan Smith, the work and pensions secretary who was once Tory leader himself.

Our Brexit watcher in the FT’s Brussels bureau, Alex Barker, says that while the decision raised eyebrows even within his own party – and may lead many in Brussels to wonder what happened to the sacred British convention of a cabinet’s collective responsibility – there may not have been much else Mr Cameron could have done. Here’s Alex’s take on how Mr Cameron is tackling what may be his hardest Brexit task yet, managing his own party:

For some in Brussels, allowing British cabinet ministers to campaign against their government on such an existential question as EU membership will be bemusing, to say the least. Michael Heseltine, the europhile former cabinet minister, once said Cameron would be a “global laughing stock” if he lifted collective responsibility for the cabinet. Ken Clarke, another of the Tory party’s rare pro-Europeans, said it was a sign of the extraordinary challenge Mr Cameron faces in avoiding “splitting the part” as the referendum campaign revs up.

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Catégories: European Union

Is Poland becoming the new Hungary?

mar, 05/01/2016 - 17:20

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Thus far, Brussels appears more willing to take on the Poles than it was the Hungarians. Just days after the new media law was introduced, Jean-Claude Juncker, the European Commission president, has announced he will hold a debate on the Polish moves at the commission’s weekly meeting next week.

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Catégories: European Union

EU wonders (out loud): Japan trade deal worth it?

jeu, 17/12/2015 - 16:53

Why don’t they want Belgian chocolates? Or Italian spaghetti?

Europe’s frustration is mounting over its slow, difficult trade negotiations with Japan. The 15th round of talks is coming in February next year, and Europe is hungry for signs that it is worth carrying on.

In October, Japan joined the US and 10 other nations in sealing the Trans-Pacific Partnership, which covers 40 per cent of the global economy. But there is little sign of that momentum carrying over into a quick deal with Europe.

Mauro Petriccione, Brussels’ chief negotiator with Japan, warned on Thursday that enthusiasm for an accord with the world’s third biggest economy could wane if the deal is not finalised next year.

“If we don’t make it in 2016, we’ll have to explain why, and we cannot exclude a resurgence of the scepticism towards the possibility of a new Japan-EU [free trade agreement] that we had before we started,” he told reporters. “It took us a long time to persuade sceptics that it was worth trying this. If they see that we don’t succeed in 2016, they will start asking themselves questions again.”

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Catégories: European Union

Brexit: 9 EU endgames for Cameron on migration

jeu, 17/12/2015 - 15:40

Britain's David Cameron addresses the press on his way into the EU summit on Thursday evening

David Cameron is in a hole. His flagship policy to curb EU migration – a four-year ban on benefits for migrant workers – looks doomed. When it was announced more than a year ago, Cameron was told it violated a fundamental EU principle of non-discrimination. If the EU stands for anything, it is ensuring EU workers don’t pay a higher effective tax rate on the basis of their passport.

This was flagged up by British officials at the time. Cameron nevertheless ploughed on. While Downing Street were drafting the Conservative party election manifesto, aides suggested leaving out the four-year idea. He ploughed on. When Mr Cameron preparing a letter to other EU leaders on his reform demands, he was told by Whitehall and Brussels the four-year ban was all but impossible and should be dropped. He ploughed on.

The final reckoning may come this evening. Cameron makes a make-or-break pitch for the idea. Having spent far too long trying to understand how the problem will be fixed, it may also be my last opportunity to inflict a benefit reform listicle on Brussels Blog readers.

So while there is still time: behold the nine ways Cameron’s four-year benefits saga may end.

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Catégories: European Union

Is Davutoglu seeking another EU summit invite?

lun, 14/12/2015 - 16:24

Davutoglu, left, and Tusk embrace after last month's EU-Turkey summit in Brussels

During the height of the Donbass crisis, Ukrainian diplomats repeatedly managed to get President Petro Poroshenko into EU summit meetings even when he wasn’t explicitly invited – something that drove Herman Van Rompuy, then the European Council president, to distraction.

Are Turkish diplomats now trying to repeat the Ukrainian model?

Ahmet Davutoglu, the Turkish prime minister, is now scheduled to be in Brussels on Thursday – the same day the final two-day EU summit of the year kicks off – as part of a mini-summit of EU leaders hosted by Austrian Chancellor Werner Faymann.

The gathering, which is to be held at the Austrian embassy, will include leaders of several countries who back an upcoming “resettlement” proposal by the European Commission, which would push EU countries to take anywhere from 200,000 to 500,000 Syrian asylum seekers currently in Turkey.

Thus far, the attendees include Jean-Claude Juncker, the commission president, along with German Chancellor Angela Merkel and the leaders of Sweden, Greece, Finland, Luxembourg, Belgium and the Netherlands. And now Davutoglu as well.

Donald Tusk, Van Rompuy’s successor as summit chairman, has made it clear that Davutoglu will not attend the summit itself, particularly since the Turkish prime minister was already feted at a summit of his very own just two weeks ago. Tusk’s displeasure is shared by several other countries who don’t think it is proper for other foreign leaders to gatecrash the EU party.

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Catégories: European Union

Does Jonathan Hill hate car hire companies?

jeu, 10/12/2015 - 11:59

Since he took office a year ago as the EU’s financial services commissioner, Jonathan Hill has become renowned for his low key, calm approach – except when it comes to how he feels about car hire companies.

The details remain sketchy, but the demons of some previous holiday trauma seem to haunt this otherwise affable politician. Last week, he used the medium of Twitter to call on people to “Let us know your worst holiday car hire experience.”

A hearing he held last year with a committee of the UK House of Lords (of which he is also a member) become dominated by the issue of insuring rented cars, as peers took turns to let off steam about their encounters with unscrupulous rust bucket purveyors.

What, you may ask, has this got to do with Hill’s remit as the grandly titled European commissioner for financial stability, financial services and capital markets union?

The answer is: quite a lot, and this became clearer when the Commission published a policy paper on tackling the day-to-day financial irritants that people encounter when crossing borders, be it a lack of transparency on the fees you are charged when you transfer money abroad, an inability to take your health insurance policy with you when you move to another country or, yes, frustrations with ludicrously high insurance premiums on hire cars.

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Catégories: European Union

An FTT Christmas miracle? Think again.

mar, 08/12/2015 - 14:49

Luxembourg's Pierre Gramegna, chair of Tuesday's meeting, calls the session to order

With the festive season comes all kinds of traditions in Brussels: mulled wine, Saint Nicholas, and another deadline for nations to strike a deal on a financial transactions tax.

But while last year ministers found themselves empty handed when a December deadline for an agreement rolled around, this year it’s different. Sort of.

As Bruxellois bought their sapins de noel (Christmas trees) on the pavement outside the EU summit building, inside another Sapin (Michel), the French finance minister who has been one of the tax’s biggest champions, was full of holiday cheer.

During a meeting of EU finance ministers, Sapin (the minister) hailed a breakthrough moment in the nearly three-year slog for an FTT, which would issue a levy on all stock and a derivative trades in the ten EU countries who are part of the scheme.

Could this Christmas miracle really be true? Could there really be a deal?

In practice, it’s more like half of a deal. Pierre Moscovici, the EU commissioner in charge of tax issues, found a convoluted combination of tenses to sum it up: “We have now the main parameters of what this FTT should be, and hopefully will be.”

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Catégories: European Union

Reader’s guide to leaked migration communiqué

mar, 08/12/2015 - 13:51

Refugees crossing Greece's border with Macedonia wait to enter a camp earlier this week

The EU’s debate over how to deal with the ongoing refugee crisis has been so full of jargon and euphemisms that in can be nearly impossible for anyone outside the Brussels bubble to know what, exactly, leaders are actually discussing.

Such is the case with a draft communiqué for next week’s EU summit, circulated to national capitals on Monday. The document (which Brussels Blog got its hands on and has posted here) includes seven measures leaders would agree, if the draft is adopted. But all seven may be impossible to understand to those not following every twist and turn in the debate.

As a public service, Brussels Blog hereby offers a translation from eurocrat-ese into English of the migration section of the draft communiqué.

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Catégories: European Union

After fourth US tax target, Vestager eyes Belgium

ven, 04/12/2015 - 15:08

Johan Van Overtveldt, Belgium's finance minister, has vowed to fight Vestager

Margrethe Vestager, the EU’s competition chief, is regularly in the headlines for her corporate tax battles with big US companies: Google, Amazon, Apple and now McDonald’s. But don’t overlook her investigation into Belgium’s tax perks scheme for multinationals. A verdict appears to be imminent, and the repercussions will be felt well beyond the country of 11m.

Earlier this week, Johan Van Overtveldt, finance minister, told the De Standaard daily that Belgium was “highly likely” to have to claw back €700m from companies that have benefited from Belgium’s special tax incentives package.

Van Overtveldt is promising to resist Vestager’s tax justice campaign, but she isn’t a commissioner to change her mind too quickly.

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Catégories: European Union

EU migration “wish list” to DC includes intel help

lun, 30/11/2015 - 15:57

Barack Obama speaks with Angela Merkel on the sidelines of the Paris climate summit

Now that the EU has signed a tentative deal with Turkey to help it stem the flow of migrants coming from the Middle East, Brussels appears to be turning to other allies for help – including the US.

According to diplomats, the Obama administration has for months been asking for a “wish list” from the EU on ways it can help, and in recent weeks it finally got that list from the European Commission. Brussels Blog got its hands on the five-page memo, titled “Potential areas of US political and operational support on international immigration and refugee crisis”, and has posted it here. (To give credit where credit is due, our friends and rivals over at the Italian daily La Stampa got their hands on it before we did.)

The document contains few surprises, including a lot of requests for US funding. But there are a couple of “asks” that are particularly interesting. First, the Commission is seeking Washington’s help in pressuring Sunni allies in the Gulf to both help with money and with the more politically combustible issue of accepting some of the hundreds of thousands of refugees that have been fleeing Syria. Or, in the words of the document:

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Catégories: European Union

Terrorist threat for Brussels raised to “imminent”

sam, 21/11/2015 - 08:42

The Belgian government raised the terrorist alert level for Brussels to its highest level on Saturday, an indication authorities think an attack is “imminent” amid an ongoing manhunt for the last remaining accused Paris attacker, believed to be still at large in the Belgian capital.

Metro lines were closed and Belgian officials issued an appeal to the local population to avoid crowded places, including “concerts, major events, train stations and airports, public transport [and] places of high commercial concentration”.

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Catégories: European Union

Ireland (still) ♥ Apple

jeu, 12/11/2015 - 12:01

Apple's Tim Cook, left, chats with CBS's Les Moonves at Sun Valley, Idaho in July

With Margrethe Vestager handing down her decision last month that Starbucks and Fiat received unfair tax benefits from the Netherlands and Luxembourg, most believe it is just a matter of time before the EU competition chief does the same with the biggest of the tax cases she is examining: Apple’s comfortable arrangement with Ireland.

But in case anyone in Brussels expected Ireland to distance itself from the California-based tech giant ahead of the Vestager decision, the FT’s man in Dublin, Vincent Boland, has sent Brussels Blog a note on just how close the relationship remains – as evidenced by the reception chief executive Tim Cook received on a rare visit to the Irish capital:

Cook was on his way to Cork, where he announced that Apple’s operations in the south coast city would expand to create up to 1,000 new jobs by the middle of 2017. That will take the total workforce there to 6,000 – which he said would represent a quarter of the company’s workforce in Europe.

It is the sort of announcement the Irish government loves. Enda Kenny, the Taoiseach (prime minister) tweeted a photograph of himself and a smiling Apple boss: “Great to chat with Tim Cook on the day apple announce 1000 new jobs in Cork.”

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Catégories: European Union

Operation Guilt Trip: Brussels heaps pressure on member states over refugees

mar, 03/11/2015 - 18:04

After a string of bad-tempered, late-night summits, leaders from across the EU agreed an ambitious programme of policies to try to solve the refugee crisis.

There has been one – pretty major – hitch: member states have so far been reluctant or unable to do what they said they would. Now, in a bid to get national capitals to hurry up, Operation Guilt Trip is go.

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Catégories: European Union

How the EU is responding to the refugee crisis. . . with 45 power cords and 500 wellies

ven, 30/10/2015 - 16:04

Faced with a once in a generation refugee crisis, and a brewing humanitarian disaster in the western Balkans, Germany has stepped up. . . and pledged 45 extension cords.

Berlin’s donation of a few dozen power cables to Croatia has been revealed as part of an attempt by Brussels to pressure member states by demonstrating the deficit between their pledges of help for Europe’s refugees and their actions – and going into excruciatingly granular detail in the process.

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Catégories: European Union

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