Time for a re-think?

The EU attempts to revive its efforts
to combat climate change
Pages 6 and 7
Lobbying intensifies as
MEPs debate data rules
A frenzied lobbying campaign
by global corporations, industry
groups and privacy campaign-
ers is under way in the Euro-
pean Parliament as MEPs con-
sider a European-wide law to
govern data protection.
The proposed regulation
aims to close the gaps between
divergent national interpreta-
tions of EU privacy rules; oblige
companies to seek the consent
of users to certain types of on-
line tracking; give users more
control over their data; and em-
power national regulators to im-
pose fines of millions of euros on
non-compliant companies.
Proposed a year ago by Vi-
viane Reding, the commission-
er for justice, fundamental
rights and citizenship, the regu-
lation is among the most con-
tentious pieces of legislation to
come before the European Par-
liament in its current five-year
term and is the subject of
intense lobbying on both sides
of the Atlantic.
“I think this is the biggest lob-
bying that Brussels has ever
seen and probably bigger than
anything in the United States as
well,” said Joe McNamee, the
director of European Digital
Rights, a privacy campaign
The Parliament’s industry
committee was voting on its ver-
sion of the legislation as Euro-
pean Voice went to press late
yesterday (20 February). The
committee’s version, drafted by
centre-right Irish MEP Seán
Kelly, seeks to make the regula-
tion more business-friendly, for
example by expanding exemp-
tions for small and medium-
sized enterprises (SMEs) fore-
seen in the Commission’s
Since the proposal could af-
fect practically any business, it
has been the subject of intense
lobbying. “I had an open door to
anybody who wanted to meet
me,” Kelly said, citing “all types
of stakeholders from the big
companies like Google and
Facebook to SMEs to consumer
groups”. The MEP said that he
had held 200 meetings with in-
terested parties, leading to more
than 900 proposed changes.
American corporations with
operations in Europe in princi-
ple welcome the replacement of
27 national regimes with a sin-
gle set of rules across the EU.
But they also fear that tougher
privacy rules in Europe will
make transatlantic commerce
more difficult, a view that is ap-
parently shared by the Obama
administration. Civil-liberties
campaigners have protested
against the corporate lobbying.
On 4 February, they wrote to the
United States administration to
protest against “an unprece-
dented lobbying campaign to
limit the protections that Euro-
pean law would provide” from
both the US government and
American corporations.
Alexander Alvaro, a German
Liberal MEP who follows the
legislation on behalf of the Lib-
erals and Democrats group,
conceded that lobbying was in-
tense but said there was nothing
extraordinary about it. He ac-
cused privacy campaigners of
misrepresenting the issue at the
core of the draft legislation –
how to reconcile companies’
legitimate desire for clear rules
that do not impose an undue
burden on business with
strengthened protection of the
privacy of individuals. “The ap-
pearance of an antagonism be-
tween industry and civil society
is being created to suggest that
our civil rights are being sold
off,” Alvaro said. “That does not
correspond to reality. Emotions
are being whipped up.”
McNamee said: “The prob-
lem is that the regulation is so
complex and so long that the
discussion has been swamped
by concerns that have been
dreamt up by lobbyists who
have not actually read the pro-
He said that this “white noise”
had drowned out legitimate
concerns from industry.
The Parliament’s lead com-
mittee on the proposed legisla-
tion is the committee on civil
liberties, justice and home af-
fairs. It will adopt its position on
24-25 April and is supposed to
take into account the views of
the other committees. In addi-
tion to the opinion of the indus-
try committee, being voted last
night, the committee on inter-
nal market and consumer pro-
tection adopted its opinion on
23 January, the committee on
employment and social affairs
votes today (21 February) and
the committee on legal affairs
on 18-19 March.
Toby Vogel
21 –27 February 2013
Volume 19 Number 7
MEPs and Council break deadlock on rules
for monitoring eurozone national budgets.
At the table
New hope for Kosovo-Serbia talks. PAGE 8
Tax and divide
How the financial transaction tax divides
Europe. PAGE 8
Europe’s hope?
What the front-runner in the Italian elections
might mean for Europe. PAGE 11
Ukraine’s premier wants
a functioning car and a
functioning country.
Sanctions galore
Sanctions –against Syria, Zimbabwe
and North Korea –featured prominently
on EU foreign ministers’ agenda, as did the
crisis in Mali.
Two-pack pact
Mykola Azarov
ON THE WAY OUTBoyko Borisov, Bulgaria’s prime minister, leaves the national parliament in Sofia yesterday (20 February). Borisov yesterday
announced the resignation of Bulgaria’s government because of protests against high energy prices. REUTERS See page 2
BULGARIA Government resigns
is printed on recycled paper
9 771370 601128
0 7 >
Price: Eurozone €4.70 UK £4.20
Back to the land
Farm ministers contemplate CAP reform after the
2014-20 budget deal. NEWS 4
European Commission adopts
its monthly infringements
Olli Rehn, the European com-
missioner for economic and
monetary affairs and the euro,
presents the Commission’s
winter economic forecast for
2013-14 covering gross domes-
tic product, inflation, employ-
ment and public budget
deficits and debt forecasts for
all 27 member states.
Energy ministers meet, Brus-
sels. On the agenda: proposed
changes to the 1998 fuel
quality directive and the 2009
directive on the promotion of
the use of energy from renew-
able source.
European Parliament commit-
tee meetings, Brussels. Com-
mittees on foreign affairs, eco-
nomic and monetary affairs,
environment, public health and
food safety, regional develop-
ment, and constitutional
EU-Ukraine summit, Brussels.
Agriculture and fisheries min-
isters meet, Brussels. On the
agenda: common agricultural
policy reform package, fraudu-
lent use of horsemeat in the
food chain, general approach
to the regulation on the com-
mon fisheries policy, and state
of play of the negotiations with
Morocco for the establishment
of a fisheries partnership
Weekly meeting of college of
commissioners, Brussels. On
the agenda: legislative propos-
al amending the Schengen
borders code, proposal to set
up a registered traveller pro-
gramme, and regulation to set
up an entry/exit system for
third-country nationals cross-
ing EU external borders.
Fair trade?
China’s trading relationship with the EU comes under
The obstacles that lie in the way of ambitions for an
EU-US trade deal within two years. COMMENT 16
Twenty years young
Party time for European Socialists. ENTRE NOUS 19
Isolated example? 8
Why Ireland’s restructuring should not
be a model for Cyprus. COMMENT 14
21 February 2013
Steelmaker agrees
to suspend job cuts
BULGARIAGovernment resigns
Energy protests force out
Bulgaria’s government
ArcelorMittal, the multina-
tional steelmaker based in
Luxembourg, has agreed to
suspend plans for hundreds
of job cuts. The announce-
ment followed talks between
Lakshmi Mittal, the compa-
ny’s chief executive, and An-
tonio Tajani, the European
commissioner for industry
and entrepreneurship.
Tajani urged the company
to wait until the Commis-
sion published its action
plan for the steel industry,
scheduled for June, before
deciding on how it would re-
structure its sites at Liège, in
Belgium, and Florange, in
France, which employ about
3,000 staff.
ArcelorMittal had an-
nounced plans to reduce the
capacity of the two plants
and cut hundreds of
jobs, prompting widespread
protests. Tajani said that
Mittal had assured him that
neither site would close
completely and that any
workers affected by the
reduction in capacity could
be transferred to other sites
in the same group.
In a statement issued on
Tuesday evening (19 Febru-
ary), Tajani said that
ArcelorMittal’s agreement to
suspend restructuring plans
until June was “a step in the
right direction”.
A spokesman for Tajani
said yesterday that the com-
missioner was “appealing to
member states, European
industry and trades unions
to work together with the
Commission to produce an
ambitious plan for June and
give the steel industry a
oyko Borisov, the
prime minister of Bul-
garia, announced yes-
terday (20 February) the res-
ignation of his centre-right
government after a week of
increasingly violent nation-
wide protests against high
energy bills.
As the complaints against
price hikes intensified over
the course of a week, Borisov
demanded that the head of
the national energy and wa-
ter regulator should resign.
The regulator had increased
prices by 13% in July 2012,
but the effects were not felt
until winter bills arrived.
Borisov this week ordered
the independent regulator to
reduce prices by 8%.
The prime minister also
responded to protesters’ crit-
icism of foreign-owned
energy companies by an-
nouncing his government’s
intention to fine two
distribution firms, Austria’s
EVN and EnergoPro. He al-
so called for the Bulgarian
subsidiary of CEZ, 70% of
whose shares are owned by
the Czech government, to
lose its licence.
CEZ responded that such
moves would be “a gross vi-
olation of the laws of Bulgar-
ia as a member state of the
European Union”.
Borisov had sacked his fi-
nance minister, Simeon
Djankov, on Monday (18
February) in response to the
protests, but decided on
Wednesday morning – re-
portedly without consulta-
tion with others in his party
– to bring his government to
an end after 25 people were
injured in overnight clashes
with police. There were also
two cases of self-immolation
in recent days, possibly
linked to the protests.
“I will not participate in a
government under which
police are beating people,”
said Borisov, a former career
policeman, who has been
prime minister since July
2009. “Every drop of blood
is a shame for us.”
No date has been set for
early elections, but there are
suggestions that they could
be held in April or May. Par-
liamentary elections had
been scheduled for 7 July.
The Bulgarian parliament
will today vote on whether to
approve the government’s
resignation. During the crisis,
opposition parties, chief
among them the Socialist
Party, repeatedly called for the
government to stand down.
But when Borisov did so,
Sergei Stanishev, the leader of
the socialists, who is also the
president of the Party of Eu-
ropean Socialists, described
him as “desperate and
President’s choice
The choice of an interim
government lies with Presi-
dent Rosen Plevneliev, a for-
mer minister in Borisov’s
government. Borisov has
said that his party will not
play any role in a stop-gap
Delyan Dobrev, Bulgaria’s
energy minister, has accused
CEZ, which supplies electric-
ity to 2.1 million Bulgarian
households, of awarding 80%
of its contracts without fol-
lowing tender procedures.
The state regulator yesterday
said that it had found 21 in-
stances of CEZ violating pub-
lic-procurement laws. CEZ
denies the claims, and the
Czech prime minister, Petr
Necˇas, has asked the Bulgar-
ian government to explain its
action. Martin Kuba, the
Czech energy minister, raised
his concerns in Brussels on
Tuesday, at the competitive-
ness council and in meetings
with three European com-
missioners. A meeting of EU
energy ministers is to be held
in Brussels tomorrow (22
At an EU summit two
weeks ago, Borisov succeed-
ed in raising the EU’s contri-
bution to the decommis-
sioning of a Soviet-era
power plant, Kozloduy, from
the €210 million proposed
in November to €400m.
The decommissioning of re-
actors at Kozloduy has
steadily reduced Bulgaria’s
energy-generation capacity.
On 27 January, Borisov
was defeated in a referendum
about the construction of a
new nuclear power plant at
Belene. Borisov had aban-
doned his earlier support for
such a plant, favouring a new
reactor at Kozloduy.
Ian Wishart
Bitter dispute over
rising energy prices
Elections likely to be
held in April or May
Andrew Gardner
European Voice’s reporters produce a
round-up of European stories in the
morning papers every day. Look for
the Paper Clip online.
VIOLENT CLASHESA man confronts police during a protest in Sofia against high energy prices.
21 February 2013
Cleve Beaufort is one of over 100,000 employees working for
the world’s most sustainable car company.* He and his team in
Spartanburg supply over 50% of the plant’s total energy needs
from a local landfill, reducing carbon emissions by 92,000 tons
annually. Learn more:












21 February 2013 NEWS
FINANCE Regulation
MEPs and Council agree terms for
economic surveillance of eurozone
Commission will monitor
national budgets
Member states opposed
to debt-sharing proposal
Ian Wishart
backs plan to
cut number
of MEPs
Tim King
The European Parliament’s
constitutional affairs com-
mittee has agreed on a plan
for how to reduce the num-
ber of MEPs after the next
The Lisbon treaty sets a
maximum size for the Par-
liament of 751 MEPs after
the 2014 election, with no
country permitted more
than 96 MEPs. The current
size of the Parliament is 754
MEPs and Croatia is joining
the European Union in July,
adding 12 MEPs.
The question before the
constitutional affairs com-
mittee was how to distribute
the required reduction in
seats. After Germany’s dele-
gation has been reduced in
size from the current 99 to
the maximum of 96, a fur-
ther 12 seats must be given
The committee on Tues-
day (19 February) voted to
approve a plan that would
see 12 countries each lose
one seat. In order of size of
delegation they are: Roma-
nia, Greece, Belgium, Portu-
gal, the Czech Republic,
Hungary, Austria, Bulgaria,
Ireland, Croatia, Lithuania
and Latvia.
The closest vote in com-
mittee – ten votes to nine –
was that Austria rather than
Sweden should be one of
those to have its delegation
reduced. Austria currently
has 19 seats while Sweden
has 20.
Changing allocations
The MEPs who drafted a re-
port for the committee,
Roberto Gualtieri, from the
Italian centre-left, and Rafał
Trzaskowski, from the Polish
centre-right, said that their
guiding principle had been
that no state should gain
seats and no state (apart
from Germany) should lose
more than one. The pro-
posed solution, they said,
was “the one most likely to
win a majority within Parlia-
ment and unanimity in the
Council”. The proposal re-
quires the unanimous back-
ing of the European Council.
The committee also said
that it would propose a per-
manent formula for allocat-
ing seats after the 2019 elec-
tion to take into account
demographic trends and
EU enlargement beyond
Farm ministers to discuss CAP
reform following budget deal cuts
Dave Keating
Farm ministers will meet in
Brussels on Monday (25
February) to discuss reform
of the Common Agricultur-
al Policy (CAP) in the wake
of an agreement by the Eu-
ropean Council on the Euro-
pean Union’s budget for
Government leaders
agreed at a summit two
weeks ago to reduce overall
CAP spending by 13% com-
pared to the 2007-13 period,
more than the 10% reduc-
tion proposed by the Euro-
pean Commission.
Rural development pro-
grammes will be hit hardest
because of a provision in the
summit deal allowing mem-
ber states to switch up to
25% of rural development
funds into the part of the
CAP budget that covers di-
rect subsidies to farmers.
The Commission’s propos-
al to require 30% of direct
subsidies to be conditional on
meeting environmental cri-
teria has been eroded. Na-
tional leaders specified in the
long-term budget that mem-
ber states should be able to
define themselves what
counts as a greening meas-
ure. They also said the fund-
ing could not be made de-
pendent on setting aside 7%
of fertile land for biodiversity
purposes, as proposed by the
Monday’s meeting is ex-
pected to agree the main
outline of the member states’
The agriculture ministers
will also discuss the ongoing
scandal involving horsemeat
found in products labelled as
Yesterday (20 February)
the European Commission
reiterated that no health
threat has yet been identi-
fied and therefore it would
not trigger the EU’s early-
warning system. But mem-
ber states have put in place a
plan to test products across
Europe. The programme,
which will be funded by the
European Union, is testing
some 2,250 samples of beef
products for the presence of
In response to the crisis,
the Federation of Veterinar-
ians of Europe and other
groups are calling for the EU
to create a centralised record
of horse ‘passports’. Such
records are currently only
Fisheries ministers meet-
ing on Tuesday will adopt a
general approach to reform
of the Common Fisheries
Policy (CFP). The Council’s
position has already been set
but there are several areas
still being negotiated, the
most controversial being a
discard ban.
The European Parliament
voted earlier this month for
an immediate end to dis-
cards. Member states are di-
vided on the issue, with
many wanting to delay a dis-
card ban until 2020.
reland has secured the
first major breakthrough
of its presidency of the
European Union’s Council of
Ministers by brokering a
deal on rules to strengthen
economic co-ordination in
the eurozone.
The ‘two pack’ – a pair of
regulations enabling the Eu-
ropean Commission to mon-
itor the budgets of countries
with excessive deficits and
boosting its powers over
countries experiencing fi-
nancial difficulties – was
proposed at the height of the
eurozone crisis in November
Negotiations between the
Council and the European
Parliament – which had to
agree on the legislation’s fi-
nal shape before it could
come into effect – has taken
seven months, with MEPs
attempting to obtain com-
mitments to social spending,
the sharing of national debt
and more democratic ac-
Sharon Bowles, a British
Liberal MEP who chairs the
Parliament’s economic and
monetary affairs committee,
acknowledged that the ne-
gotiations, which concluded
yesterday (20 February),
had been a “long, hard slog”,
but said that the legislation
was part of the “monumen-
tal” strengthening of eco-
nomic governance that the
EU had introduced over the
past two years.
Austerity fears
Many MEPs feared that the
new rules would enshrine
austerity measures and
would prohibit national gov-
ernments from deciding to
introduce more generous
spending or growth-enhanc-
ing policies.
“The European Commis-
sion and the member states
should not use these new
rules as a tool to enhance
austerity,” said Hannes Swo-
boda, the leader of the cen-
tre-left group in the Parlia-
ment, but he said he was
satisfied with the compro-
mise deal.
The Parliament ensured
that the Commission’s coun-
try-by-country budget as-
sessments will have to in-
clude assessments of the
impact of budget cuts on
growth potential, with safe-
guards that any cuts recom-
mended do not put invest-
ment in health and education
at risk.
The Parliament will also
have an involvement in deci-
sions to grant financial assis-
tance to member states
which, up until now, have
been inter-governmental.
Too ambitious
The Parliament failed to get
its more ambitious demands
written into the law, howev-
er MEPs had wanted to link
the legislation to a commit-
ment to pool a proportion of
national debt into a central
eurozone pot.
Many northern eurozone
member states, particularly
Germany, have stated their
opposition to any plan for
debt-sharing. Instead, they
had to be satisfied with a
Commission agreement to
set up a panel to explore the
possibility of a redemption
fund, or Eurobills. The pan-
el will report back by March
2014 and, if felt desirable,
the Commission would
make a proposal by the end
of its mandate in October
“We had to give ground,”
acknowledged Jean-Paul
Gauzès, a French centre-
right MEP, who was one of
the Parliament’s main nego-
The other negotiator, Elisa
Ferreira, a Portuguese cen-
tre-left MEP, said that it had
been difficult to strike the
right balance between dem-
ocratic accountability and
the wish to have a co-ordi-
nated eurozone approach.
“The Parliament improved
the procedures by [ensur-
ing]… that budgetary proce-
dures in each member state
are adequately respectful of
national democratic prac-
tices and social practices of
The two new regulations – which still have to receive approval from
the full European Parliament and the Council of Ministers – will lead
in the eurozone to more intrusive oversight of draft national budgets
by the European Commission. The Commission will inspect each
budget plan annually before the goverment presents it to the nation-
al parliament. The Commission will warn member states if their
budget plans do not conform to stability-and-growth-pact obliga-
tions or other economic policy recommendations.
The Commission will also have greater powers over countries in the
eurozone that it judges to be “experiencing severe difficulties” with
financial stability. The Commission could impose “enhanced surveil-
lance” and recommend to the Council of Ministers that the country
receives financial assistance.
Talks between the European
Parliament and Council of Min-
isters on tougher rules for
banks broke down on Tuesday
(19 February), with MEPs ex-
pressing irritation at member
states’ reluctance to compro-
Negotiators had raised hopes
that a deal was in reach be-
tween the two sides on the re-
vised capital requirements di-
rective and regulation – in part
the European Union’s tool for
implementing globally agreed
Basel III banking rules. But af-
ter an abortive meeting, anoth-
er round has been scheduled
for Wednesday (27 February).
MEPs who took part in the
discussions said that they were
dismayed that the Council was
re-opening issues which they
had believed were settled.
ingAuthority, theflexibilityof
stricterliquidityrules, bank
capital buffersforsystemically
A spokesperson for Ireland,
which is leading the negotia-
tions on behalf of member
states, said “more intensive
work” was needed.
“We are very close to agree-
ment and believe that we can
finalise discussions,” the
spokesperson said.
each member state,” she said.
Rory Montgomery, Ire-
land’s ambassador to the
EU, who led the negotiations
on behalf of member states
since the start of this year,
said that the new rules
struck the right balance be-
tween respecting national
sovereignty and “recognising
the inter-dependence of the
WORTH THE WAIT British Liberal MEP Sharon Bowles said the
legislation is a vital part of EU economic plans. REUTERS
21 February 2013
21 February 2013 NEWS
Row over German attempts
to weaken car pollution limits
MEP calls for expansion
of ‘super credits’ scheme
Testing methods
called into question
Dave Keating
plan put forward
by Thomas Ulmer, a
German centre-right
MEP, to modify the Euro-
pean Commission’s propos-
al to limit emissions from
new cars could make the leg-
islation up to 15% less effec-
tive, a Commission official
warned the European Par-
liament’s environment com-
mittee on Tuesday (19 Feb-
European law requires
carmakers to comply with a
limit on their average emis-
sions of 130g of carbon diox-
ide by 2015, but they have al-
ready met this target years
ahead of schedule. The
Commission proposed last
year to require carmakers to
ensure that the average
emissions of their fleet are
no more than 95g CO
by 2020.
Ulmer’s proposal calls for
a significant expansion of
the use of ‘super credits’,
which would allow carmak-
ers to count clean vehicles at
a premium when calculating
their fleet average. The
Commission has calculated
that the super credits pro-
posed by Ulmer would lead
to an effective 2020 cap of
up to 109g CO
/km, Philip
Owen, a head of unit in the
department for climate
change, told the committee.
Under the Commission’s
proposal, any vehicle that
emits less than 35g CO
would count as 1.3 cars.
Under Ulmer’s proposal, any
vehicle emitting less than 50g
/km would count as 2.5
cars until 2017 and as 2 cars
from 2017 to 2020. Manu-
facturers would also be able
to continue using the super
credits that they have accu-
mulated after 2020, some-
thing not allowed under the
Commission’s proposal.
These super credits would be
particularly beneficial to Ger-
man carmakers which tend
to make larger, heavier vehi-
cles, and so have higher fleet
average emissions.
An internal document
from the European Com-
mission, seen by European
Voice, says that an expansion
of super credits is also being
proposed by Germany in the
Council of Ministers, where
it is asking for clean vehicles
to count as 3.5 cars in 2016,
with this number being re-
duced to 1.5 in 2020. The
Commission warns that the
German and Ulmer propos-
als, “would have implica-
tions for the ability to set fur-
ther CO
targets and for the
possible stringency of those
Fiona Hall, a British Lib-
eral MEP who is guiding the
proposed legislation through
the Parliament’s industry
committee, wants the super-
credits scheme to be
scrapped and replaced with
a ‘flexible low carbon vehicle
mandate’ that would pe-
nalise carmakers if less than
2% of their fleets are low-
carbon vehicles.
Consumers group BEUC
has also criticised Ulmer’s
proposal. “Super credits al-
low carmakers to reduce and
whitewash the average emis-
sion level of their fleet with-
out cutting emissions for the
entire range of their models,”
said Monique Goyens, the
director-general of BEUC.
The full Parliament will
vote on the proposal in July.
Testing methods
MEPs on the environment
committee also discussed the
controversial issue of testing
methods for fuel efficiency
and CO
emissions. A con-
sultancy report published by
the European Commission in
December concluded that
carmakers are using flexibil-
ities in the testing procedures
to make their vehicles appear
to emit less carbon dioxide
than they do in real-world
driving conditions.
The report says the tests
are not mimicking real-
world driving conditions,
but rather creating condi-
tions favourable to lower
emissions. The tech-
niques could account for as
much as half of the recorded
drop in average fleet CO
emissions between 2002
and 2010, the report con-
The Commission is con-
sidering requiring by 2017 a
new testing cycle that is be-
ing developed. In her pro-
posal, Hall says the new test
should be required as soon
as it is available. But Ulmer’s
proposal says current testing
rules should be frozen and a
new procedure should be in-
troduced no earlier than
2020, so that the rules of the
game are not changed for
Ulmer’s proposal to freeze
current testing procedures
came under heavy criticism
from other MEPs. “Why
should we permit a testing
cycle that is a scam?” asked
Swedish Green MEP Carl
Schlyter. “We’re fooling every
car buyer in Europe.”
Karl-Heinz Florenz, a
German Christian Democ-
rat MEP, said: “There is
hardly a greater lie in life
than test cycles.”
BEUC calculates that con-
sumers are paying as much
as €135 more per year than
they might expect because
the emissions tests do
not reflect real driving
ENERGY Emissions
A European Commission
proposal to delay auctioning
of emissions allowances in
the European Union’s emis-
sions trading scheme (ETS)
so as to increase the deflated
price of carbon passed a cru-
cial vote in the European
Parliament on Tuesday (19
The proposal to delay the
auctioning of allowances
scheduled for 2013-15 until
2018-20, called ‘backload-
ing’, was approved by mem-
bers of the Parliament’s
environment committee
(ENVI) by 38 votes to 25,
with two abstentions.
The committee’s backing
was thrown into some doubt
last month after the Parlia-
ment’s industry committee
voted to reject the proposal.
The environment committee
is the lead committee on the
The centre-right Euro-
pean People’s Party group
has taken a stance against
the proposal, but eight of its
members on the environ-
ment committee broke ranks
to vote for backloading.
Ahead of the vote, Point
Carbon, an organisation that
analyses the carbon market,
had even predicted that if
the ENVI committee voted
against the proposal, it
might cause a collapse of
the ETS.
Market analyst Marcus
Ferdinand said a negative
vote would cause carbon
prices, already at a historic
low, to drop by a further €2
per tonne to €3 per tonne.
“It would make the EU ETS
irrelevant as a climate policy
measure at least until 2020,”
he said.
A vote by the full Parlia-
ment will be held in the
coming months. The Parlia-
ment has not yet decided
whether to wait for the ple-
nary vote before beginning
negotiations with the EU’s
member states, which are to
debate the issue next week.
Several countries, notably
Poland, are strongly against
the proposal. Significant
players, including Germany
and the United Kingdom,
have yet to decide their
Plenty of work ahead
Environmental campaign
groups welcomed the out-
come of the vote in the envi-
ronment committee, but
warned that stronger action
was still needed to save the
ETS, which analysts warn is
in danger of collapse. “MEPs
are working with the options
on the table, but there is no
getting around the fact that
no amount of fiddling with
the ETS will make the sys-
tem fit for the challenge of
tackling the climate crisis,”
said Brooke Riley of Friends
of the Earth.
Energy-intensive indus-
tries warned that backload-
ing would erode confidence
in the ETS. “Artificially in-
creasing the carbon price by
withholding or removing al-
lowances will undermine the
competitiveness of Euro-
pean industries by increas-
ing energy bills even further,”
said Gordon Moffat, direc-
tor-general of Eurofer, the
trade association for Euro-
pean steel.
But Eurogas, which repre-
sents the natural gas indus-
try, welcomed the vote. “Eu-
rogas would now like to see
a speedy agreement between
the European Parliament
and the Council to increase
market confidence in the
ETS,” said Beate Raabe, the
group’s secretary-general.
See page 15
MEPs vote to delay auctioning of ETS allowances
Dave Keating
Armenian presidency
Serzh Sarkisian (pictured)
secured himself a second term
as president of Armenia in the
first round of elections on
Monday (18 February), win-
ning nearly 59% of the vote.
The closest of his six rivals,
Raffi Hovanessian, secured the
backing of 37% of voters. The
Organisation for Security and
Co-operation in Europe said
the election respected “funda-
mental freedoms”, but criti-
cised “a blurred distinction be-
tween the activities of the
state and those of the ruling
Syrian arms embargo
The EU’s arms embargo
against Syria, which was to
expire on 1 March, has been
extended for another three
months. However, EU foreign
ministers added an amend-
ment on Monday enabling
countries “to provide greater
non-lethal support and techni-
cal assistance for the protec-
tion of civilians”. The UK wel-
comed the change as “very
Zimbabwe sanctions
The EU’s foreign ministers
agreed on Monday to remove
21 individuals from a blacklist
of Zimbabweans barred from
the EU. The decision shortens
the blacklist to 91 people. Six
government ministers had
their restrictions suspended.
Belgium sought, but failed, to
convince other member states
to end sanctions against a con-
troversial diamond-mining
North Korea sanctioned
The EU on Monday con-
demned North Korea’s test of a
nuclear weapon on 12 Febru-
ary, and extended sanctions to
26 individuals and 33 compa-
nies. EU companies are now
barred from trading in bonds,
gold, diamonds and metals
useable in ballistic missiles.
Trade in a range of other prod-
ucts was already restricted.
Mission to Mali
The deployment of a 15-
month, 500-strong mission to
train the Malian army was for-
mally agreed by EU foreign
ministers on Monday. The mis-
sion is to be deployed in mid-
March. On Friday (15 Febru-
ary), the Commission
earmarked €20 million to help
in areas re-captured from the
21 February 2013
Unified patent
An international agreement to
establish a unified patent court
was signed by ministers from
22 European Union member
states in Brussels on Tuesday
(19 February). The agreement,
which must be ratified by at
least 13 participating countries
including the UK, France and
Germany before it can come
into effect, forms part of the
legislation creating Europe’s
unified patent.
Deep recession
The eurozone was dragged
deeper into recession in the last
quarter of 2012, according to
figures from Eurostat, the EU’s
statistical office, on 14 Febru-
ary. Gross domestic product
(GDP) fell by 0.6% from the
previous quarter. No growth
was recorded during any quar-
ter of the year; GDP fell by
0.5% over the course of the
whole of 2012. The decline was
driven by a 0.3% fall in GDP in
the last quarter in France, a
0.6% drop in Germany, a 0.9%
decline in Italy and a 0.7% fall
in Spain. In the EU as a whole,
GDP declined by 0.5% in the fi-
nal three months of 2012 com-
pared with the previous quar-
‘No currency war’
Mario Draghi,
the president
of the Euro-
pean Central
Bank, told the
economic and monetary
affairs committee on Monday
(18 February) that he was sat-
isfied with a final statement
made by finance ministers and
central bank governors of the
G20 group of leading and
emerging economies after
their talks in Moscow on 15-16
February. He said that any talk
of global currency war was
“excessive” and that the euro’s
exchange rate was “not a poli-
cy target but is important for
growth and price stability”.
See page 19
Social investment
The Commission presented its
social investment package for
growth and cohesion yester-
day (20 February), which
included calls for EU member
states to put a greater focus on
policies such as childcare,
education, training, housing
support and health.
Antitrust guidelines
The Commission has decided
that specific antitrust guide-
lines for the maritime transport
sector are no longer needed
and announced on Tuesday
that existing guidelines
would expire on 26 September
ENERGY Biofuel
Member states split
over biofuel emissions
nergy ministers meet-
ing in Brussels on Fri-
day (22 February) are
expected to clash over a Eu-
ropean Commission propos-
al to limit the extent to
which the growing of biofu-
el crops displaces food crops
or causes increased carbon
emissions through indirect
land-use change (ILUC).
Some member states, in-
cluding the Netherlands,
Denmark and the UK, want
the EU to go further than
the Commission has pro-
posed. Central and eastern
European states, with
Poland to the fore, are op-
posed to any revision that
takes ILUC into account,
while France and Germany
are backing the Commis-
sion’s proposal essentially as
In EU legislation agreed
in 2008, member states
committed themselves to
sourcing 10% of their trans-
port fuel from renewable
sources by 2020. The expec-
tation has been that mostly
this will come from biofuel.
But since the legislation was
adopted evidence has grown
that some forms of biofuel
are causing more emissions
than they abate because of
the land-use change they
trigger, such as clearing
forests to grow biofuel crops.
Other studies have conclud-
ed that the use of food crops
as biofuel is driving up food
The Commission proposed
in October to revise the legis-
lation so that biofuel derived
from food crops or causing
land-use change can count to
at most half of the 10% re-
newables quota. It also pro-
posed that the fuel-quality
directive, which requires fuel
producers to derive at least
6% of their products from re-
newable sources, be revised to
require the companies to at-
tach an ‘ILUC factor’ rating to
each of their fuels. But the
Commission stopped short of
proposing that a high ILUC
factor would mean the fuel
cannot be used to meet the
6% requirement.
Denmark, the Netherlands
and Belgium are calling for a
cap based on ILUC to be ap-
plied to both pieces of legisla-
tion, the renewables directive
and the fuel-quality directive.
The UK has also suggested
that it supports this ap-
proach, though it is expected
to clarify its postion on Fri-
day. France and Italy do not
want a cap to apply to the
fuel-quality directive, but say
the cap in the renewables
directive should be raised.
Report criticised
The biofuel industry says
there is not enough scientif-
ic evidence for introducing
ILUC factors into EU legis-
lation, a position that has
had some support from
Poland and other central
and eastern European mem-
ber states.
FEDIOL, the federation
of the vegetable oil and pro-
tein meal industry, has criti-
cised the report on which
the Commission based its
proposal as “built on false as-
sumptions”. “The lack of sci-
entific robustness does not
support the use of ILUC fac-
tors in legislation,” it said.
FEDIOL is opposed to both
the inclusion of ILUC fac-
tors for reporting purposes
and the renewables cap.
The industry says that the
Commission has not given
proper consideration to the
socio-economic impact of the
proposal, which it says could
destroy the biofuel market. It
complains that significant in-
vestment has already been
made in biofuel based on the
2008 legislation.
But environmental cam-
paign groups say that the
damage being caused by the
EU’s biofuel policy is now so
clear that the Commission
must change course. In a let-
ter sent to member states
this week, a coalition of
groups including Green-
peace, Friends of the Earth
and T&E called on ministers
to strengthen the legislation
by limiting the use of crops
that cause ILUC in both
pieces of legislation. “Most
biofuels currently marketed
in Europe offer no or limited
carbon-emission savings
compared to petrol and
diesel,” they wrote.
Yesterday (20 February),
CE Delft, a consultancy,
issued a study showing that
Dutch biofuel suppliers, who
are obliged to declare the
crop sources of biofuel, are
cleaner than the EU average.
Only the UK and the Nether-
lands have legal require-
ments for transparency that
oblige fuel blenders to report
on the sustainability of their
biofuel. The Commission’s
proposal would require all
member states to introduce
such transparency.
European commissioners at
their weekly meeting yester-
day (20 February) held a
first debate on whether to
set new targets for 2030 for
preventing climate change.
The EU’s existing targets
are a 20% reduction in
emissions, a 20% increase in
renewable energy, and 20%
increase in energy efficiency
by 2020. Investors have
complained that the existing
20-20-20 targets do not
extend for a long-enough
timescale to provide certain-
ty for investment.
A paper drafted for the
orientation debate in the col-
lege of commissioners, seen
by European Voice, suggests
that the Commission is lean-
ing toward setting new 2030
targets for emissions and re-
newables, but not for energy
efficiency. This target is cur-
rently the only one of the
three that is not binding. In-
stead, specific measures
have been made binding in
the energy-efficiency direc-
tive adopted last year. But
the measures in the directive
will get the EU to only a 17%
increase in efficiency by
The Coalition for Energy
Savings wrote to the Com-
mission last week to express
alarm that a new energy-
efficiency target is not
explicitly mentioned in the
paper. “It is evident from the
implementation of the 2020
package that the diverse bar-
riers to energy efficiency are
not tackled effectively by
greenhouse gas or renew-
able energy policies alone,” it
The briefing paper cites
non-binding milestones set
out in the EU’s low-carbon
roadmap adopted last year
of a 40% emissions reduc-
tion and a 30% renewable
energy share for 2030.
The Commission is to
publish a green paper on the
subject by the end of March,
which will be followed by
a stakeholder consultation
and impact assessment. A
communication setting out
a plan may come out by the
end of 2013, but it is expect-
ed that a proposal for 2030
targets will not be put for-
ward until after a new col-
lege of commissioners has
been appointed in 2014.
Dave Keating
ENVIRONMENT Climate change
Commission considers revised climate targets
Ministers to discuss
proposed biofuel limits
Industry says there is a
lack of scientific evidence
Dave Keating
without being renewed.
Estonian airline probe
The Commission announced
yesterday that it had opened an
in-depth investigation into
support given by the Estonian
government to Estonian Air, the
national airline. An official said
that the Commission had
doubts whether the measures
were in line with EU state-aid
Common sales law
A report drafted for the Euro-
pean Parliament’s legal affairs
committee backs plans for an
EU-wide common sales law,
which was proposed by the
Commission in October 2011.
The MEPs who drafted the re-
port, Klaus-Heiner Lehne and
Luigi Berlinguer, said that the
legislation, which would
strengthen national consumer
protection in many cases,
should be limited to distance
contracts, particularly those
carried out online. The commit-
tee will now consider amend-
Italian workers
Former employees of Antonio
Merloni, a manufacturer of do-
mestic appliances in Italy, are in
line to get financial support
from the European Globalisa-
tion Adjustment Fund after a
Commission recommendation
yesterday. More than 1,500
workers were made redundant
by the firm and the Commis-
sion said that €5 million would
be provided, pending approval
from the European Parliament
and the Council of Ministers.
Irish healthcare
A scheme in Ireland giving
state funding to health insur-
ance firms that cover a higher
than average number of older
and less healthy people does
not breach EU state-aid rules,
the Commission ruled yester-
day. Joaquín Almunia, the Euro-
pean commissioner for compe-
tition, said that the scheme
aimed “to ensure solidarity
between generations”.
Competition rules
The Commission has opened a
consultation on revised compe-
tition rules relating to agree-
ments where technology com-
panies authorise other parties
to use their patents or soft-
ware. The Commission is plan-
ning to adopt a new regime by
April 2014 with the aim of
boosting innovation.
21 February 2013
ifteen years ago,
Hashim Thaçi was a
political leader of the
Kosovo Liberation Army,
which was waging a war of
attrition against Slobodan
Miloševic´’s Serbian security
forces in the province. The
spokesman for Miloševic´’s
Socialist Party at the time
was Ivica Dacˇic´, an up-and-
coming political operator.
It would have taken a leap
of faith to imagine that the
two men would one day
shake hands as the prime
ministers of their respective
countries and sit down to dis-
cuss problems in bilateral re-
lations. But that is precisely
what they have been doing
since last autumn; their fifth
meeting took place this week
(19-20 February) in Brussels.
For the first time since the
EU-brokered talks began at
technical level two years ago,
they are now touching on
what a diplomat describes as
“the core of the problem” –
the situation in the north of
Kosovo, which is controlled
by the local Serb majority
with funding from Serbia
proper, outside the reach of
Kosovo’s majority-Albanian
There is a “real sense of
momentum”, one diplomat
says, and a commitment
from both sides to resolve
the matter. The basic pa-
rameters of a solution are
obvious: granting the Serbs
in the north an advanced de-
gree of autonomy while re-
turning the north to Kosovo
government control. But the
specifics of such an arrange-
ment are tricky.
The sense of history in the
making has been heightened
by the first meeting, in Brus-
sels on 6 February, of the two
presidents, Tomislav Nikolic´
of Serbia and Atifete Jahja-
ga of Kosovo. There are huge
obstacles to overcome on
both sides, and no move-
ment on the most funda-
mental difference between
the two sides: Kosovo’s insis-
tence that it is an independ-
ent country, recognised by a
majority of the United Na-
tions’ member states and all
but five countries in the Eu-
ropean Union, but rejected
by Serbia.
That difference is so fun-
damental that it has been ex-
cluded as a possible subject
at the talks; and while
Nikolic´ and Jahjaga did
shake hands and had their
photograph taken, they made
sure that the handshake itself
was not photographed.
Accession talks
This particular problem will
have to be resolved before
Serbia joins the EU. But the
atmosphere at the talks has
been good and a solution to
the more immediate prob-
lem of the north appears
within reach. Both Dacˇic´
and Thaçi have a powerful
incentive to strike a deal: the
prospect that the EU could,
at the June summit, offer
Serbia a date for the start of
membership negotiations
and Kosovo the start of talks
on a pre-accession treaty.
Closer links to the EU are
popular in both countries,
leading to an expectation
that both governments
might call an early election if
the European Council goes
well. (Nikolic´, from the Pro-
gressive Party, and deputy
prime minister Aleksandar
Vucˇic´, also from the Pro-
gressives, are hoping to get
rid of Dacˇic´ and his Social-
ists, the junior party in the
ruling coalition.)
Some observers question
the depth of the commit-
ment to a solution on either
side. But there can be no
doubt that the talks are
momentous. “This would
have been unthinkable a few
years ago,” said the diplomat.
“Back then we were talking
about a population exodus,
territorial partition, serious
violence, and none of that
has happened.”
And much of the credit
should go to the EU, and es-
pecially to Catherine Ash-
ton, the foreign policy chief.
In its most recent scorecard
for the EU’s foreign policy,
the European Council on
Foreign Relations, a think-
tank, gave the EU’s Kosovo
policy an A-, one of just four
A grades among the 79 areas
that the report covers.
Serbia and Kosovo
talks continue
Closer EU ties an
incentive for both sides
Toby Vogel
tax on financial
transactions in 11
European Union
member states will become
a test of how far groups of
countries are willing to
plough ahead on economic
legislation and leave others
The tax, proposed for a
limited set of countries by
the European Commission
on 14 February, does not
unite all the eurozone coun-
tries – indeed, Luxembourg
is one of its most vocal crit-
ics. Yet it does give an indi-
cation of what a future two-
track Europe might look like
as economic and monetary
union is strengthened.
The Commission has been
able to propose such legisla-
tion under the enhanced co-
operation procedure, intro-
duced under the Treaty of
Amsterdam in 1999, which
enables a minimum of nine
member states to bring in
new EU legislation. The
Commission was forced into
this aapproach after it be-
came evident last year that
not all member states would
approve its original EU-
wide proposal, put forward
in September 2011.
Enhanced co-operation
has been used twice before,
for divorce law and to estab-
lish a unitary patent system.
But this time is different: the
taxation is so closely linked
to member states’ economies
and could have an impact on
non-participating countries.
Algirdas Šemeta, the Eu-
ropean commissioner for
taxation, has deliberately
come up with a broad-brush
approach, to prevent in-
vestors simply moving out of
the 11 countries to avoid the
tax. The Commission has
proposed that both the buy-
er and the seller in any trans-
action will be taxed, as long
as one of them is based in
one of the participating
countries. Furthermore, it
has added to its 2011 pro-
posal by stating that trans-
actions of instruments
issued in one of the 11 coun-
tries will be taxed even if nei-
ther buyer nor seller is based
there. “All transactions with
an established link to the
FTT zone” is how the Com-
mission describes its ap-
proach to where the levy
should be imposed.
This has alarmed non-
participating countries and
businesses inside and out-
side the EU. A spokesman
for the UK said that the plan
would “hit growth for the
countries taking part” while
more work was needed to
examine the impact on those
outside. The US Treasury
said it was worried about
the consequences for US
Simon Lewis, chief execu-
tive of the Association for
Financial Markets in Eu-
rope, described the plan as
“regrettable” and “another
brake on economic growth”.
He said that the imposition
of “an FTT with extra-terri-
torial reach” ran counter to
the G20 objective to support
policies that lead to sustain-
able and balanced growth.
Global concerns
Even with a Commission
proposal in place for coun-
tries broadly in favour of the
tax, much remains undecid-
ed. Non-participating coun-
tries will demand evidence
that the tax will not have an
impact on growth and the
single market. The Commis-
sion will have to prove that it
can get over legal hurdles
such as the risk of double-
taxation and the challenge
of making clearing-houses
based outside of the EU co-
Even some participating
countries still worry about
the impact the tax could
have on their borrowing
costs. All those problems will
have to be overcome, even
before the thorny question of
what to do with the revenue
is answered.
What is clear is that a
financial transaction tax in
more than half of the euro-
zone will be another step
towards a different, less
homogeneous EU.
Old foes take
important steps
The divisive tax
IN SEARCH OF A BREAKTHROUGHIvica DaČiĆ, Serbia’s prime minister, Catherine Ashton, the
EU’s foreign policy chief, and Hashim Thaçi, Kosovo’s prime minister. COUNCIL
FINANCE Taxation
Eleven countries support
financial tax scheme
Businesses worried about
impact on growth
Ian Wishart
Countries taking part
Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, Spain.
Other EU countries can join at any time.
The tax rate
0.1% for transactions of shares and bonds.
0.01% for derivatives trades.
€30 billion-€35bn a year (according to the European Commission).
Where the revenue will go
Still to be decided. Member states must make that decision. The Commission says that a portion of it
should go into the central EU budget, resulting in a reduction in contributions for participating member
states. Some countries believe they should keep the money.
Next steps
The plans will now be discussed by member states. All 27 will take part in the talks and their input will be
taken into account but only the 11 countries taking part will be able to vote on the final text – and they
must all agree. The European Parliament will be consulted, but MEPs cannot alter the proposal.
BROAD-BRUSH APPROACH Algirdas Šemeta, the European
commissioner for taxation. EC
Europe’s solar industry at war
21 February 2013
Industry split by prospect
of EU action against China
Critics warn ‘new dawn’
for industry is at risk
Andrew Gardner
hen Angela
Merkel, Ger-
many’s chancellor,
arrived in Beijing on 30 Au-
gust last year, rumours were
swirling that the European
Commission was about to
launch an investigation into
China’s solar-panel industry.
Merkel took up the issue
publicly, saying that it would
be best to avoid a trade war.
For a moment, the concerns
of the Chinese – and in Eu-
rope’s solar industry – were
allayed. But the Commission
pushed on regardless, an-
nouncing an investigation
on 6 September.
The Commission says it is
legally obliged to open an
investigation if – as in this
case – an industry provides
evidence that products are
being dumped. Critics of the
complaint, which was
lodged by ProSun, the al-
liance of 44 or so compa-
nies, suggest it could have
questioned the submission
more rigorously. But, either
way, the European Commis-
sion is now at the centre of a
trade case that is massive in
financial terms – China sold
€21 billion of solar panels
and components to the EU
in 2011 – and vitally impor-
tant in policy terms, since
both for the EU and for Chi-
na clean energy is a priority.
History might suggest that
ProSun starts with an advan-
tage: last May, the United
States slapped tariffs on Chi-
nese solar panels (in the case
of some companies, the du-
ties were 200%). But oppo-
nents of the complaint – in-
cluding the 60 European
companies from across the
industry that attended a
Commission hearing on
Monday (18 February) – are
pinning their case on a clause
not in US trade policy: EU
trade regulations recognise
that ‘the Community interest’
– the EU’s greater good – is
an argument for not impos-
ing penalties, even if some-
one’ interest were damaged.
Just how much damage
Chinese manufacturers might
have caused – or could now
cause – to the European in-
dustry is a point of contention.
ProSun argues that Eu-
rope could lose hundreds of
thousands of jobs if no ac-
tion is taken. “The numbers
in that study are bullshit,” is,
however, the assessment of
Thorsten Preugschas of
Soventix, a German builder
and operator of solar plants.
Instead, Preugschas
points to a study presented
to the Commission on Mon-
day by the Swiss research
company Prognos. Duties
would reduce demand, with
knock-on effects down to lo-
cal installers, the most
labour-heavy part of the in-
dustry. Depending on
whether duties on solar
modules were 20% or 60%,
Prognos believes that
145,000 to 269,800 jobs
could be lost over three
years and the European
economy would lose an ag-
gregate of €18.4bn-€33.8bn
in valued added. Some parts
of the industry might gain –
but only enough to add
15,000-58,000 jobs. Duties
of 60% (about the level that
ProSun is asking for) would
halve the market.
The impact would be
compounded if China were
to retaliate. There is wide-
spread expectation that
such retaliation would be
rapid, reinforced by China’s
decision in November to file
a case with the World Trade
Organization accusing some
EU states of favouring EU
producers of solar-energy
equipment. However, Ger-
many’s Wacker Chemie, a
producer of polysilicone, a
high-quality energy conduc-
tor, is more concerned about
the impact on the market.
“Duties would result in
long-term economic losses
for the EU economy that
would be much greater than
any short-term benefit for
the small number of EU
wafer, cell and module pro-
ducers,” its chief executive,
Rudolf Staudigl, says.
For opponents of duties,
to shrink a strategic market
and risk a trade war is a high
price to pay for an investiga-
tion based on a questionable
price calculation: in assess-
ing whether prices are at
‘dumping’ levels, the Com-
mission uses the US as an
‘analogue’, or point of refer-
ence – a mistake, some ar-
gue, because the US market
is small.
There is another ‘commu-
nity interest’ that they be-
lieve is at risk. After years of
subsidies, the solar-energy
industry is now competitive
with other energy indus-
tries. “Grid parity is almost
here and we are looking at
pulling back from that gold-
en moment,” says Jodie
Roussel of Trinar Solar, a
multinational with Chinese
origins. It would be per-
verse, she and others argue,
for the EU to make it hard-
er to reach its goal of gener-
ating 20% of its energy from
renewable sources by 2020.
Europe’s solar industry at war
The Commission is also
considering whether China
is subsidising its solar-pan-
el producers unfairly. The
two aspects of the investiga-
tion may be separate, but in
assessments both the
dumping and subsidy as-
pects are partly shaped by
the history of how the Euro-
pean and Chinese solar in-
dustries emerged and the
role played by subsidies.
In Europe, countries eager
to nurture a nascent clean-
energy industry subsidised
solar-panel producers heav-
ily – mainly through ‘feed-in
tariffs’ that guaranteed
prices for solar power. In
China, a centrally dictated
demand for cleaner energy
triggered a wave of invest-
ment, often involving mem-
bers of local political elites.
Both in China and the EU,
the solar-energy markets
and industries have matured
dramatically. As well as
making solar energy com-
petitive with other sources,
price drops are squeezing
margins in Europe, taking
some firms to the wall. To
cope with competition, price
volatility and policy uncer-
tainty, those parts of the Eu-
ropean industry exposed to
international competition
are internationalising their
businesses. In China, the
market is also consolidating
and a “wild East” of small,
cheap producers is being
tamed. One side-effect is
that, to recoup some of their
investment, some producers
have been selling off stock at
low prices, members of the
European industry acknowl-
But Soventix’s Thorsten
Preugschas suggests it
would be “unfair” to ignore
the role that the EU’s own
subsidies played in China.
“We [the EU] created this
market” and “we screamed
for [China] to get volumes
in place”. If China has in-
vested more heavily – and
created economies of scale –
to ensure that its producers’
costs are low, they should
not be blamed.
From this perspective, in
imposing duties, the Com-
mission would be fighting a
battle that has already been
lost, and in the process
would jeopardise victories
that European companies
could still win, in higher-val-
ue parts of the industry.
Many in the industry now
describe their business as a
‘financial product’.
That is a view of subsidies
shaped by the industry’s his-
tory. But what if China is now
using subsidies in a different
way, not to nurture a domes-
tic industry that is important
for climate-policy reasons,
but, rather, for use as an of-
fensive weapon to conquer
foreign markets?
Paulette Vander Schueren,
a lawyer with Mayer Brown,
says that the scope of the
Commission’s investigation
into subsidies is broad enough
to include trade credits.
If the Commission decides
that trade credits and other
easy money are part of a
strategic industrial policy, the
debate about the two cases
could be re-framed as a bat-
tle over what is in the EU’s
greater interest – to leave the
solar industry alone, or to use
these cases to halt aggressive
policies by China.
The Commission has un-
til the end of this year to de-
cide whether China is
dumping solar panels and
offering subsidies. Oppo-
nents of duties are suggest-
ing at least three options.
Soventix’s Preugschas ar-
gues that the market should
be left to do its work. Wack-
er Chemie believes that the
EU should ask the World
Trade Organization (WTO)
to organise a formal dia-
logue with China on devel-
oping the global renewable-
energy market. SEMI, a
global association for the mi-
cro- and nano-electronics
industries, thinks that the
solar industry, rather than
governments, should push
for a global solution.
But it could be that the
case will become part of a
broader debate about how to
bring China to the negotiat-
ing table on bigger-picture
trade issues. The EU has
long wanted to persuade
China to submit its trade
credits to the disciplines of
the Organisation for Eco-
nomic Co-operation and De-
The possibility that the
WTO could in December
2016 recognise China as a
market economy – making it
harder to bring anti-dump-
ing measures – could add ur-
gency to trade strategists’
The stakes are high.
Soventix’s Preugschas sug-
gests they are extremely
high: “Will there be a dawn
of a solar century or a severe
consolidation of the mar-
ket?” What is certain is that
until the end of the year,
when the Commission will
announce its decisions in
both the dumping and sub-
sidy cases, a fast-changing
and volatile industry will be
unsettled by two big ques-
tions: What might the EU
want to achieve with this
case? And how significant
will the EU’s market be in
the next few years?
any in Europe take a grim view of Ukraine. Their
view is unlikely to be improved by reading the
assessments of Ukraine’s problems by the
country’s own prime minister, Mykola Azarov
(see page 12). In fact, Azarov is too harsh. His
depiction of ordinary Ukrainians verges on insulting, and the
EU’s decision last March to initial an association agreement shows
that Ukraine has made a good deal of progress, at least at an
administrative level.
Still, the Ukrainian government is right in the case that it
frequently makes – that easing, or removing, travel restrictions on
individual Ukrainians would help advance public attitudes on
many issues. Ukraine has begun introducing biometric passports
and as soon as it meets other technical conditions, the EU’s
member states should hurry to relax entry for Ukrainians.
One benefit of that would be to remove an issue that obscures
from the Ukrainian public what is really at stake in the EU’s talks
with Ukraine. The fundamental uncertainty now is about how
committed Ukraine’s leaders are to political reform.
Viktor Yanukovych, the country’s president, will be in Brussels
for a summit on Monday (25 February), carrying an action plan of
legislative measures for the year, with promises of reforms
intended to convince EU member states that they should ratify the
association agreement. He will want to take back to Kiev some
pledges from the EU that it will contribute to a package of
international financial support for the Ukrainian economy. But
more importantly, he needs Herman Van Rompuy and José
Manuel Barroso, the presidents of the European Council and the
European Commission respectively, to tell the leaders of the EU’s
member states, on whom ratification of the association agreement
depends, that they believe Yanukovych is willing to take the
political risks of carrying out genuine reform.
The trickiest – and most personal – assessment is about
Yanukovych’s approach to the future of Yulia Tymoshenko, the
jailed leader of the opposition. He is in a Catch-22. A court sent
Tymoshenko to prison and it will be courts – Ukrainian and
European – that will have to determine what happens to her, a
point that Tymoshenko does not always seem to appreciate. EU
officials do recognise that, and are careful to depersonalise the
issue of ‘selective justice’. But if this knot can only be untied by the
courts, how can Yanukovych convince the EU’s member states to
sign the association agreement, when the Commission has already
determined that the jailing of Tymoshenko was a case of selective
Yanukovych’s only viable option is to reform aggressively at home
along the lines demanded by the Commission, reinforcing this by
showing what Ukraine is capable of internationally, especially in
pushing for progress in the frozen conflict in Transdniester.
His temptation will be to point up the Catch-22, to quibble
about the EU’s approach, to defer reforms, and to hope that the
Tymoshenko case will be resolved only after presidential elections
in 2015. But the EU’s best offer for some time – the signing of the
association agreement – is on the table for this year, not 2015.
Yanukovych cannot expect the EU’s member states to take
gambles on Ukraine, if he himself is not prepared to take gambles
on reform that he says are in Ukraine’s own interests.
International Press Centre, Résidence Palace,
Rue de la Loi 155, Box 6, 1040 Brussels, Belgium
Ukraine must show
the EU it is serious
about reform
21 February 2013
WTO subsidies paper
favours US, warns Fischler
Harbison, chairman of the
WTO’s talks on farm trade, come
into effect.
Harbison’s paper does not
adequately tackle the “de
minimis clause”, according to
Fischler. Under this, farm
subsidies paid by developed
countries that amount to less
than 5% of the value of
production do not have to be
reduced. The Union wants to
abolish the clause, claiming it
allows the US to spend some €7.5
billion on farm subsidies per year
– not a level playing-field, says
the European Commission.
Fischler also says the paper
does not properly address export
credits by other developed parts
of the world and the use of food
aid to deal with surplus
production, contending these
both have a negative effect on
world trade: “Everything is being
required of us and nothing is
being required of anyone else. It
offers huge market access to
others to European markets and
very little access for Europeans to
others’ markets.”
Franz Fischler has branded a key
World Trade Organization
(WTO) paper on farm subsidies
“unbalanced”, arguing that it
favours the US over the EU.
The agriculture commissioner
is angry that loopholes –
enabling the US to continue with
perceived trade-distorting
measures – would continue if
recommendations by Stuart
TEN YEARS AGOBrussels, 20 February 2003
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polices of its own, but these do not
aspire to crack the dominance of
national champions, but to force them
to perform better, by selectively
exposing them to competition.
The first stage in China’s credit
cascade was to help firms expand at
home. The second, current phase is to
help them export excess production. In
2011, Chinese trade credits amounted
to $71bn (€53bn).
It is imperative that economic
relations with China are rebalanced.
There are hopeful signs. Chinese
investment in Europe is rising, and
European investment in China
produced returns of $19bn (€14.1bn) in
the year to September 2012. This,
though, still does not compensate for
an annual trade deficit that fluctuates
around $155bn (€115bn).
Some member states believe that
China is willing to re-think its export
credits and adopt international
The European Commission
must rebalance the EU’s
economic relations with
China, writes Jonathan
guidelines. There might be reason for
optimism. China’s talks with the US
seemed fruitful: trade credits shrank
last year. But credit to customers is just
shifting to another category: external
loans. In the past nine months, China
granted a record of $62bn (€46bn) of
these loans.
Trade disputes are usually a symptom
of internal economic distortions. This is
the case for both China and Europe.
What both sides really need is
co-ordinated re-balancing. Beijing
needs to address its over production,
Europe its over-consumption. But the
onus is on China to demonstrate that it
wants a durable economic partnership.
Many in Beijing understand that it is
in China’s interest to adjust economic
relations, but powerful lobbies halt
progress. A significant part of the
Communist Party believes that national
industries need to play an even greater
role in times of uncertainty. If it were up
to them, new credit castles would soon
emerge in sectors such as clean tech,
semiconductors, cars, pharmaceuticals
and planes.
The Commission’s anti-dumping
case is not an attempt to restore
protectionism. It is an attempt to undo
unfair trade practices. Huawei and
ZTE are welcome to provide evidence
that they are not pursuing unfair
competition. The case is also a
statement of concern about Beijing’s
credit policy, which is truly of a scale
that exists nowhere else in the world.
Member states should throw their
weight behind the Commission.
Narrow-minded protectionism is not an
option. But there is no sense in seeing
some of our key industries demolished
just to roll out the red carpet for China’s
new champions afterwards.
he gloves are off. Chinese
officials are crying fool
about what they consider to
be the reckless behaviour of
Karel De Gucht, the
European commissioner for trade.
After hitting out at the Chinese solar
industry, the commissioner is now
pointing at China’s telecoms sector.
The European Commission does not
need the consent of EU member states,
but political backing remains key – and
member states remain reticent to
support De Gucht. If De Gucht decides
to investigate the practices of telecom
giants like ZTE and Huawei, national
capitals should swing behind him: they
need to halt what increasingly looks
like a financial battle of attrition for
The case against Chinese makers of
mobile network equipment is a solid
one. Beijing may no longer offer much
in the way of official subsidies, but it
does instruct its policy banks to
provide loans on soft terms. The scale
is enormous: Huawei’s and ZTE’s
combined credit facilities exceed
$50bn (€37bn), compared with a joint
profit of only $2.3bn (€1.7bn) in 2012.
They also receive millions in research
funding each year from national and
local governments.
Credit is now the main tool that
China is using to win the global battle
– and some Chinese officials do
perceive the world economy as one big
battlefield. Premier Zhu Rongji may
have piloted China into the World
Trade Organization, but he did so not
to transform it into a free market, but
to use the free market selectively to
build stronger national companies. The
role of these national champions is to
ensure that more profits stay in China
and that Chinese growth does not rely
too much on footloose multinationals.
China has recently adopted anti-trust
Pier Luigi Bersani: Europe’s hope?
area of Italy.
The PD leader likes to project an
earthy, let’s-roll-up-our-sleeves-and-
get-down-to-work air tinged with
affability. He is the second Emilian in
recent years to be chosen to lead the
centre-left (the other was Romano
Prodi, president of the European
Commission from 1999 to 2004 and
Italy’s prime minister from 1996 to
1998 and from 2006 to 2008). That is
more than just coincidence.
The centre-left has never been able to
win power in Italy without the support
of an exceptionally broad coalition and
Emilia is a part of the country in
which, historically, liberal Catholics
and moderate Communists were often
able to find common ground. Prodi, a
progressive Christian Democrat,
exemplified that tolerant tradition. So
– in a different way – does Bersani, an
ex-Communist. As a boy, he organised
a strike by altar servers. He later wrote
his degree thesis on the philosophy of
Pope Gregory I.
As minister for economic
development in Prodi’s second
administration, Bersani vigorously
pursued a programme of liberalisation
that might have been undertaken by a
government of the centre-right
(though the vested interests it targeted
were in many cases those of middle-
class professionals, such as
pharmacists, or self-employed workers
such as taxi drivers who are not
natural left-wing voters).
Assuming the PD’s alliance with the
more radical Left, Ecology and
Freedom party (SEL) emerges
victorious from the election, the tenor
of its policies in government will
depend on the mathematics of its
victory. A PD official who knows
Bersani’s thinking said that, even if he
does not need their votes for a
parliamentary majority, he plans to
invite Monti and his supporters to join
a coalition government to give it
greater legitimacy. But, clearly, Monti’s
influence will be greater if his support
is vital – and he may not wish to join a
coalition if it is not.
Bersani is not a thorough-going
Brussels insider like Monti, who served
two terms on the Commission. But nor
is he a complete outsider. He has
attended ministerial council meetings
during his three stints in cabinet (the
others were as minister of industry,
1996-99, and of transport, 1999-2001).
Between 2004 and 2006, he was an
He is understood to favour more far-
reaching proposals on banking union,
including a resolution mechanism, and
be open to the idea of a super-
commissioner who could check
national budgets. At European
Councils, Bersani can be expected to
argue for a more growth-oriented
policy. But “we would like to combine
the Hollande and Schäuble views”, said
a source close to him. “After a very
severe fiscal adjustment, [Italy’s] debt
is still going up and we are worried
that if more space is not given to the
real economy, it will be more difficult
to effect structural reforms.”
f the opinion polls are right,
European Union politicians and
officials will be dealing with a
very different Italian prime
minister after Italy’s general
election on 24-25 February.
Pier Luigi Bersani, whose Democratic
Party (PD) was leading the field when
a ban on the publication of opinion
polls came into force two weeks before
the election, is a stubborn working-
class career politician, quite unlike the
courtly, cosmopolitan Mario Monti
who has governed Italy at the head of a
non-party cabinet since November
2011. The two men nevertheless have
at least two things in common:
Catholicism and a strong belief in the
European Union.
Bersani, said a journalist who has
shadowed him, is “un duro” (a tough
guy or hard man). He was born 61
years ago, the son of a petrol-pump
attendant and mechanic in the Emilia
Jonathan Holslag is a research fellow of the
Brussels Institute of Contemporary China Studies.
John Hooper is Italy correspondent of The
Economist and southern Europe editor of
The Guardian.
The Italian left’s candidate to succeed Mario Monti as
prime minister shares Monti’s belief in a strong
European Union, writes John Hooper
Confronting China’s champions
21 February 2013
rom the first moment of his
premiership in March 2010,
Mykola Azarov made clear
how bleakly he saw Ukraine’s
predicament. “Even the
prime minister’s official automobile
doesn’t work,” Azarov said, seated in
front of ministers and a group of
reporters at his cabinet’s first meeting.
“A small example, but how can there be
any order in Ukraine if the prime
minister’s automobile doesn’t work?”
The rhetoric may have been awkward –
ordinary Ukrainians may not much care
for the ruling elite’s limousines – and his
language, Ukrainian, may have been
faulty, but the message was clear: even a
banana republic can take better care of
its leader’s Mercedes than Ukraine.
Factoring in Ukraine’s size, the ethnic-
Russian Nikolai Azarov – or Mykola in
the Ukrainian version of his name –
probably has a tougher task than any
European prime minister. Ukraine is
arguably the worst country in Europe for
businessmen, its population has fallen by
15% in two decades, and it suffers from a
schism between its Ukrainian-speaking
west and Russian-speaking east so
calcified that some believe it is doomed
to remain in a split-state purgatory à la
Perhaps an olive branch to the
opposition would ease those problems,
but Azarov is no conciliator. Three years
after taking up his post, he continues to
rail against his predecessors, particularly
Yulia Tymoshenko’s crimes and
incompetence, as if to say: “See what a
mess she left me? She even sabotaged the
office car!”
Three years on, the party he leads – the
Party of Regions – returned to power in
October. But his government’s challenges
remain daunting, most notably
corruption, bureaucracy, and the
judiciary – all are so rotten that Ukraine
ranked 137th last year in a World Bank
ranking of countries for ease of doing
Azarov’s path to power, and Ukraine,
was circuitous. Born out of wedlock just
after the war in Kaluga, a town 150
kilometres south-west of Moscow, Azarov
was given his mother’s maiden name –
Kvasnik – rather than that of his half-
Estonian, half-Russian father. When he
married, he took on his wife’s surname –
Azarov – and it was with his wife,
Lyudmila, who is of Ukrainian descent,
that he first travelled to Ukraine in the
early 1970s. It was only in 1984, at the
age of 36, that Azarov moved to Ukraine,
taking up a post at a geological research
Azarov dreams of
seeing Ukraine join the
European family but
understands that this will
not happen soon. “The
technical backwardness
can be overcome rather
quickly,” Azarov said, “but
the transformation of
mentality, traditions,
customs….it’s a very
lengthy process.”
1947: Born, Kaluga, Soviet Union
1971: Graduated in geology from Moscow
State University
1971-84: Managerial positions in coal industry
1984-95: Ukraine State Research Institute for
1986: Doctorate in geology
1994-98: Member of parliament
2002: Head of State Tax Inspectorate
2001: Leader of the Party of Regions
2002-05: First deputy prime minister, finance
minister (under President Leonid
2006-07: First deputy prime minister, finance
minister (under President Viktor
2007-10: Member of parliament
2010-: Prime minister
step-by-step approach those standards
that we see in Europe.”
It is all very noble-sounding from a
man who professes a fondness for books
and paintings, but Azarov cannot
escape blame for the slowness of the
transformation of Ukraine’s mentality
or politics. He has been one of Ukraine’s
leading politicians for nearly two
decades and, for example, was from
1996 to 2002 head of the tax
inspectorate, a body criticised for
arbitrary and politicised harassment.
Nor is Azarov helping himself now. His
son, for instance, won a parliamentary
seat in October for the Party of Regions.
Perhaps 41-year-old Aleksei was the
best qualified individual in that district,
and perhaps he won fairly, but the
perception of nepotism lingers
Azarov’s difficulty in managing
perceptions applies, more importantly,
to the case of Tymoshenko. She may
very well be guilty of having abused her
power as prime minister in 2007-10,
but the methods used against her, and
several of her ministers, created the
perception of a witch-hunt mandated by
Yanukovych and Azarov. If the country’s
two most powerful men cannot
guarantee “European standards” in this
high-profile case, as well as
Tymoshenko’s subsequent
imprisonment, what hope can there be
for all cases not under the international
Perhaps Ukraine’s leaders fail to
understand or choose to ignore the
extremely important subtleties of good
governance raised by these cases, and by
the European Commission. That failure
of understanding or will is why the
weathervane of Ukraine’s destiny
currently appears to point eastward, for,
if Brussels cares about human rights,
fair elections, and the rule of law,
Moscow has no such concerns. Azarov
may complain now about how much
Ukraine pays for Russia’s gas, but he
may conclude that it is easier to pay
Moscow a premium rather than to
swallow the EU’s medicine.
Both Ukraine and the European
Union say they want to sign an
association agreement by this
November. That gives Azarov, who is in
the twilight of his career, just months to
decide whether he wants history to
portray him as a true reformer, or as the
vassal of a president who turned his
back on Europe and embraced the
opaque world of ‘Eastern standards’.
Gary Peach
centre in Donetsk, one of the Soviet
Union’s coal-rich regions.
The Gorbachev era began soon after
and, seeing Moscow as incapable of
managing the economy and wanting
desperately to sustain the industry to
which he had dedicated two decades,
Azarov entered public life. When
Ukraine gained independence, a period
marked by catastrophic economic
decline (output contracted some 70%),
Azarov, by now a professor of geology
specialising in gold-bearing veins,
plunged into politics. In the years after
1994, when he became a member of
parliament, Azarov acquired a range of
experience – of taxes, budget policy,
national security – that moulded him
into the statistics-loving technocrat he is
today. Along the way, he entered the
inner circle of the then president Leonid
Kuchma and another Donetsk native,
Viktor Yanukovych.
When Yanukovych became prime
minister in 2002, he brought Azarov
along as finance minister. Two years
later the Orange Revolution – which
Azarov damns as a huge step backwards
in economic development – pulled the
rug of power from beneath their feet,
but the pendulum of Ukrainian politics
returned both men back to power in
2006, then once again to the
opposition, and then – in early 2010 –
to the country’s two highest posts after
Yanukovych won the presidency in a
campaign managed by Azarov.
Azarov, in short, is beholden to
Yanukovych, and has limited room to
shape government policy. But
Yanukovych also relies on Azarov for the
nitty-gritty of statecraft. Nor should
Azarov’s role in shaping Yanukovych’s
thinking be underestimated as the
president considers the major
crossroads at which Ukraine stands – a
choice between a Russia-led customs
club or a trade agreement with the EU.
Judged by his statements, Azarov
dreams of seeing Ukraine join the
European family, but understands that
this will not happen soon. “The
technical backwardness can be
overcome rather quickly,” Azarov, who
often points to the South Korean and
Singaporean economic miracles, said
last year, “but the transformation of
mentality, traditions, customs….it’s a
very lengthy process. Society resists.
Society wants to remain the way it is.
Changing anything is very difficult.” He
then defined his government’s mission
unambiguously: “Ukraine’s task is to
modernise its society, economy, and
21 February 2013
21 February 2013
control of the main media and cynical
use of xenophobic propaganda for
domestic political ends.
Last week, Štefan Füle, the European
commissioner for enlargement,
cancelled a visit to Skopje in protest at
the “current political impasse” and said
the start of accession talks was “at risk”.
Actually, the accession talks are
nowhere near starting because of
another bit of reckless behaviour.
Greece is blocking Macedonia’s EU (and
NATO) membership because of a
dispute over the country’s name.
“Macedonia” (in Greek eyes) is a historic
appellation that belongs to the Hellenic
Republic’s northern provinces and their
people. Its use by the northern
neighbour therefore is provocative and
insulting – and tantamount to a
territorial claim. For now, Greece refers
to its northern neighbour as the Former
Yugoslav Republic of Macedonia, or
FYROM for short.
The European Commission has on
multiple occasions recommended that
membership talks start. And on each
occasion Greece has blocked this in the
Council of Ministers. It wants
Macedonia to accept a different name
(such as Republic of Skopje). Greece
promised in 1995 that it would not use
the name dispute to block its
neighbour’s applications to
international organisations. In 2011, it
lost a case at the International Court of
Justice, which ruled that it had done
just that.
Now Bulgaria is blocking Macedonia
too, with a seemingly manufactured
row about ‘anti-Bulgarian’ propaganda
issued by the authorities in Skopje.
But, as with the Greek objections, the
bigger picture gets lost in these
squabbles. Isolating Macedonia solves
These disputes involve heated
disagreements about ancient history,
plus plentiful modern-day intrigues
and dirty dealing by all sides. The
details may be obscure, but the results
are not. The impasse is unstable.
Macedonia is going backwards,
endangering not only its chances for
integration, but its internal stability,
and the security of the region. It is high
time to arm-twist Greece and Bulgaria
into showing sense, to get accession
talks going, and to focus on Europe’s
more serious problems.
urope has plenty of truly
difficult problems to solve.
That makes it all the more
unforgivable when it leaves
the easier ones to fester. A
prime example of this is the status of
Macedonia: a small ex-Yugoslav
country with a population of two
million, which wants to join the
European Union and NATO.
Macedonia is potentially explosive:
the British journalist Neal Ascherson
once termed it the “doomsday machine”
of the Balkans. It narrowly escaped civil
war in 2001 (the precarious ethnic
balance is between a majority Slav
population and a minority Albanian
one). The Albanians have little affection
for the Macedonian state, but tolerate it
as a vehicle for getting into the EU.
That is a reasonable bet, but not a
permanent one. On the face of it,
Macedonia has a better chance of
speedy membership than Albania (too
poor) and Kosovo (too contested). But
that could change. In a region in which
millions of people had their lives ruined
(and in many cases ended) by war in
recent years, nobody should be
complacent or careless.
But politicians inside and outside
Macedonia are attacking this
unexploded bomb with hammers. One
problem is internal. The opposition
Social Democrats have been boycotting
parliament since a brawl there on 24
December, when they were
manhandled by security guards. They
are threatening to boycott the local
elections on 24 March. Their
dissatisfaction has deeper roots
though. Nikola Gruevski, Macedonia’s
prime minister, is adopting an
approach that some outsiders find
reminiscent of Vladimir Putin in
Russia: close overlap between the
ruling party and the state; close
overlap between politics and business;
unscrupulous use of the security
services against the opposition; tight
Edward Lucas edits the international section of
The Economist.
Macedonia’s problems are
festering, in part because
the EU is failing to take a
tougher line with Greece
and Bulgaria, Edward
Lucas writes
Tsiplyat po oseni schitayut (Russian)
One should count chicks in autumn
Ne govori gop, poka ne pereskochish
(pereprygnesh) (Russian) Don’t say hop
until you jumped over
En nylje karhua, ennen kuin se on
kaadettu (Finnish) I don’t skin a bear
before it’s been felled
Non dire gatto se non l’hai nel sacco
(Italian) Never say ‘cat’ before you have
it in your sack
Dereyi görmeden paçaları sıvama
(Turkish) Do not roll up your trouser-
legs before you see the stream
It’s raining cats and dogs
Padají trakar ˇe (Czech) It’s raining
Det regner skomagerdrenge (Danish)
It’s raining shoemakers’ apprentices
Het regent pijpenstelen (Dutch) It’s
raining pipestems
Brékhei kareklopódara (Greek) It’s
raining chair legs
Don’t cry over spilt milk
Paid â chodi pais ar ôl piso (Welsh)
Don’t lift a petticoat after peeing
Kusat sebe lokti (Russian) To bite one’s
Eso˝ után köpönyeg (Hungarian) A coat
after rain
Don’t count your chickens before
they’re hatched
Man skal ikke sælge skindet, før
bjørnen er skudt (Danish) One should
not sell the fur before the bear has been
Älä nuolaise ennen kuin pöydällä
tipahtaa (Finnish) Don’t start licking it
up before it drops on to the table
Na neroden Petko kapa mu skroile
(Macedonian) They sewed a hat for
unborn Peter
WORDS Il pleut comme vache qui pisse
(French) It’s raining like a pissing cow
Es regnet Schusterbuben (German)
It is raining young cobblers
Están lloviendo hasta maridos
(Spanish) It’s even raining husbands
False friends
Those who learn other languages than
their own will sometimes come across
words they recognise from their
mother tongue, but they often have a
very different meaning. Linguistic
experts call these words ‘false cognates’
or faux amis (literally ‘false friends’).
Aloud (Dutch) Ancient
Angel (Dutch) Sting, barb
Anger (German) Meadow
Arm(Dutch) Poor
Bad (Dutch) Bath
Baker (Dutch) Nurse
Bald (German) Soon
Bang (German and Dutch) Frightened,
Batman (Turkish) Thrust
Belt (Maltese) City
Big (Dutch) Piglet
Bizarre (Spanish) Brave
Black (Swedish) Ink
Bladder (Dutch) Blister
Blank (German) Shiny
Blubber (Dutch) Mud
Bog (Irish) Soft, easy
Bra (Swedish) Good
Brief (German) Letter
Brisk (Albanian) Razor blade
Chain (Yiddish) Charm
Chariot (French) Trolley
City (Czech) Feelings
Cup (Bosnian) Jar
Cute (Italian) Skin
Dark (Albanian) Evening meal
Dig (Gaelic) Ditch
The Macedonian doomsday machine
THE OPEN-ENDED CANDIDACY Štefan Füle (left), the European commissioner for enlargement, pictured with Nikola Gruevski, Macedonia’s
prime minister, in Skopje in somewhat more optimistic times last September. REUTERS
Adam Jacot de Boinod is the author of “The mean-
ing of tingo and other extraordinary words from
around the world”, published by Penguin Books, and
the creator of the iPhone app Tingo.
You can respond, with comments, addi-
tions and, where necessary, corrections,
through our website,
www.europeanvoice.com, where our words
column will regularly be found.
21 February 2013 COMMENT
Stewart Fleming is a freelance journalist based
in London.
able to Russia or other murky origins”. Un-
der discussion is a bail-out worth around
€17bn, equivalent to 100% of Cyprus’s
gross domestic product (GDP).
Kirkegaard argues that Cyprus should
“copy the Irish example and enact a new
bank-liquidation framework, for its crisis-
stricken banks”. But, unlike in Ireland, the
new law should, he says, specify that some
depositors, those with “murky” origins,
could be hit by losses as part of a rescue.
This, he suggests, might put pressure on
the Russian government to participate in
a rescue.
Others, however, question whether such
a selective “bail-in” of “murky” depositors
is a good idea. Who decides whose deposits
are murky, they wonder? What negative
impact would such a targeted bail-in of
certain depositors have on financial-sector
confidence? On what terms does the euro-
zone want the Russian government’s
Instead, as an interesting precedent for
dealing with troubled banks, they point to
the Dutch government’s decision on 1 Feb-
ruary to nationalise the country’s fourth-
largest bank, SNS Reaal.
According to Jeroen Dijsselbloem, the
Dutch finance minister, who now chairs
meetings of the Eurogroup, this was done
because SNS posed “a serious and immedi-
ate threat” to the stability of the financial sys-
tem. Remember, the eurozone’s financial
system is none too robust at the moment.
Significantly, under a law passed last
year, the terms of the nationalisation
wiped out the value of investors’ holdings
of the bank’s subordinated debt, while re-
specting depositors’ rights. This is a bail-
in with a vengeance and comes a couple of
years ahead of the expected implementa-
tion of a European level bail-in rule. Some
of the bond investors have said that they
will challenge the expropriation legally. A
There have been calls for Cyprus to copy the Irish
model of dealing with a financial crisis. But the
problems facing the two countries are very different,
writes Stewart Fleming
similar bail-in of subordinated bank bonds
is reportedly under discussion in the case
of Cyprus.
Monetary financing?
As for the Irish promissory note deal, there
are doubts as to just how much of a prece-
dent is being set. The ECB has been de-
cidedly lukewarm about the transaction.
Mario Draghi, the president of the ECB,
carefully refused, at his monthly press con-
ference on 7 February, to give the executive
board’s approval. “There isn’t any decision
[to back the Irish debt swap] today,” he
said, adding: “We simply took note.”
That the transaction, according to some
assessments, comes uncomfortably close
to banned “monetary financing” of a euro-
zone government by the ECB may help to
explain the apparent discomfort.
“It is not obvious to us why this deal,
structured the way it is, is not monetary
financing,” wrote Mark Wall, a Deutsche
Bank economist. “Other countries might
try to follow,” he says, summoning up what
must surely be a nightmare scenario for
the ECB.
But there are good reasons for acquiesc-
ing in bending the rules for Ireland, if that
is what has happened. Here is a country
that has been working hard to implement
economic reform and has begun to reap
the benefits. “There is evidence that the
restoration of competitiveness is progress-
ing well in Ireland,” says Gillian Edge-
worth, a senior economist at Unicredit, an
Italian bank.
The IMF, in its most recent report on its
support programme for Ireland, says that
the budget remains on track to hit 2012
targets and that financial-sector and struc-
tural reforms are continuing to advance.
Although growth is reviving, forecasts
suggest it will hit only 1.1% this year, with
unemployment still painfully high
(14.75%), and government debt expected
to peak at 120% of GDP this year. A recent
IMF working paper concludes that Ireland
“can regain sustainable growth…provided
it maintains competitiveness, but a pick-
up in external demand is critical”.
The way in which Ireland’s people, like
the citizens of the Baltic states, are facing
up to austerity helps to justify German
Chancellor Angela Merkel’s decision last
October to single Ireland out as a special
case. The promissory-notes transaction is
a move that gives political support to a
reforming government.
Cyprus, on the other hand, is altogether
different: another troublesome Mediter-
ranean EU and eurozone member state
whose parlous condition serves as a re-
minder of the inadequacy of both the EU’s
narrow convergence criteria and the terms
for joining the single currency.
In London last week, Jacek Rostowski,
Poland’s finance minister, made it clear
that a country that was once gung-ho to
join the euro now recognises that just
meeting the membership criteria is not
enough. “It’s not a matter of setting dates.
It’s a matter of setting out what we have to
do and what the eurozonehas to do in or-
der for us to join the eurozone safely. After
the crisis, countries have to be much bet-
ter prepared before they join.”
here has been good news for
Ireland this month with the
announcement of a restruc-
turing of the debt burden
associated with the country’s
banking crisis.
For Enda Kenny, Ireland’s prime minis-
ter, the deal announced on 7 February,
having in effect been agreed with the Eu-
ropean Central Bank (ECB), was “an his-
toric step on the road to recovery” since it
reduced the burden of the bank bail-out on
taxpayers. The deal will see short-term
lending transformed into longer-term
bonds that will significantly reduce the re-
payment pressure on the country.
But just how good is this news? What
are the wider implications of the replace-
ment of €31 billion of expensive medium-
term promissory notes costing 7%-8% by
long-term government bonds costing
nearer 3%?
Jacob Kirkegaard, a senior fellow of the
Peterson Institute for International Eco-
nomics, a think-tank in Washington, DC,
puts it in a wider context. “The agreement
illustrates the political flexibility of the
euro area in designing financial support
[for a member state],” he says.
So, it demonstrates “that euro-area gov-
ernments and institutions have more flex-
ibility –and more options –to secure their
financial and political goals than previ-
ously thought...hence the common cur-
rency is more robust than often assumed”.
Kirkegaard suggests that this new-
found flexibility could be brought to bear
in Cyprus, which is teetering on the brink
of financial disaster and heading for a bail-
out from the International Monetary Fund
(IMF), the European Union and the ECB,
in large part because of its bloated bank-
ing system’s involvement in the Greek fi-
nancial crisis and its dependence on what
Kirkegaard describes as deposits “trace-
Ireland has been working hard to implement economic
reform and has begun to reap the benefits. Cyprus is
altogether different: another troublesome Mediterranean
state whose parlous condition serves as a reminder of
both the EU’s narrow convergence criteria and the
terms for joining the single currency
A tale of
two islands
Enda Kenny, Ireland’s prime
minister, and Nicos Anas-
tasiades, who won 46% of
the vote in the first round of
the presidential election in
21 February 2013
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at source, or structural changes that
would bring an end to industrial use of
fossil fuels.
Trio and Segol claim that “none of
the voices speaking out against a short-
term ETS fix has either offered
alternatives or presented a vision of
how the scheme should be reformed”.
The very existence of the ETS has
blocked discussion of real alternatives
for more than seven years. Worse still,
the ETS has actively weakened policies
such as the energy efficiency directive
and the large combustion plants
directive and held back the expansion
of feed-in tariff initiatives.
The signatories of ‘Time to Scrap the
ETS’ are demanding stronger targets
and policies for reducing emissions at
source to enforce effectively the
transformation of EU energy
infrastructure and put an end to
industrial use of fossil fuels. ‘The
biggest threat to humanity of the 21st
century’, as climate change is often
described, will not be tackled with a
market-dependent trading instrument
that acts mainly as a subsidy for the big
polluters. It will take a political battle
and vigorous choices to navigate our
societies towards an environmentally
and socially sustainable future. We
should not leave that to the industry or
the markets.
Jutta Kill, Joanna Cabello and Belen
Co-initiators of the ‘Time to
scrap the ETS’ campaign
Wendel Trio and Bernadette Segol last
week called for support of “backloading”
and subsequent structural reform of the
failing emissions-trading system (ETS)
(“Turning point for ETS”, 14-20
Their article puts all dissenting
voices into one category, but nothing
could be further from reality. Last
Monday (18 February), more than 90
organisations, movements and
networks from around the world
launched a declaration calling on the
EU to scrap the ETS. The reasons
differ fundamentally from those of
climate change-deniers in the
European Parliament or energy-
intensive industries. The signatories
want effective and fair climate
regulation both in the EU and
internationally. The ETS in the EU is
preventing that from happening. It has
fed the illusion that a market-based
instrument focused on pricing can
trigger the changes needed to
transform our energy infrastructure
and the way our economies produce
and consume goods. No such change
has ever been brought about by a
trading instrument.
Let us not be deceived. Industrial
bodies that back the reform of the ETS
– such as Shell, Statoil, the Carbon
Capture and Storage Association, E.On
and Électricité de France – profit from
fossil fuels: some of them made
millions from carbon trading. They do
not want meaningful cuts in emissions
say: Saakashvili amply demonstrated
the declining political resources of his
United National Movement. These
conclusions do not fit into Lucas’s
picture, so he ignores them.
For example, he somehow forgot to
mention the provocations from
Saakashvili supporters that helped
spark the clashes, only saying police
seemed unwilling to intervene; or the
fact that Saakashvili decided on his
own initiative to speak at the
unsecured library, against the advice of
Georgian security officials.
Lucas suggests that Saakashvili has
been trying to co-habit with the new
government, but to no avail. The fact is
that the president has sought to
undermine and discredit Ivanishvili’s
government almost from the moment
of its dramatic upset victory. His
former prime minister, Vano
Merabishvili, recently went as far as to
say that Ivanishvili’s forces should be
purged from Georgian political life.
Ivanishvili’s efforts to build dialogue
with Russia are in fact producing
results. Trade is resuming for a
Georgian economy devastated by a war
with Russia that saw 20% of the
country’s territory lost to its then-
largest trading partner.
In a strong sign of closer ties, Štefan
Füle, the European commissioner for
neighbourhood policy, was in Georgia
this month to sign off a major EU aid
programme. NATO officials are noting
improved relations with a new defence
minister, and Georgia has boosted its
commitment to NATO operations in
Those truly interested in helping
democracy take hold should heed the
voices of the Georgian people. The
following passage from an open letter
signed by 18 leading Georgian
intellectuals says it all: “How can we
convince Western political and financial
circles that tyranny has developed in
our country in the past nine years? How
can we convince them to stop
strengthening the remnants of this
tyranny by means of their financial or
verbal support? And what type of future
will our democratic civilisation have if
non-democratic regimes continue to be
patronised in the future?”
Tedo Japaridze
Chairman, Committee on foreign relations
Georgian Parliament
The article “Turning point for ETS”
(14-20 February) gives cause to remind
everybody what the emissions-trading
system (ETS) is meant to be. The
scheme is supposed to be a cost-
effective, market-based instrument to
reduce emissions from industry by 21%
by 2020. The objective is to reduce
emissions, not to create a high
carbon price. Current prices for
emissions allowances reflect the
economic situation and will go up
again once European industry has
returned to growth. The ETS is
functioning as intended. It is not
“dying a slow, painful death” as the
article suggests.
The article states that climate policy
is not strangling EU business, but this
is totally incorrect. Deindustrialisation
in Europe is a reality for thousands of
employees affected by a series of plant
closures and massive staff reductions
in the manufacturing industries in the
past year.
Industry is moving away from
Europe, and companies explicitly state
energy costs as the main reason.
Investment is made in the US for
example, where gas costs one-third and
electricity half of what companies have
to pay in Europe. Of course, there are
also companies with business models
based on selling fuel or energy at
higher prices. But this does not mean
that high energy costs are generally a
good thing.
The EU itself has published
calculations saying that, for large
energy users such as the steel industry,
each euro increase in carbon prices will
result in an additional €190 million in
energy costs.
Competitors outside Europe do not
have to bear such costs. Synergies that
‘could’ be created between climate
policy and economic innovation, which
‘would’ address youth unemployment
at the same time, are not a reality. They
are attractive ideas, but why not try
first to keep the real jobs we have here
and now?
Jobs in the European steel industry
are not “unsustainable”, provided there
is a level playing-field with global
Future technological challenges for
the EU, whether these are in mobility,
infrastructure or energy, depend on
innovative steels. The European steel
industry is a world leader in
technology and environmental
protection. Steel supplies from outside
the EU have a considerably larger
carbon footprint.
Eurofer welcomes the Commission’s
initiative to present a green paper on
the 2030 energy and climate package.
The European steel industry supports
a sound climate and energy policy that
integrates social and economic
Gordon Moffat
Director-general, Eurofer
(European Steel Association)
In a recent commentary Edward Lucas
continues a distressing thread of
reporting on events in Georgia
(“Playing foul, crying foul”, 14-20
February). While I consider him a good
friend and an unbiased analyst, it
appears he is one of a number of
Western journalists of late who seem to
be misinformed.
For the next seven months, the country
will be governed in co-habitation
between the sitting president and a new
prime minister, who decisively defeated
the old government led by the
president’s party. Bidzina Ivanishvili won
primarily because he promised to right
the wrongs of President Mikheil
Saakashvili’s authoritarian leadership.
As he takes steps to do so, Saakashvili is
responding angrily. He is skilfully using
a sympathetic Western press to suggest
that Ivanishvili is undemocratic and,
even worse, pro-Russian.
Many of these reports are based on a
selective use of the facts. This time it is
Lucas who claims that Ivanishvili
demonstrated anti-democratic
tendencies during a recent commotion
at the Georgian national library. He
buttresses his case by assembling part
of the picture. There was, in fact, an
altercation, but Lucas leaves out some
important facts.
The reader is left with an impression
of a president hounded off the platform
by Ivanishvili’s thugs. A more objective
analysis, such as that recently released
by Oxford Analytica, described
Saakashvili’s behaviour as an
unconvincing diatribe against the
Ivanishvili government. It went on to
Time to scrap ETS in favour
of effective climate measures
Understanding industrial
reality is a necessity
Taking another view on Georgia
21 February 2013 COMMENT
ls £uroµean agricuIture
a good modeI for other
µarts of the worId to
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new trade-expansion goals and so on.
These successive initiatives –
including the latest initiative, for a
Transatlantic Trade and Investment
Partnership – must be seen as efforts to
promote and marshal transatlantic
economic exchanges in the wake of the
Cold War and of the coincident
acceleration of the globalisation drive
that has been re-fashioning the world
The effectiveness of these projects –
The EU’s and the US’s
ambitious hopes of a trade
deal within two years will
test already heavily
burdened negotiators,
writes Hugo Paemen
none of which differs substantially – has
been assessed variously. In practice,
though, integration of the transatlantic
market, trade and investment exchanges
has increased steadily over recent
decades, as reflected in statistics. It is
difficult to attribute these healthy results
to specific governmental programmes or
to the natural forces that drive a
transatlantic market already deeply
integrated because of previous, mainly
multilateral, negotiations.
The working group was asked to
review a wide range of potential options
for expanding transatlantic trade and
investment. In their conclusion, they
favoured a comprehensive agreement,
including reciprocal commitments to
open markets for goods, services and
investments, to approximate their two
regulatory regimes, and to elaborate
rules and disciplines that could be
applicable to the global trading system.
These general formulations suggest,
however, a programme that is much
more ambitious than emerges from the
announcements made by the presidents
on 13 February. That difference in
ambition might serve as a warning
against overly high expectations.
Negotiation over-stretch?
The European Commission says that it
wants negotiations to be completed
within two years. It is, though,
unrealistic to hope that agreement on
market access, on regulatory issues and
non-tariff barriers, and on global issues –
the three headings in the working
group’s wide-ranging recommendations
– can be reached at the same time and
within two years.
On both sides of the Atlantic, a variety
of stakeholders will be involved and
intricate decision-making procedures
will have to be followed. On the EU side,
27 (soon to be 28) member states and,
since the Lisbon treaty, the European
Parliament must be closely involved and
must approve the result. In the
meantime, the Commission’s negotiators
will have to find time to finalise trade
deals with India and some other Asian
countries (such as Vietnam, Malaysia
and Singapore) and to start negotiations
on a free-trade agreement with Japan.
For their part, US negotiators are in
the middle of negotiations on the Trans-
Pacific Partnership with eight countries
(and, possibly, Canada and Mexico). The
US Congress will also follow the
transatlantic negotiations very closely.
Some have asked for new fast-track
legislation, an additional element of
possible delay and complexity.
Above all, the US and the EU will
share responsibility for the success or
failure of the next ministerial meeting
of the World Trade Organization
(WTO), in Bali at the end of this year.
That meeting will largely determine the
fate of the so far ill-starred multilateral
Doha round of negotiations and, with it,
the future authority of the WTO as a
This rich menu may initially seem
attractive – but it is a menu that carries
the risk of either a lurch into bulimia or
negotiators retiring prematurely from
the table. Both sides will probably need
to reflect seriously about priorities,
compatibilities and domestic processes.
The negotiating capacity of both sides
will be seriously challenged. Of that,
there can be no doubt.
As to the substance, if the
Transatlantic Partnership is to live up
to its potential, all the agencies
involved will have to receive clear
instructions from the highest levels. As
in all serious negotiations, the
negotiators will need to establish an
atmosphere of trust and even to foster
a degree of connivance as to the
ultimate goal of the talks. They will
also need to rule out classical
negotiating devices that amount to
organising ‘negotiations about
negotiations’ and whose only goal is, in
fact, to kill off talks. Protracted
discussions on the scope, the
modalities of talks, preconditions and
down-payments belong to the register
of such destructive devices. Such
devices blocked the Doha round.
It should soon become apparent
whether the EU and the US can agree
upon a realistic work programme, with
negotiating schemes and specific time-
tables for each of the three components
of negotiations established by the
working group. Agreement on these
details will be an indication that the
world’s two major trading powers truly
are making a serious effort to align their
international economic priorities.
n 13 February, the
presidents of the United
States, the European
Council and the European
Commission announced
that they would “initiate the internal
procedures necessary to launch
negotiations on a Transatlantic Trade
and Investment Partnership”.
While doing so, the leaders also
welcomed the recommendations from a
high-level working group on jobs
and growth co-chaired by Ron Kirk, the
US trade representative, and by Karel
De Gucht, the European commissioner
for trade. The group’s recommendation
was that government leaders should
launch negotiations on a
comprehensive, ambitious agreement
that would address a broad range of
bilateral trade and investment issues,
including regulatory issues, and that
would contribute to the development of
global trade and investment rules.
The idea of institutionalising and
deepening economic relations between
the European Union and the United
States is not new. It was part of the
Transatlantic Declaration (1990), and
the New Transatlantic Agenda (1995),
the Transatlantic Economic Partnership
(1998), and the Transatlantic Economic
Council (2007). Each of these
programmes provided for regular
summit meetings, senior level talks,
Hugo Paemen was head of the European Com-
mission’s delegation to the United States from
1995 to 1999. He is now a senior adviser on EU,
international trade and regulatory affairs at the
American law firm Hogan Lovells.
Another transatlantic partnership?
A DEAL IN 2014? Barack
Obama, the US president, and
José Manuel Barroso, the
president of the European
Commission. REUTERS
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21 February 2013
õStephen Quest has been appointed director-general for information technology in the European
Commission. Quest, a former British civil servant who joined the Commission 20 years ago, is currently
director of the office for the administration and payment of individual entitlements. In 2004-10, he was
head of the private offices of Dalia Grybauskaite˙ and Algirdas Šemeta, the commissioners for financial
programming and budget. In 2000-04, he served as assistant to David O’Sullivan, then the
Commission’s secretary-general. Quest replaces Francisco García Morán, who has held the job since
2005 and has been appointed chief IT adviser to Maroš Šefcˇoficˇ, the European commissioner for
inter-institutional relations and administration. These changes will take place from 1 March.
õHélène Nicora, a French national, has joined the Brussels office of the International Trademark
Association (INTA) as policy officer. She will support INTA’s advocacy efforts in the EU and work on
policy issues affecting trademark owners. She was previously an international trade manager for
Pernod Ricard.
õMarcus Wiemann has been named secretary-general of the Alliance of Rural Electrification (ARE)
in Brussels, a trade association representing the off-grid renewables industry operating in developing
countries. Wiemann, a German national, was previously director of European affairs at the
International Association of Oil and Gas Producers.
õSend details of Movers & Shakers to info@europeanvoice.com
JOBS Languages and culture
Cultural exchanges
As director of EUNIC, Helena Kovarikova, encourages
people to embrace cultural differences and use them to
explore new methods of working, writes Ian Mundell
t is slightly surprising
that cultural organisa-
tions – such as the
Goethe Institut and the In-
stituto Cervantes – have
their own European um-
brella body. Yet along with
their activities promoting
national cultures and lan-
guages, they have a common
European agenda, as Helena
Kovarikova, director of the
European Union National
Institutes of Culture (EU-
NIC) global office in Brus-
sels, points out. “We work on
shared projects within Eu-
rope to support the integra-
tion process, and beyond to
promote Europe as a cultur-
al hotspot,” she says.
Set up in 2006, the net-
work now comprises 27
members from 23 EU coun-
tries. These range from ven-
erable giants, such as the Al-
liance Française and the
British Council, to smaller
and newer organisations
such as those created in the
Baltic states.
Kovarikova has experience
at both ends of the spectrum,
having worked for the British
Council and the Czech Cen-
tres. After studying culture
management and then Eng-
lish and German at Charles
University in Prague, she
worked in language teaching
and culture before the Velvet
Revolution. At that time, or-
ganisations such as the
British Council operated un-
der close supervision. “We
were watched and searched
by police whenever we came
to borrow books,” she recalls.
Possibilities for a deeper cul-
tural exchange were practi-
cally non-existent.
That all changed after 1989.
“Suddenly the British Coun-
cil had a walk-in office in
Prague,” she says. “These
were wonderful years be-
cause there was a lot of sup-
port [for language learning
and the arts], be it with fi-
nance or expertise. The
British Council network in
my country was immense.”
These opportunities came
just as Kovarikova was start-
ing a family, so it was not un-
til 1997 that she took up a
full-time job with the British
Council in Prague. Initially,
she worked on the national
network of resource centres,
then on marketing, language
teaching and the arts. The
Council eventually reduced
its operation and, in 2007,
Kovarikova moved over to
the Czech Centres. Her role
as head of projects included
liaising with the newly-cre-
ated EUNIC, and she be-
came the director of its glob-
al office in 2012.
Her experience in Com-
munist Czechoslovakia re-
mains a touchstone for her
work in Brussels. “For us,
culture was an essence and
base of the free-thinking
world. This is also the mes-
sage EUNIC helps to convey
beyond Europe,” she says.
EUNIC’s members come
together in over 80 clusters
around the world to develop
collaborative activities. Each
cluster involves three or
more institute offices in a
particular location, while
those without an office can
nominate a local cultural at-
taché to participate.
The network is also build-
ing larger projects, bringing
together its clusters in a par-
ticular region. The first is in
the Middle East and North
Africa. “It’s about building
the capacity of the cultural
sector in these countries,
with EUNIC support and
European experience,” says
Kovarikova. The emphasis is
on collaboration and mutu-
ally beneficial dialogue rather
than simply showcasing Eu-
ropean culture. “We strive to
involve local actors,” she says.
“It’s important to have work-
shops and debates that have
an afterlife, that lead to sus-
tainable co-operation.” Dis-
cussions are also progressing
for a cultural dialogue proj-
ect in China, and the first
steps have begun for a proj-
ect in sub-Saharan Africa.
In Brussels, meanwhile,
EUNIC monitors EU cul-
ture and education policy,
with a particular focus on
multilingualism. It has
launched EU-funded re-
search and mapping proj-
ects on non-formal and for-
mal language-teaching.
Another, dealing with cul-
ture in EU external rela-
tions, is in development.
One of the challenges of
running the network is the
range of organisations in-
volved. Some institutes be-
long to government min-
istries while others are more
independent, and there are
differing attitudes towards
Kovarikova feels that too
much can be made of these
differences. “It is very im-
portant simply to do things
together and capitalise on
different approaches, meth-
ods of working and expert-
ise of various cultural back-
Ian Mundell is a freelance
journalist based in Brussels.
Director of the
Union National
Institutes of
21 February 2013 CAREERS
2 March 2013
12 October 2013
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Policy Officer,
Government Relations

Smiths Group plc is a global technology company, listed on the London
Stock Exchange. We are a world leader in the practical application of
advanced technologies, across the transportation, security, medical,
energy, and telecommunications sectors. Every day, our products and
services touch the lives of millions of people and help make the world
safer, healthier and more productive.

In order to strengthen our contribution to policy debates in the EU arena,
we are looking for a confident and motivated Policy Officer for
Government Relations with a proven ability for forging professional
working partnerships with all stakeholders. Taking responsibility for
analysing legislative and political developments across the wide range of
policy areas that matter to Smiths Group, this is an exciting and
challenging role. You will report to the Associate Director, Government
Relations in the Brussels office.

If you have a university degree, 35 years’ experience in EU public policy
and government relations, and can demonstrate sophisticated advocacy
skills and political acumen, we’d like to hear from you. An understanding
of the EU security, transportation and healthcare sectors would be
particularly useful you’ll also need an excellent command of written and
spoken English (French and German an advantage) and good
interpersonal and networking skills.

We are offering the post under Belgian contract. If you want to apply
please send a CV and a cover letter explaining why you think you meet
our requirements to Francesca Nicolini, Government Relations Assistant,
no later than 15 March 2013: francesca.nicolini@smiths.com. Any
questions related to the recruitment process should also be addressed to
Ms Nicolini, Tel: +32 (0)2 274.05.70.

For advertising in print and on our
online career platform contact:
Sue Hedges at susanhedges@economist.com
or +44 1778 392580 (Belgium-based organisations) or
Maria Merc at mmerc@valex.co.uk
or +46 8 7684955 (non Belgium-based organisations)
What is a Workable Immigrant Integration Policy
and How Can It be Measured?
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21 February 2013
Daniel Cohn-Bendit, co-chair of the Greens in the European Parliament, has announced that he will
not seek re-election as a French MEP at next year’s election. The three-term MEP announced his
decision on Thursday (14 February) in a pamphlet titled “Pour supprimer les partis politiques!?
Réflexions d’un apatride sans parti” (To get rid of political parties!? Reflections of a stateless person
without party). Cohn-Bendit, one of the leaders of the 1968 student revolt in Paris, said that he would
become a “real, accomplished” 68er on 4 April (he was born on 4 April 1945), and that this would be
“the end of politics for me”. We will believe it when it happens.
Contact: pauldallison@economist.com
The roll-call of ex-MEPs
who have prison sentences
grows longer by the week.
Gigi Becali, who left the Eu-
ropean Parliament at the
end of 2012 after two-and-a-
half years of limited impact,
was last week given a sus-
pended sentence of three
Becali is a multi-million-
aire who owns the football
club Steaua Bucharest. A bit
like the European Commis-
sion, he does not rate the po-
lice and judicial authorities
in Romania very highly. So
when he had his car stolen
two years ago, instead of
turning to the police, he got
his bodyguards to track the
thieves down and take them
to a bar to explain them-
selves. According to a video
that appeared on YouTube,
the meeting seemed rather
jovial, aided by whisky paid
for by Becali, but he was lat-
er charged with illegally
detaining the men and
sentenced by a court in
Bucharest last week.
From June 2009 until De-
cember 2012, Becali was
nominally sitting as an inde-
pendent in the European
Parliament, though mostly
he just stayed away. His at-
The Party of European
Socialists marked its 20th
anniversary with a big party
this week in Brussels. The
roll-call of luminaries and
former luminaries of Euro-
pean socialism was long – a
recipe for too many speeches
for a decent birthday party.
Sergei Stanishev, the pres-
ident of the PES, was of
course one of the speakers.
So too was the immediate
past president, Poul Nyrup
Rasmussen, the leader of the
centre-left MEPs in the
European Parliament,
Hannes Swoboda, the prime
minister of Belgium, Elio Di
Rupo, and Peer Steinbrück,
aspirant for the chancellor-
ship of Germany.
But so too were the secre-
tary-general of the PES,
Achim Post, and vice-
presidents Jean-Christophe
Cambadélis and Katarína
Nevedalová, as well as Zita
Gurmai, the PES women’s
president, Kaisa Penny, pres-
ident of the Young European
Socialists, and Karl-Heinz
Lambertz, president of the
Belgian German community.
Also on the list were four
founders of the PES, relics
from the 1990s: Wim Kok, a
former prime minister of the
Netherlands, and Jan Mari-
The European Investment
Bank (EIB), which has its
headquarters in Luxem-
bourg, has made an intrigu-
ing appointment in an effort
to raise its game in Brussels.
A new position of Brussels
representative of the EIB has
been created, and Dutch
Ben Knapen, 62, has been ap-
pointed to the role.
Interesting investment
From October 2010 to No-
vember 2012, Knapen was
the state secretary for Euro-
pean affairs and development
co-operation in the Dutch
foreign ministry. In that role
he used to attend meetings of
the European Union’s gener-
al affairs council. Another of
those attending was Werner
Hoyer, Germany’s Europe
minister from October 2009
BEN KNAPENPolitician, journalist and rock-paper-scissors
champion (pictured defeating Leonard Orban in the semi-final).
to December 2011, who is
now the president of the
Hoyer said Knapen’s ap-
pointment was linked to EU
member states’ recent deci-
sion to increase the EIB’s
lending capacity. He said that
Knapen’s previous work in
journalism – he is a former
foreign editor and editor-in-
chief of the Dutch daily NRC
Handelsblad – would “help
reinvigorate the contribution
of Europe’s long-term lending
institution to addressing in-
vestment gaps across Europe
and beyond”.
Actually, Knapen’s time in
journalism had its share of
controversy. He was on the
board of PCM Uitgevers from
1999 to 2006, when it sold off
a controlling stake in many of
its strongest publications, in-
cluding NRC Handelsblad.
Knapen left PCM with a €1.5
million parachute, but not be-
fore a series of failed attempts
at revival, the worst of them
with venture capitalist group
APAX. Not the best experi-
ence in addressing invest-
ment gaps.
tendance record at plenary
sessions was 21% and he last
voted in June 2012. Never-
theless, the experience did
not put him off politics. He
hoped to join the national
parliament as a liberal and
become part of Romania’s
government coalition (it
calls itself an alliance). How-
ever, he was not satisfied
with the post that Crin
Antonescu, the liberal par-
ty’s leader, offered him and
so stayed out. Presumably
Antonescu is wary of accept-
ing invitations to convivial
Becali’s own goal
Still on the outside
nus Wiersma, his Dutch so-
cialist colleague, Massimo
D’Alema, a former prime
minister of Italy, and
Willy Claes, who 20 years
ago was Belgium’s foreign
minister and became the
first president of the PES.
Presumably Claes was
there to remind the audi-
ence of how much politics
has changed in the space of
20 years. He went on to be-
come secretary-general of
NATO in 1994 but was
forced to resign the follow-
ing year because of corrup-
tion allegations concerning
the Belgian socialist parties
and the defence companies
Agusta and Dassault.
While the PES has
changed, AgustaWestland
provides a measure of conti-
nuity. Last week, Bruno
Spagnolini, the chief execu-
tive of AgustaWestland, and
Giuseppe Orsi, the chairman
and chief executive of
AgustaWestland’s parent
company Finmeccanica,
were arrested in Italy in con-
nection with allegations of
corruption and tax fraud.
The ghosts of
socialism past
ON AND ON... The speeches from the PES platform did not
keep every party-goer entertained. REUTERS
The meeting last week (15- 16
February) in Moscow of finance
ministers and central bankers
from the G20 group of leading
and emerging countries was
not attended by Jeroen Dijssel-
bloem, the new president of the
Eurogroup, for the very good
reason that he was not invited.
Although the Dutch managed
to muscle in on some meetings
of the G20 in the early stages of
the credit-crunch crisis, they no
longer get a ticket, so Dijssel-
bloem, like Jean-Claude
Juncker, his predecessor as
Eurogroup chairman, is exclud-
ed. The eurozone was repre-
sented at the meeting – which
pledged its opposition for em-
barking on a global currency
war –by Mario Draghi and
Vítor Constâncio, president and
vice-president of the European
Central Bank, by Olli Rehn,
European commissioner for
economic and monetary affairs
and the euro, and by the finance
ministers of France, Germany,
Italy, Spain and Ireland. Spain
still gets an invitation even
though it is not officially one of
the G20 countries. Ireland gets
an invitation as holder of the ro-
tating presidency of the Council
of Ministers. That neither Spain
and Ireland are leading nor
emerging economies does not
seem to matter, but their pres-
ence ensures that the eurozone
is over-represented and Dijssel-
bloem will not get a look in.
blessing from the patriarch
was not enough to save Gigi
Becali from a conviction.
21 February 2013

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