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Home arrow newsitems arrow EU's Almunia to EuroFora on Eco Stimulus plans, before London G-Summit : Keep the Rules or Opt-out !

EU's Almunia to EuroFora on Eco Stimulus plans, before London G-Summit : Keep the Rules or Opt-out !

Written by ACM
Wednesday, 25 March 2009
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    EU Commissioner on Economy and Finance, Joachin Almunia, replying to 3 "EuroFora" questions in Strasbourg before next week's London Global Summit, made it clear that all EU Member States must, more or less, respect EU Rules on the Monetary Stability Pact when they draft their Economic Stimulus policies, unless they want to "Opt-out" of EuroZone, as the UK has already done...

  Several EU Countries must correct imbalances in rather strict Time deadlines, and this is not an  "impossible task", but "a very possible and attainable task", as Almunia told us. But it's only the UK which could practically ignore EU's calls, "because of the Opt-out they have"....                                                                                                                                           

acm_3_questions_to_eu_commissioner_almunia_02 

       The issue got a larger, EU-wide and even Global Political dimension, one day later at EU Parliament, when USA's new President, Barack Obama's call on Europe to augment Spending against the Economic Crisis at the eve of G-20 Summit, was considered by some EU officials, (as EU chair, Czech Prime Minister Topolanek or EU Commission's President Baroso, etc), as partly deviant to Euro-Zone rules of the EU, whose priority now seems to be a new, multi-polar agreement on the Regulation of World's Financial Markets, to avoid similar abuses and crisis in the Future.  

 Even if he appeared as partly sparing for the moment some of EU's driving forces, as France or the UK, Spain, etc, who got more Time than others, Almunia stressed that, as a matter of principle, all EU Member States should comply with the same rules, applied according to the particular situation of each one of them.


        The results of EU Commission''s check on 5 EU Countries : France, the UK, Spain, Greece, Ireland and Cyprus, gave, at first, an impression to some that a "difference" was made "between EU Countries", as an Italian journalist said.

        F.ex. paradoxically, Greece seems to have, in comparison, some better indicators than other EU Countries checked this week :

    * Deficit in Greece, after reaching 3,7% of GDP in 2007, is estimated at 3,7% in 2008, over 3% in 2009, and exceeding 4% in 2010, according to EU Commission's forecast, (while the Greek Government tabled on just 3,2%). Only Cyprus does better, with a lower deficit than the threshhold of 3%.

    France comes next, whose deficit aims for 2009 and 2010 were revised upwards at 5,6% and 5,2%. In Spain, it's expected to arrive at 6,2% in 2009 and 5,7% in 2010.

    But in the UK, Deficit estimates mount at ..9,5% in 2009/10. In Ireland, the deficit already reached 6,3% in 2008, and is expected to rise up to 11% in 2009, and 13% in 2010 !

(../..)

 

    * On Growth, Greece "has a higher percentage ..than the EU average", observes EU Commission : "Real GDP Growth reached +4% in 2007, before decelerating at +3% in 2008", the year of the Global Crisis, revealing that "Greece enjoyed a Good Economic period in 2007 and 2008".


    In the other 5 EU Countries, Growth figures are less good, for the moment : Cyprus, after a +1% Growth in 2008, may fall in recession in 2009 with -1%. In Spain, after a + 1,2% GDP Growth in 2008, estimates give a - 2% contraction in 2009. In France, after a +2,2% GDP Growth in 2007, the 2008 estimate was +0,7%. But Ireland's GDP decreased - 2% since 2008. And for the UK, EU Commission forecasts a "sharp contraction" all over 2008-2010.

    - Despite that, Almunia asked  from Greece "to bring the deficit down from 3%" as soon as in 2010, and wants to see efficient measures on October !  And Cyprus is asked to "stop" its Stimulus plan "next year".

    On the contrary, from Spain and France he asks results only in 2012, i.e. 2 Years later, and from Ireland in 2013, i.e. 3 Years later. As for the UK, Almunia replied to "EuroFora"'s question by asking measures only .."when the revival of the economy will allow"...

    This difference made some Journalists (from Italy, France, etc) suspect some kind of "differenciation" between EU Countries :

    - "This gives the impression that there might be a Difference inside the EU between some Big Countries, which get more Time, and some Small Countries, which are asked to comply with Stricter rules", criticized an Italian Journalist.

    - "In Greece, the estimated Deficit is Lower then in the other countries, while Growth also continues". On the contrary, "in Ireland, the Deficit is much Higher, and is due to worsen, because there are more pesimistic forecasts on Growth, with a faster and larger Downfall of production", Almunia replied.

"In Spain and France, the deficits are between Greece's and Ireland's", while revival is still awaited.  Thus, "we (EU Commission) dont' ask the same things" in the other 3 countries as in Greece, which "can move faster".

    But, in fact, the real cause of this otherwise astonishing difference, seems to be an "old problem of  Debt, which exists since Many Years from the Past" (i.e. since previous governments, before 2004), as "EuroFora" asked Almunia, who did not deny : The problem in Greece clearly is that it inherited from the past a gross public Debt which "remained at 98,4% of GDP in 2007", diminished a bit in 2008 (94,6%), but is estimated to grow at 96%in 2009 and 98%in 2010, according to EU Commission's data.

    On the contrary, in Ireland the Debt was only 40,6% of GDP in 2008, and wouldn't breach the 60% reference before 2010. In Spain it's 40,3% in 2008, and 53% for 2010. In the UK it's expected to rise to 70% in 2013/14. In France it's estimated at 67,1% in 2008 and 73,9 in 2009, 77,5% in 2010.

    - "Why this Acceleration in Greece ? It's not only because it has less deficit, and not only because it has a Positive Growth percentage, and, thus, can act earlier, with accessible measures". "But also because there are 2 Facts on which is needed the utmost Care, during this period of (Global Crisis) : An  External Imbalance, with a  big and persisting Current Accounts' Deficit, and also a very big level of Debt, compared to its GDP", Almunia added

    However, the EU Commissioner looked optimist in reply to an "EuroFora"'s question if he believed that "such an old problem, which exists since many years, could be settled in 1 year" :

    - "It's not an impossible task. It's a very possible and attainable task", replied Almunia to our question, reminding that "in a previous occasion", when "Greece had received a recommendation for the correction of an excessive deficit, ..it was corrected", between 2005 and 2007. .And "the Greek Government is convinced that, for their own interest, not only because they want to comply with the EU framework, but for the interest of the Greek Economy, this correction of the deficit is warrant".

    But even Cyprus, whose Debt, estimated at only "49.3% of GDP in 2008, is projected to decline to 44.2% of GDP in 2012", is advised to stop its Economic Revival Plan in 2010, in order to prevent risks imbalances in the future, because of the current Global Crisis' environment.  Asked by "EuroFora" to "explain, in a crystal-clear way", why Cyprus, with a lower deficit than the 3% threshhold and a diminishing debt, according to EU Commission, should take Restrictive Measures now, Almunia focused on the Crisis' impact :

    - "In the case of Cyprus, we (EU Commission) consider that the Fiscal Stimulus should not continue Next Year (in 2010)", he confirmed. Because "we think that the figures on the Economy of Cyprus from 2009 to 2012, ..can become a little bit worse, given the evolution of the (Global) economic Environment". And "Cyprus' Pulic Finances, over the Long term, have problems of Sustainability : We have analyzed that in the Past, and the situation has not changed from the Structural point of view". "At the same time, as Greece, it has a Current Account Deficit, and in this moment, in this (Global) Crisis, the persistence of a current accounts deficit is an important macroeconomic imbalance, that requires the contribution of adequate fiscal policy to be corrected".

    In other words, in itself, nothing new...

    In contrast, UK's particular situation among the 5 EU Countries checked, revealed more clearly the main issue :

    The EU Commissioner was asked by "EuroFora" to explain the "strange example given to other Countries" by the UK, where, despite some negative figures (see above), even if the measures earlier advised by the EU were "not taken", and a Time "Deadline wasn't met", EU Commission does nothing else than simply .. issue a new recomendation, advising again to take more such measures and ..postponing the Time Deadline for later.

    After insinuating that "the UK case", might not be the right, but a "bad example" for other EU Countries, Almunia admitted that he asks from London to simply "correct the imbalances..... as soon as possible, once the recovery will come back" !

    But he explained "the repetition of recommendations in the case of the UK", by observing that "we (EU) cannot go beyond this step, because of the Opt-Out they have"....

    However, it's the "own interest of the British Economy to correct" that, he concluded.
 
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    Indeed, some MEPs  teased, the same day, British Prime Minister Gordon Brown, (who visited Strasbourg to discuss the preparation of the forthcoming Global London Summit), for keeping too many "Opt-Outs" from EU Rules, as fex. the Leader of "Greens/ARE" Group, Italian MEP Monica Frassoni. Going even further British Liberal MEP Graham Watson, leader of the "Liberal/Democratic" Group, launched a call for UK's entry to the EuroZone !..
    
    More pragmatic, French President Nicolas Sarkozy, has already declared that it seems always possile and desirable to forge a special status for the UK to get together with EuroZone. Thus, he reminded the useful, even if partial, participation of Gordon Brown to the decisions taken by the 1st, Historic EuroZone's Heads of State and Government Summit, in Paris, on October 12, 2008, which was the first to be succesful in starting to make Stock Markets move in a positive direction.
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    The recent paradox of freezing EU Talks with front-runner Croatia, while continuing controversial EU - Turkey talks, despite Zagreb's acceptance of Refugees' Human Rights to return, that Ankara refuses fex. in Cyprus, while both have "Good Neighborhood" problems vis a vis Slovenia, or Greece, Cyprus and Armenia respectively, can it be justified by the non-fullfilment of EU criteria, as Slovenia says, or, is it "Double Standards" ?    

The question became unavoidable after statements by Presidents of Slovenia and Croatia, Tuerk and Mesic, respectively, to "EuroFora", exclusively or among Strasbourg's journalists this week at the CoE, on the sidelines of its 2009 Summer University for Political Schools, which topically brought them together as successive key-note speakers.


    Comming only a few Months before EU checks Turkey's compliance to its commitments on Cyprus, etc., scheduled for December 2009, this obviously has a special importance for the coherence of EU Enlargement's principles.

     Suspension of EU Negotiations is a normal consequence in case of a Candidate Country's failure to fullfil EU Conditions, such as "Good Neighborhood relations", stressed at first Slovenian President Danilo Tuerk, current CoE's chair.

    But, regarding EU's Criteria,  there shouldn't be any "Double Standards",  reacted Croatian President Stjepan Mesic, commenting the fact that Turkey's controversial EU negotiations continue, while they were recently "freezed" in the case of Croatia, an "unquestionably European Country", which oficially accepts to respect Refugees Human Rights, contrary to Ankara's notorious refusals or reluctance.                                       

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                                                                                                                                                                                                                                                                                                                                                           - "EU itself has set as a Criterium (for EU Enlargement) the "Good Neighborhood relations",  and their absence justifies the "Suspension" EU Negotiations, (f.ex. with Croatia), because of a Border dispute affecting the territorial integrity of an EU Member Country, stressed Slovenian President, Danilo Tuerk, CoE's Chairman in office (May - November 2009), speaking to Journalists in Strasbourg including "EuroFora".    

Questioned earlier what "consequences on EU's Enlargement policy" can have the "Ban on EU Membership Negotiations", imposed to Croatia, Tuerk replied that "this question comes down to the fulfillement of (EU) Criteria for membership. One has to look at each Candidate Country ., from the point of view whether it fullfils the Criteria that EU has set. One of them are Good Neighborhood Relations, I'd like to remind. And also, there are other factors, such as Justice, Home affairs, Rule of Law, and others".


    - "Now, ..Candidate Countries are at Different Levels of fulfillement of Criteria", he observed.

    - " Croatia is obviously the closest to that. I'm rather optimistic : I think that in the coming Months we'll have an opportunity to look at all these issues constructively and hopefully we'll be able to make progress". "My main concern, at this point, is the situation in Bosnia : We haven't seen enough progres domesticaly. We haven't seen enough during ..political parties within their country.We need a New Energy, a new energetic move towards the Candidature for EU membership. "Other (Western Balkan) Countries (Serbia, Montenegro, FYROM, Albania) have been making soaring Progress, and I think that they should be ready, in a few Years, for the Candidate status".

    - "As far as the Western Balkans are concerned, .. nobody should be left outside" the EU, Slovenian's President concluded, ommitting to mention Turkey's controversial EU bid.

    - "This process may be seen as Slow, but..  Slovenia has also has also been exposed to various "Booms of Slowness" in our accession period. But now we can say that the process was relatively quick, because changes which occur after becoming EU member, are quite large, and they require proper Preparations before the (EU) membership becomes a new factor, an impacting line for a new (EU) member country".
----------------------------

EU "Solidarity" ?
------------------------------   

Slovenian statements made some participants from certain 3rd Countries as FYROM, etc. claim that "the Principle of EU Solidarity" would "produce a.. rising European Union Nationalism (sic !), against Non-EU Countries", as they said, asking unhappy foreign countries to form a "bloc" to exert pressure on the EU...    

But Croatian President Stjepan Mesic dismissed that, supporting "EU Integration", "after the Economy also in Political" issues, as "the achievement" of our times. In EU there is "diversity, but it's United", he stressed, "EU has to be United so that it can become a central factor of Peace" also at the surrounding areas, he replied.

croatian_president_mesic_ 

Speaking later exclusively to "EuroFora", the experienced twice President of Croatia, former President of the International "Non-Aligned" movement, denounced "Double Standards" in the way EU treats recently Croatia compared to Turkey :   

 - "I think that there shouldn't be Double Standards", stressed the Croatian President, in reply to a Question comparing the freeze of EU - Croatia talks, with the continuation of EU - Turkey talks, despite the fact that Croatia is an "unquestionably European country", while Turkey's EU bid is notoriously controversial.


    Mesic was reacting to the observation that, even if he confirmed his "respect of Refugees' Human Rights to return, etc. (See infra), nevertheless, EU talks are suspended with Croatia.. While for oher, controversial candidates, who refuse to respect Refugees' Rights to return, etc., as fex. Turkey does in occupied Cyprus and elsewhere, EU negotiations continue".

    - "I believe that Croatia's accession will confirm that all European Countries who fulfill all of the Conditions and achieve European Standards, have to join the EU. There shouldn't be any Double Standards", went on to add in reply President Mesic.

    In this relation, Croatia's President found "of paramount importance", CoE's "mechanisms enforcing ECHR's judgements"
    
    - "On Refugees and Displaced persons, the process will be completed only after the last person demanding to return will be allowed to do so !", President Mesic Croatia stressed earlier, setting a general standard of obvious importance also for otherr candidates, as f.ex. Turkey, often accused to exclude or heavily restrict Greek Cypriot Displaced persons' return to their Family Homes and ancestral land, provoke difficulties to Turkish-Kurd IDPs return to their home regions at the South-East, etc.

    Some "2.000 People are still reported Missing" in former Yugoslavia, for some Years, (as in Cyprus, modern Europe's oldest case, for 3 Decades. Nagorno-Karabach, Tcecnya in Russia, etc, more recently), and Investigations "will only be completed after establishing the fate of the last one of them", he added.
    
    Speaking earlier on "War Crimes", President Mesic stressed that "Leaders are responsible for (the) Wars (of the Past), not the People", and called against Impunity :  "Individuals have to be held Responsible for Crimes. International Penal Tribunals have to persecute those individuals", perpetrators of War Crimes, he underlined.

    Such statements naturally made Mesic rather popular at ECHR, whose President, French EuroJudge, Professor Jean-Paul Costa, looked particularly smiling when he welcomed him later on Wednesday afternoon, after Slovenian President Daniko Tuerk earlier this week.
           

***

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