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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"....                                                                                                                                           

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       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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Former "Green-Red" German government's Foreign Minister Joschka Fischer's job at the controversial Turkish pipeline "Nabucco" was denounced as "not proper", "very bad", and "incompatible with Democracy", by the new President of EU Parliament's EuroLeft Group, German Lothar Bisky, replying to an "EuroFora" question.

For once, criticism of Joschka Fischer's doings with Turkey affecting Europe, didn't come only from the Center-Right of the political spectrum, but even from his Left side : The experienced Bisky, who has been chairing all over 1993-2009 the PDS - Die Linke party :  

- "Former Foreign Minister Joschka Fischer got involved in dealings with oil-gaz business in a foreign country, Turkey, and its controversial Nabucco pipeline. This raises questions about Democracy, also because of the well known problems of Human Rights violations in that country. Do you thing that this might be abused in order to cover up and close EU's eyes on Human Rights violations ?", "EuroFora" asked Bisky.

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- "Nabucco pipeline is (only) at the planning stage". And "there are some difficulties",  he observed from the start. But "'I don't want to get into the details of Nabucco pipeline, because I don't think that there is any point for it at the moment".
 
At any case,  "we  (EU Parliament's EuroLeft Group) strongly believe that Politicians should not get involved in the Energy Business, and all these commercial transactions", President Bisky declared on the Joschka Fiischer's affair.

- "We feel that it's something that shouldn't be done. It's not proper !"           

- "We don't think that it's compatible with Democracy either, and it gets politics into a very Bad track", Bisky went on to denounce.
                                                                                                                                                                        
- "EuroLeft  and "Die Linke" always spoke against that, saying that politicians should not get directly into the arms of private enterprises"

- "It is pretty bad if a former Minister takes a job f.ex. in a major Energy producer. So, it's an issue if a Minister who may have seen excellent opportunities, subsequently gets personally grasp of them, in very serious parts of the economy, once he has given up his (Government) job."

- "It doesn't really make politics in general look any better'", Bisky concluded.

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Earlier, this week in Strasbourg, other Journalists had also raised critical questions on former Foreign Minister Joschka Fischer's involvement in the conroversial Turkish Nabucco pipeline to the President of his own EuroParty : Kohn-Bendit of the "Greens", who, contrary to Bisky, tried to find excuses for Fischer, while criticizing his long-time partner, Schroeder for having done a similar move :

- "Shroeder was chancellor", and he "negociated" with "Russians", who gave him a job only "3 Months" after he resigned from the Government. While "Joschka Fischer", on the contrary, got a job with the controversial Turkish Nabucco pipeline only "4 Years after" he left the Government. "He didn't negociate Nabucco", so I have "no objection", Kohn Bendit claimed.

But, many Facts indicate the contrary :

Joschka Fischer was Foreign Minister in Germany from 1999 up to 2005 : I.e. from the year that EU took the controversial decision to give Turkey a "Candidate" status, until he year it started controversial "accession negotiations, (later declared "open-ended" after Sarkozy-Merkel's arrival from 2005-2007).

During that period was prepared the controversial so-called "Annan" Plan (in fact, drafted by others and attributed afterwards to the former UN SG) on Cyprus, which failed after a Popular Referendum said "No" on 2004 with a large Majoriy of 3/4 : 75%. Mainly because it was criticized for making too much concessions to the Turkish side :  Particularly by restricting Greek Cypriot Refugees' Human Right to return to their ancestral Land and/or get restitution of their Familiy Homes and private properties, usurpated by Ankara's Army since the 1974 militay invasion and continuing occupation of the northern part of Cyprus. And by weakening the Central Government, leaving to 2 "constituent States" so much powers and separate interests that more conflicts appeared inevitable, provoking the danger of a break-down in the foreseable future, with more crisis, troubles, perhaps bloodshed, etc., instead of creating an harmoniously integrated, really one federal State.

The controversial Plan was finalized on March-April 2004 at Burgenstock (Switzerland), curiously in the presence of an Envoy by the Ministry of Foreign Affairs of Germany, then governed by Joschka Fischer, but in the absence of a French and not even an European Union's Envoy, contrary to what was usually practiced on similar occasions in Switzerland (fex. in 1997 at Montreux, in 2000 at Geneva, etc).

Turkey notoriously exploited the failure of the "Annan" Plan in order to convince the EU to decide to start accession Negotiations on December 2004. This provoked an unprecedented series of Institutional Crisis inside the EU, shortly afterwards, when French and Dutch People rejected, 2 popular EuroReferenda by a majority "'No" vote to the EU Constitutional Treaty on 2005, aggraveted in 2004 a Majority Abstention to EU Elections, etc., followed by the recent Irish "No", etc.

"Nabucco" Gas pipeline was notoriously planned since ..2002. It follows an even earlier idea, for an Oil pipeline Baku-Ceyhun, which started to be prepared on 1999-2001 and was meanwhile recently completed.  

So, facts indicate that what is now at stake is based on decisions made during Joschka Fischer's term as former Foreign Minister, closely interested in Turkey's controversial EU-bid.

To the point that he now practically ...switched jobs with a poliician from Turkey, (the State which pays today openly Joschka Fischer), Mr. Ozdemir, who came earlier in Germany, got fast the nationality, and became EiuroMP in a few years, continuing now as head of the "Greens" in Germany, i.e. in Joschka's former job !...

Such astonishing facts risk, unfotunately, to give to German politician Lothar Bisky's criticism of  representative Democracy a topical meaning :

 - "We (EuroLeft Group) think that what is really at stake is Democracy. It's not only about Gas Pipelines or Energy sources", President Lothar Bisky went on to add in his reply to "EuroFora"'s question on Joscka Fischer's personal interests in the controversial Turkish "Nabuco" pipeline.

Such facts, "make People get more distance from Politics. ...People had had enough, and they are fed up !".

- "That's why we (EuroParliament's "EuroLeft" Group) want to strengthen Direct Democracy in Europe. Citizens should be involved in the (EU) Decision-making. In the end of the day, it's not going to help anyone if Politicians are always taking decisions, without involving Citizens. We want to give a voice to the People of Europe. They've got to have their say in the decisions that are taken. That's one of our absolutely fixed and steadfast views. We want more Direct Democracy in Europe. That's how it can become more effective and stronger", he concluded.

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