European Union

On December 15 and 16 the Belgian EU presidency and the European Commission are holding in Brussels a conference with an inspiring title: Lift-Off Toward Open Government.

Acting Kosovar Prime Minister Hashim Thaci has declared victory for his Democratic Party of Kosovo (PDK) following the first parliamentary elections to be held in an independent Kosovo. He made the declaration before the country's electoral commission has published the preliminary results. Exit polls signalled that the PDK had won most of the votes but the victory was overshadowed by reports of serious fraud in two municipalities in the Drenica region, a PDK stronghold. A 94 percent turnout was reported in Skenderaj while in the rest of Kosovo it averaged around 45 percent.

The elections demonstrated the internal divisions of a society that broke loose from its former Serbian rulers and declared itself an independent state in February 2008. Turnout in the majority Serb areas of the north was around one percent, after the Belgrade government's call for a vote boycott. However, there was a higher than expected turnout among Serbs in the rest of Kosovo, a sign that divisions run through the Kosovar Serb community as well. Even if the PDK's victory is confirmed, it will need at least two more parties, including minorities, as coalition partners to create a new government.

Slovakia, which joined the eurozone last year, should have a 'plan B' to return to its national currency, the country's parliamentary speaker, Richard Sulik, has said, amid frustration over the way the eurozone is handling the debt crisis. "The time is ripe for Slovakia to stop blindly trust in what eurozone leaders say and prepare a plan B. This is the re-introduction of the Slovak koruna," Mr Sulik said in an opinion piece published in the bussiness daily Hospodarske noviny on Sunday (12 December).

The Slovak centre-right government has repeatedly called for private investors to feel the pain of any rescue operation under the eurozone umbrella. It considers the Greek bail-out a mistake that made European governments a hostage to financial markets. The parliamentary speaker said it is "irresponsible" for states to risk financial problems at home by taking on the liabilities of their debt-ridden colleagues under the European Financial Stability Facility, a temporary bail-out tool agreed in May and currently providing aid to Ireland.

German Chancellor Angela Merkel has pressed EU leaders to accept the treaty change as she fears Germany's powerful constitutional court may raise objections to the €440 billion temporary European Financial Stability Facility (EFSF), agreed in May and set to provide aid to Ireland. While EU policymakers insist the temporary facility and earlier aid to Greece do not contravene the EU treaty's 'no bail-out clause', Berlin is keen to remove any legal uncertainty, with a number of legal challenges currently under examination by the German court.

The treaty change is to take place under a new procedure introduced under the Lisbon Treaty - the simplified revision procedure - allowing for limited treaty changes without the setting up of a convention, on condition that new powers are not transferred from the national to EU level. In the draft conclusions, EU leaders also call on euro area finance ministers and the commission to finalise work on setting up the permanent aid mechanism, including features that could force sovereign bond holders to accept diminished returns on their investments, should a eurozone government be forced to call for aid under the ESM from 2013 onwards. The move stands in marked contrast to aid terms recently agreed for Ireland, under which holders of Irish sovereign debt and senior debt in Irish banks were not forced to accept a 'haircut.' Instead, Irish taxpayers will indirectly pay back the €85 billion borrowed from the EU-IMF for many years to come. Analysts say this move was partially designed to prevent further instability in the European banking sector, with many firms considerably exposed to the Irish market.

German finance minister Wolfgang Schaeuble has said his country is willing to discuss greater harmonisation of eurozone tax policy, adding that the next decade is likely to see Europe take significant steps towards closer political union. The remarks, made in Germany's mass-selling Bild am Sonntag newspaper on Sunday (12 December), come as EU leaders look set to agree a limited EU treaty change this week in order to set up a permanent crisis mechanism to provide financial support to struggling eurozone states.

Meeting in the German town of Freiburg on Friday, French President Nicolas Sarkozy and German Chancellor Angela Merkel also said eurozone leaders must draw a fundamental lesson from the ongoing debt crisis and take steps towards political integration, including the harmonisation of tax policies or labour law. These initiatives would foster greater convergence of eurozone economies and "show this is not just about currency issues but also about political co-operation, which has to be deepened," said Ms Merkel.

Germany has successfully won its demand for the permanent mechanism to include the private sector sharing in future bail-out costs, reports the BBC. Such a decision could significant raise the borrowing costs of 'peripheral' eurozone states, as investors demand extra yields to cover the costs of a potential debt restructuring under the new mechanism.

EU high representative for foreign affairs Cathy Ashton is to face tough questions from MEPs next Wednesday (15 December) over her strategy to promote European human rights values through the bloc's new external action service. On the same day as Norway's Nobel Prize committee handed this year's prestigious award to Chinese dissident Liu Xiaobo in absentia, European Parliament President Jerzy Buzek said he was keen to hear how Ms Ashton intended to work in the field.

"Next Wednesday in Strasbourg we are expecting to hear from Baroness Ashton how she intends to implement the commitments she made on this matter during the negotiations leading up to the establishment of the EEAS," he said.

The EU's "low profile" mission in Kosovo and the "fatigue" shown by Europeans on the independence issue are failing to address the increasing threat of partition in the northern part of Kosovo, a fresh set of US cables released by WikiLeaks shows just as Kosovars head to the polling stations on Sunday (12 December).

With five EU member states still not having recognised the independence of Kosovo and a certain "fatigue" emerging on the issue, US diplomats fear that Europe will cave in to Serb pressure for the northern part of the country to be split off - a development which could trigger ethnic violence.

This paper explains how institutional conditions in the European Parliament’s committees shape lobbyists’ strategic behaviour. Committees’ informal organization and formal procedures structure both the distribution of legislative influence and the opportunity to obtain advocacy. It is demonstrated how influence and, by implication, lobbying activity are skewed in favour of a committee elite. Here new evidence is provided to highlight the significant impact that open amendments play in a committee’s final report. The theory also emphasizes the role that message quality plays in the decision about who to lobby, and defines the limits to lobbyists’ preference to obtain advocacy from friendly legislators. Analysis is carried out on data obtained from 94 structured interviews combined with a unique data set of committee-stage voting outcomes.

A common argument against flexible integration as a solution to increased preference heterogeneity is that a likely consequence for those member states opting out of the enhanced cooperation is a loss of status and influence generally in the European Union (EU). It has been argued, for example, that the decisions by Denmark, Sweden and the UK not to join the Euro is considered to be free-riding, which leads to a bad reputation and exclusion from informal networks. We test this proposed free-rider effect by comparing the network capital of Euro-outsiders with insiders in the Council of the EU, using survey data of more than 600 member state representatives. The findings speak strongly against the free-rider hypothesis, as the Euro-outsiders are highly ranked in terms of network capital.

With the future of the euro currency in the balance, the European Commission on Wednesday (1 December) outlined details for a permanent strategy to help countries at risk of defaulting on their debts.

The European Commission presented plans for fundamental treaty changes that will extend the current aid mechanism – the European Financial Stability Facility – beyond its 2013 sunset provision. Details of the proposal will be debated by European leaders at their next EU summit on 16-17 December. The changes, which have been rumoured in financial markets for weeks, would increase risk for sovereign investors. Under the proposal, bonds issued after June 2013 would include a provision to allow creditors to renegotiate new terms if the country is on the brink of insolvency.

The entry into force of the EU's new citizens' initiative (ECI) - a petition procedure under the Lisbon Treaty allowing European citizens to demand action in a particular area - is likely to be welcomed by a legal battle between Greenpeace and the EU institutions. The environmental NGO has successfully collected the required 1 million signatories in a petition calling on the EU to ban GMOs, but officials from both the European Commission and the European Parliament say the move is premature.

A series of compromises and a new draft of next year's EU budget has increased optimism that member states and the European Parliament can reach a deal on the 2011 spending plan before Christmas. But parliament's call for a role in discussions over the bloc's next multi-annual budget (post 2013) could still scupper a final accord.

A day earlier, member-state diplomats agreed to drop previous calls for unanimity voting on decisions to transfer money between EU budget headlines. Parliament has made the greater level of spending flexibility, provided by member state qualified majority voting, a key demand in the ongoing battle over the 2011 EU budget.

Officials from all sides will next meet on 7 December to discuss the budget draft, in a bid to enable a parliamentary vote on the final version at its 15 December plenary session, the last of the year. Sources say Mr Barroso's announcement this week to come forward with proposals on EU 'own resources' in June 2011 has enabled both parliament and member states to claim victory on the controversial issue by breaking the link with the 2011 budget debate but ensuring future discussion on the subject. Now the parliament's demand for a role in discussions over the EU's post-2013 multi-annual budget remains the main outstanding stumbling block.

Since it came to power in July this year, the Slovak centre-right government has called for private investors to feel the pain of any rescue operation under the eurozone umbrella. It considers the Greek bail-out "essentially a mistake" and a "precedent" that made European governments a "hostage" of financial markets. "If we continue this way, we are close to a pyramid scheme," the Slovak prime minister, Iveta Radicova, told journalists after the Wednesday government session dealing mainly with Ireland (24 November). She warned that a system of accumulating debts eventually risked falling like "a house made of cards". "Once again, taxpayers are expected to pay the bill. Once again, the banks are being rescued," Ms Radicova said, hinting that Lisbon and Madrid could be next going cap in hand to their EU colleagues.

The incoming Hungarian presidency of the European Union is bracing itself for an unexpectedly difficult six months (Jan-June 2011) at the helm, likely to test the diplomatic skills of the presidency first-timers to the full. The ongoing fight to shore up eurozone stability, together with calls for EU treaty change and acrimonious EU budget talks are among the prickly issues on the packed agenda, with Turkish accession talks and the Roma ethnic question also potential flashpoints.

Some EU and member state officials have been alarmed at what they perceive as a concentration of power under Herman Van Rompuy, the bloc's first president of the European Council, the body representing EU leaders. "Mr Van Rompuy has taken on a number of issues that should instead be run by the rotating presidency, helped by the current political limbo surrounding the Belgian government," one Polish official said earlier this month.

MEPs are ready for an agreement on the 2011 budget within the limits set by the Council, provided EU governments accept Parliament's request for budget flexibility and an agreement on a future working method for EU funding. This was the message in Parliament's resolution on the on-going negotiations on the 2011 budget, adopted on Thursday.The resolution was adopted by an overwhelming majority (486 in favour, 64 against and 21 abstentions).MEPs are ready to "facilitate an agreement on the 2011 Budget and related elements within a very tight timeframe" provided three conditions are met:

EU Enlargement Commissioner Stefan Fuele has given the EC questionnaire to Serbian Prime Minister Mirko Cvetković in Belgrade this Wednesday.

Cvetković stated on Wednesday that Serbia will answer the European Commission's (EC) questionnaire by the end of January 2011, while Fuele assessed that Serbia is in a good position on the road to the EU. "The government's aim is for Serbia to obtain the EU candidate status by the end of 2011 and to determine the date for the beginning of negotiations," Cvetković stated.

The Dayton peace agreement ended the war in Bosnia 15 years ago by effectively dividing the former Yugoslav republic along ethnic lines, but today that accord is an obstacle to the country’s development and European integration. The deal, brokered by the United States and accepted by Serbian, Croat and Bosnian leaders November 21, 1995, created a state with weak central authority and powerful, nearly sovereign ethnic entities.

It was about that time, in 2000, that Bosnia outgrew the Dayton peace agreement. The compromises aimed at preventing any side from gaining the upper hand led to the country’s political paralysis. With all the power concentrated in ethnic communities, fiery nationalist rhetoric remains a much safer bet for politicians than declaring a willingness to negotiate and compromise.

“Bosnia’s key problem is a vision of its future shared by political leaders,” an EU enlargement official, Dimitris Kourkoulas, said recently in Sarajevo. Until Bosnia finds a way to move forward, its Muslims, Serbs and Croats will remain stuck halfway between Dayton and Brussels, between the fatigued EU and their own bickering leaders.

European Commission President Jose Manuel Barroso was cheered in the European Parliament on Tuesday (23 November) when he outlined plans to publish an official proposal on EU self-funding before the end of June 2011. A fresh draft of next year's budget is also expected before 1 December.

Parliament has said debate on the controversial 'own resources' issue is a key demand in the ongoing battle over next year's annual EU budget, but France, Germany and European Council President Herman Van Rompuy have all indicated they oppose the idea of an EU tax. "We will use our right of initiative to put forward formal proposals as to own resources before the end of next June," Mr Barroso told MEPs in the Strasbourg plenary chamber. "The proposals ... will make large endeavours to achieving a consensus in the future. We're open to any ideas," he added.

"I am against the introduction of an EU tax," German Chancellor Angela Merkel said earlier this month. "I do not think that redesigning the way the EU get its revenue is a top priority," Mr Van Rompuy said a week later. Reacting to Mr Barroso's announcement, non-attached UK MEP Diane Dodds called on British Prime Minister David Cameron to clearly state that proposals for an EU tax would trigger a referendum in the country.

German Chancellor Angela Merkel on Tuesday (23 November) warned that the euro is in an "exceptionally serious" situation as the European Commission issued a veiled warning to the Irish political class not to topple the government. "I don't want to paint a dramatic picture, but I just want to say that a year ago we couldn't imagine the debate we had in the spring and the measures we had to take," she said in a speech in Berlin to the Confederation of German Employers, the BDA.

Meanwhile, EU economy commissioner Olli Rehn issued a veiled warning to Irish opposition politicians not to topple the government. Speaking to reporters in Strasbourg asking about worries the Fianna Fail-Green government in Dublin could fall, Mr Rehn said: "Stability is important." "We don't have a position on the domestic democratic politics of Ireland but it is essential that the budget will be adopted in time and we will be able to conclude the negotiations on the EU-IMF programme in time."

The Irish government has unveiled a far-reaching austerity package with sweeping cuts and tax hikes in an effort to meet the tough conditions of an €85 billion EU-IMF bail-out plan, an architecture of adjustment that will radically alter the very structure of how the country is run.

It is a plan that will hit every citizen and sector of the Irish economy, but will hit working people, students and low-income earners the hardest, a move that has already provoked both a deep fury from many but also a bitter resignation amongst others. Key measures include a slashing of welfare benefits, a hiking and broadening of income taxes, a sharp increase in university fees, the imposition of property taxes and water charges.

Dublin appears to have won the day against pressure from other EU member states and the commission that it hike its ultra-low corporation tax of 12.5 percent, calling the rate "a cornerstone of our industrial policy". Acquiescing to an IMF demand that labour costs be slashed, pay for minimum wage earners will be reduced by a full 12 percent, higher than the 10 percent that had been predicted, from €8.65 an hour to €7.65.