Graham Watson MEP

Graham's Newsletter Friday 21st October 2011

Greetings

The first two operational satellites for the EU's 'Galileo' sat-nav system were launched yesterday. Within this decade another 28 are due to go up. In Parliament we are considering the agreement reached with the USA on co-operation in matters of satellite navigation, which looks sensible to me.

The main announcement from the European Commission this week was a proposal to dedicate EUR 50 bn over six years to the Connecting Europe facility. Transport networks would get just over EUR 32 bn and energy and telecoms just under EUR 10 bn each. The European Investment Bank would launch project bonds to supplement the amount of money available, providing a good chance of a Keynesian style kick-start of the EU's faltering economy. A total of EUR 210 bn is believed to be needed for the projects identified, but if government gets its commitment right most of that should come from the private sector. I am pleased to see my pet plan for a North Sea - Baltic Sea electricity super grid for renewable energy is still among the schemes identified. Parliament and Council (the 27 member states) will now discuss and will need to approve the plan.

Other news from the EU this week has been much less encouraging. EU Trade Commissioner Karel de Gucht (Lib, Belgium) is due to unveil a report which shows a rise of 30% in protectionist measures among the EU's major trading partners since 2010. France and Germany are said to be still at loggerheads over measures to be taken at Sunday's EU Council meeting (the heads of state and government 'summit' postponed from Mon-Tues). Banks need to be recapitalised, Greece re-floated, new rules set for the management of the euro and the bailout fund put into operation in such a way that its EUR 450 bn funds can be leveraged to provide some EUR 2 trn of guarantee capital. Parliament and Council took a small step further forward on Tuesday evening on the management of the euro by agreeing to ban naked short-selling of credit default swaps by the end of next year, which will prevent hedge funds making money from speculating on whether a country will go bankrupt. But whether 27 heads of state and government can muster the collective will to convince the money markets (at Sunday's summit) that the EU is capable of managing its affairs properly is still an open question.

I travelled to Westminster on Tuesday for a meeting with Nick Clegg, Vince Cable, Danny Alexander, Chris Huhne, Lord Wallace, Helen Wallace and EP economics committee chair Sharon Bowles to discuss how to prevent the UK becoming increasingly marginalised in the EU if the 17 euro zone countries do bite the bullet on Sunday and substantially deepen their co-operation. At the same time a House of Commons committee considering a petition for an "in or out of the EU" referendum recommended the proposal go to a vote on the floor of the House on Monday. The vote will not be binding on the government, but it is another in a series of events which bring to my mind the concerns of Yeats' poem The Second Coming more than Lemony Snickett's Series of Unfortunate Events.

Regards

Graham

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