Graham's blog Friday 6 March 2009

Published on Fri 6th Mar 2009

The extraordinary European Council meeting (heads of state and government summit) on Sunday reaffirmed policies already widely agreed for tackling the economic depression: bail out plans for EU countries in serious trouble; better regulation of financial services providers; co-ordination of state aid to help car makers; reaffirming the rules of the single market and the stability and growth pact and persuading the banks to start lending again. What was not expected was the clear steer given by French President Sarkozy at the subsequent press conference that he is re-thinking his support for a second term for Commission President Barroso. From the person who - quite unnecessarily - gave Barroso a blank cheque in December, this volte face came as a surprise. It will have wounded Barroso, though not (yet?) fatally.

If Barroso was wounded, he managed to hide it yesterday when he came to Parliament to present to the political group leaders the paper adopted on Wednesday on how to cope with the crisis. This paper, which will go to the regular European Council economic summit on March 19, is unexceptional: it proposes better regulation of the banks, as recommended in a report by experts led by Jacques de Larosiere, but stops short of calling for a European Financial Services Authority; and seeks a reflation of the economy without proposing the development of an EU bond market in Euros. In my view it is equivalent to sending a fire risk consultant when what is needed is a fire tender, since the house is already on fire, but the Commission President defended it competently.

I suspect the EUR 20 billion reflation by the member states will prove inadequate and that the extra EUR 11.5 billion from the EU budget will not easily find the necessary agreement from national finance ministers. A true Keynesian package would involve heavy government investment in major infrastructure projects such as the renewable energy supergrid of which I write in my latest policy pamphlet, costing EUR 45 billion but saving EUR 250 billion over the next 40 years. I said this in a speech to the Club de l'Europe on Tuesday and in a briefing to francophone journalists yesterday.

The main media interest in Brussels this week is in the visit by the US Secretary of State Hilary Clinton. She met foreign ministers on Wednesday night, visited NATO yesterday and will address a conference of young people in the European Parliament today. Her visit paves the way for a visit by Barack Obama on 5 April (immediately after his visits to the G20 in London and to the NATO summit in Strasbourg). It is unclear yet whether he will come to the EP.

My Group received a boost this week with the announcement by Ireland's Fianna Fail party that they will apply for membership of the European Liberal Democrat and Reform (ELDR) Party and subsequently join our ranks in Parliament. And my campaign for President of Parliament was boosted by public backing from former EP President and leading Spanish socialist Josep Borrell (see my campaign website www.watsonforpresident.eu).

Resisting pressure from the European Commission to oblige countries to allow the sowing of GM maize, the 27 EU environment ministers voted by a wide margin this week to allow member states to keep a ban on GMOs if they choose. This is the fourth time they have done so and will no doubt be challenged in the WTO.

On Wednesday I hosted a conference to asses the impact of the 2004 EU enlargement to central and eastern Europe. Though there are plusses and minuses for the newcomers and the former members, the former far outweigh the latter, especially in terms of trade growth and job creation.

I welcomed to the European Parliament this week visitor's groups from Exmouth Community College and the Thomas Hardye School in Dorchester. Tomorrow I travel to Plymouth to speak first at the Devonport High School for Boys and then at the DHS for Girls. In this day and age I wonder if this is still a good way to educate our children? After other meetings in Plymouth I address the United Nations' Association at the University of Exeter (the Queens Bdg, 6.30 pm). Constituency engagements such as these mean I shall miss the LibDem Spring Conference in Harrogate, but my priorities will always lie with those I represent.

I 'll report again next week from Strasbourg.