Margarida Vasconcelos

There is widespread opinion that a financial transaction tax (FTT) won’t stabilise the markets and it would undermine economic growth. According to Barclays the FTT could cut EU GDP by 0.3%. Moreover, according to the City of London Corporation if the FTT is introduced there would be an increase on the cost of funds for corporations and such impact “is greater for non-participating Member States than participating Member States…”. Furthermore, the governments’ costs of funds it will also increase. The FTT’s costs on UK government debt have been estimated at £3.95 billion. As noted by Dr Kay Swinburne MEP, European Conservatives and Reformists group economics spokesman, “… a FTT will lead to job losses, slow growth, and businesses leaving the EU altogether.” The FTT would increase borrowing costs and would distort competition in the Single Market. And, on top of that, it is illegal too.

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Last June, after several trilogue meetings, the Presidency of the Council of the European Union, the President of the European Parliament, and the President of the European Commission reached a political agreement on the next Multi-annual Financial Framework for 2014-2020. The European Parliament approved the compromise deal in July but the Multi-annual Financial Framework for 2014-2020 still has to be formally adopted by the Council of Ministers and by the European Parliament. Under the Lisbon Treaty, the European Commission is required to present the draft budget for the following year before the 1 July. Hence, the European Commission drafted the 2014 budget taking into account the latest negotiations on the MFF.

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The European Commission has recently decided to claim back a total of €180 million of EU agricultural policy funds unduly spent by Member States. The member states are responsible for paying out and checking expenditure under the CAP. The Commission verifies, under the conformity clearance procedure, whether the Member States have made correct use of the funds. In fact, the European Commission carries out, every year, audits aiming at verifying whether Member State controls and responses to shortcomings are enough. It has therefore the power to claw back funds when audits show that the funds have not been spent properly.

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Last June, after several trilogue meetings, the Presidency of the Council of the European Union, the President of the European Parliament, and the President of the European Commission reached a political agreement on the next Multi-annual Financial Framework for 2014-2020. The European Parliament approved the compromise deal in July but the Multi-annual Financial Framework for 2014-2020 still has to be formally adopted by the Council of Ministers and by the European Parliament. Under the Lisbon Treaty, the European Commission is required the draft budget for the following year before the 1 July. Hence, the European Commission drafted the 2014 budget taking into account the latest negotiations on the MFF.

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The European Court of Auditors has recently published a special report entitled “Have the Marco Polo programmes been effective in shifting traffic off the road?” The purpose of the audit was to assess whether the funded projects were effective, and, particularly, to assess whether the European Commission had planned, managed and supervised the projects in order to maximise their effectiveness. The Court concluded that the Marco Polo programmes were not effective. This report, as previous ECA’s reports, shows that EU funds are not effective in helping to achieve EU policies objectives and reveals that EU taxpayers’ money is not being properly spent. In fact, this is another ECA’s report that shows the EU budget wastes millions of taxpayer’s money.

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The euro debt crisis is far from over and it is getting worse by the day. Yet, when, in 2010, Greece asked, for the first time, for a bailout, we were told it wouldn’t happen again. Three years after the Greek tragedy the eurozone crisis has escalated. First Greece, then Ireland, Portugal, Cyprus and Brussels has not learned the lesson yet, and continue to pursue its failed policies.

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After several trilogue meetings, on 27 June, the Presidency of the Council of the
European Union, the President of the European Parliament, and the President of the European Commission reached a political agreement on the next Multi-annual Financial Framework for 2014-2020. This meeting was convened by Mr Barroso in a last attempt to reach a compromise deal before the summer break. The compromise deal on the draft regulation laying down the EU's multiannual financial framework (MFF) for 2014-2020 and the interinstitutional agreement (IIA) on budgetary discipline and sound financial management were approved by COREPER on 28 June and then endorsed by the European Council which called for the rapid formal adoption of these documents.

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The European Foundation published in February 2011 a paper entitled, “European Union hypocrisy over Egyptian regime – the discrepancy between generous EU funding and demands for democratisation”, where we stressed that the EU has never had a proper strategy on the region. We noted, “The European Union has supplied extraordinary amounts of funding without any sufficient democratic measures attached.” The EU has proved to be unable to demand reforms from its southern neighbours, and, in the meantime, taxpayers’ money has already been spent, and continuous to be spent, in projects that provided little in the way of democratic progress. The conditioning economic aid to political reform has been unsatisfactory. We noted, “The EU has introduced several explicit conditionality elements into its policy towards Egypt, which have been incoherently applied. The Egyptian government has never fulfilled its commitments to political reform.” In fact, “The European Commission reports have mentioned the slow progress and the reluctance of the Egyptian government to commit to serious political reforms, there was little progress with regards to democracy, human rights and the independence of the judiciary.”
The Commission said, two years ago, that any future EU aid to the democratic transformation processes shall have strong conditions attached and insisted upon. However, nothing has changed so far.

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Following an agreement reached with the European Parliament, the Council, as expected, has recently formally adopted the proposals amending the EU's rules on capital requirements for banks and investment firms, the so called revised capital requirements rules (CRD IV), intended to transpose into EU law the Basel 3 agreement. The Council’s decision was taken by QM, the UK voted against it. Hence, the cap on bankers’ bonuses will be introduced despite UK’s opposition. The European Parliament has already rubber stamp the political agreement during the April plenary session. Consequently, the legislative package soon will be published in the EU Official Journals and enter into force. The new rules will apply from 1 January 2014.

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Last March, the Commission requested formal authorisation from the Council to open negotiations for Transatlantic Trade and Investment Partnership with the United States (TTIP), the so called "negotiating directives", which set out the general objectives to be achieved with the agreement. According to the European Commission if the Transatlantic Trade and Investment Partnership with the United States (TTIP) goes beyond tariff barriers and harmonising standards on goods and services it could generate around €100 billion per year, however it would be worth just around €25 billion if it covers just tariffs. The Centre for Economic Policy Research (CEPR), has also estimated that a Free Trade Agreement with the US could worth up to €119 billion a year if it goes beyond tariff barriers. It has also been estimated that it could worth £10 billion just to the UK. France, from the outset, has made clear that it would veto any agreement on the EU mandate for a FTA with US unless the audiovisual sector is excluded from the scope of the negotiations.

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