EU on brink of historic budget cut after all-nighter in Brussels - by Nicholas Watt and Ian Traynor

European leaders were inching towards a deal in the early hours of Friday morning that would see the first cut in the EU's budget in its 56-year history.

David Cameron, who had demanded a freeze in real terms in the near-€1tn budget, was planning to claim victory after the European council president proposed a €34.4bn cut over the next seven years.
Herman Van Rompuy finally tabled his budget proposals in Brussels at 6am after a night of haggling at the EU summit that was described by one official as like a "bazaar".

Shortly before 6.30am, the EU's 27 leaders filed into the council chamber to debate Van Rompuy's proposal to cut the "payment ceiling", likened to a credit card limit, for the next seven-year budget from €942.8bn to €908.4bn. Van Rompuy proposed cutting the higher "commitment ceiling" from €993.6bn for the last budget from 2007-13 to €960bn for 2014-20.

Dalia Grybauskaite, the Lithuanian president who was the EU's budget commissioner during the last negotiations in 2005, indicated at around 4am that the EU was on the verge of agreeing its first budget cut. The EU has agreed seven-year budgets since 1993.

Read more: EU on brink of historic budget cut after all-nighter in Brussels | World news | The Guardian

EU leaders haggle over budget tightening - by Joshua Chaffin and Alex Barker

European Council Budget Meeting

EU leaders bargained deep into the early hours of Friday morning as they tried to reach agreement over how deeply to cut the bloc’s seven-year, trillion-euro budget.

More than 12 hours after the summit meeting was to have formally begun, the 27 heads of government were still waiting for Herman Van Rompuy, the European Council president, to present a formal proposal.

Instead, the leaders peeled off into various meetings – some with Mr Van Rompuy – to bargain.
At the heart of the dispute was a clash between British demands for a budget freeze compatible with the austerity sweeping national capitals and a French and Italian defence of more robust spending to counter the effects of recession.

Before the meeting, Mr Van Rompuy was planning to cut about €15bn from his most recent proposal, bringing it to €957bn for the period from 2014 to 2020.

Read more: EU leaders haggle over budget tightening - FT.com

Van Rompuy outlines plan for deeper European fiscal union - by Toby Vogel

Herman Van Rompuy, the president of the European Council, has outlined a three-stage process that he says will lead to “genuine economic and monetary union”.

In a paper published today (6 December), Van Rompuy concedes that plans for the direct recapitalisation of banks through the eurozone's bail-out fund, the European Stability Mechanism, have fallen behind schedule.

A row between France and Germany has delayed a decision to grant the European Central Bank the power to oversee banks in the eurozone, a first step towards allowing the ESM to provide capital to banks directly rather than going through national governments.

At their October summit, EU leaders called for a “legislative framework” for the single banking supervisor to be in place by 1 January. Acknowledging the delay, Van Rompuy's paper says it is imperative that “preparatory work can start in earnest at the beginning of 2013” so that the banking supervisor can start its operations from 1 January 2014.

Van Rompuy's report was co-signed by José Manuel Barroso, the president of the European Commission, Jean-Claude Juncker, the president of the Eurogroup of eurozone finance ministers, and Mario Draghi, the president of the European Central Bank. EU leaders will discuss the plan at their summit in Brussels next week (13-14 December).

Read more: Van Rompuy outlines plan for deeper fiscal union | European Voice

EU leaders say China's success of core interest to Europe

China's success came in accordance with Europe's core interest, said Herman Van Rompuy, president of the European Council on Friday.

The European Union (EU) should "take a step back and look at the long term" development in the relationship with China, said Van Rompuy at a press conference following the EU summit jointly with Jose Manuel Barroso, president of the European Commission.

"I debriefed the European Council on the recent Summit held in September with China," he said. "In a long term's perspective, it is in Europe's core interest that China succeeds," he added.

Van Rompuy said the EU would come back to the issue early next spring to best prepare for the next EU-China summit which will take place in China in Autumn 2013.

Read more: China's success of core interest to Europe: EU leaders - People's Daily Online

European Leaders Step Up Talks

European leaders were taking their shuttle diplomacy into the next round on Tuesday, as markets indicated their growing impatience with the ongoing sovereign debt crisis with a fresh cut to the European Union’s credit outlook.

Angela Merkel the German chancellor, met with Herman van Rompuy, the E.U. president, in Berlin. No details were released about the talks, which had been expected to focus on ideas proposed in June for how to weave the Union more tightly together as part of efforts to create structures for an economic and monetary union.

The problems facing the Greek government had also been expected to figure in their talks, as Europe awaited the latest report from representatives of the European Commission, the European Central Bank and the International Monetary Fund, known as the troika, on whether to release the latest installment of funding to Athens.

Mr. Van Rompuy is to meet later in the week with the Greek prime minister, Antonis Samaras, and the French president, François Hollande, both of whom were recently in Berlin.

By short-term, Mr. Draghi said the debt maturities would be between one year and three years, said one of the lawmakers, who spoke on condition of anonymity as the meeting was supposed to be private. 

Mr. Draghi’s comments appeared to be laying the groundwork for a much-anticipated announcement at the monthly policy meeting of the E.C.B. on Thursday. Purchases of short-term maturities could be a key way for the E.C.B. to respond to calls to help Italy and Spain control their borrowing costs.

Read more: European Leaders Step Up Talks - NYTimes.com

EU deal for Spain, Italy buoys markets but details sketchy

Economists and non-euro EU leaders cheered Friday's euro zone summit deal as a surprise “breakthrough” in efforts to preserve a stable currency, yet crucial details still need to be filled in.

With market expectations low ahead of the European Union summit, a deal that bolstered

confidence in the euro was wrenched after all-night talks between euro zone leaders, bringing swift relief to crisis-hit Italy and Spain.

The single currency leapt in value and bond yields tumbled as it appeared that politicians might finally have got ahead of the markets, though it remained to be seen for how long.

EU president Herman Van Rompuy hailed a “real breakthrough” in efforts to prevent future crises as the 17 euro zone members agreed to let the future European Stability Mechanism (ESM) recapitalise ailing banks directly.

Read more: EU deal for Spain, Italy buoys markets but details sketchy - Hindustan Times

EU Van Rompuy: S-Term Bank Recap Needed In Current Circumstances

The following statement was issued by the EU President Mr. Van Rompuy at the EU Summit in Frankfort Germany:

"At today's meeting, I informed the members of the European Council about the state of preparations of the Euro Summit that will take place later in the day. We discussed the situation and all leaders underlined their common resolve to do their utmost to overcome the crisis and to help face in a spirit of solidarity the challenges confronting the European Union and the Euro area.

The members of the European Council welcomed the consensus on measures to restore confidence in the banking sector reached by the Council (ECOFIN) on 22 October. The banking measures form part of a broader package, alongside the decisions to be taken by today's meeting of the Euro Summit, and are subject to its full approval. The Council (ECOFIN) will finalise the work and adopt the necessary follow up measures. The consensus concerns both the banks' short-term and longer-term needs. The overarching goal of the exercise is to foster confidence in the European banking sector.

Improved access of the banks' medium- and long-term funding is essential to avoid a credit crunch and to safeguard the flow of credit to the real economy. States will provide guarantees enabling banks to raise term funds. We decided to rely on a truly coordinated approach at EU level regarding the conditions and criteria.

Short term recapitalisation is needed in the current exceptional circumstances to create a temporary buffer allowing the banking system to withstand shocks in a reliable manner. Agreement has been reached that banks should be required, by 30 June 2012, to have 9 % of the highest quality capital. This figure should take into account a marking down for sovereign bond holdings against current market prices (as of 30 September 2011). Banks should raise capital in the first place from private sources, and only if that is not possible, seek support from national governments. If the latter support is not available without creating systemic risks for the Eurozone, the EFSF should provide the loans for recapitalisation.

Any form of public support, whether at a national or EU-level, will have to comply to the rules of the state aid crisis framework. The Commission has indicated it will be applied with the necessary proportionality in view of the systemic character of the crisis. With these measures, we restore confidence and put Europe's banking sector on a sound footing."

For more: EU Van Rompuy: S-Term Bank Recap Needed In Currnt Circumstnces | mninews.deutsche-boerse.com

Germany: Merkel: Countries will not be kicked out of eurozone but cash can be cut off

German Chancellor Angela Merkel has said that kicking countries out of the eurozone is excluded as an option, but that Greece must impose the austerity and restructuring measures that are a condition of the bail-out, or Athens will not receive its latest tranche of rescue funds.

EU Council President Herman Van Rompuy meanwhile has said that still further political pressure needs to be applied to Greece and Italy to slash their debt levels.

For more: EUobserver.com / Economic Affairs / Merkel: Countries will not be kicked out of eurozone

EU Council President Van Rompuy concerned at growing EU nationalism - by Arthur Beesley

EU Council President Herman Van Rompuy has expressed his concern about increasing nationalism in the EU, saying Euroscepticism was no longer “the monopoly” of a few countries.

In a speech last night in Berlin in which he argued against protectionist tendencies, he made the case that there were people in every member state who believed their own countries could survive alone in the globalised world.

“It is more than an illusion: it is a lie,” he said as he cited Franklin Roosevelt’s expression that the only thing to fear was fear itself.

Praising the “exceptional” role of German chancellor Angela Merkel in the debt crisis, he said the European authorities had more pressing matters to hand than to reopen the entire internal debate on the nature, the goal and the architecture of the union. Mr Van Rompuy also argued against recent proposals from European Commission chief José Manuel Barroso for the development of own-resource taxation by the EU institutions. Redesigning the way the EU secured its revenue was not a priority, he said.

For more: Van Rompuy concerned at growing EU nationalism - The Irish Times - Wed, Nov 10, 2010

US Nuclear Security Summit: EU President Herman van Rompuy - "every country should ratify 1980 convention on Physical Protection of Nuclear Materials"

President Barack Obama's Nuclear Security Summit is calling on all the 47 countries involved to cooperate in spreading global acceptance of an existing treaty that aims to crack down on potential nuclear terrorism.
The final documents from the two-day nuclear summit includes a statement from the United States that says the Obama administration has submitted to Congress legislation to bring U.S. laws into line with that treaty and one on the physical protection of nuclear materials.
Obama called the summit to focus world attention on keeping nuclear materials out of terrorist hands, what he termed the greatest threat facing all nations

Note EU-Digest: European Union President Herman van Rompuy called on all countries to sign and ratify the convention on the 1980 Physical Protection of Nuclear Material, which was amended in 2005 to require states to protect such materials even when not in transit.

"Nuclear terrorism... represents a most serious threat to international security with potentially devastating consequences to our societies," Van Rompuy said.

For more: Summit urges acceptance of nuke terrorism treaty - KansasCity.com

EU-President Van Rompuy tells Spanish daily El Pais: "Europeans must bite the bullet to improve economy"

European countries must bite the bullet and impose "unpopular" measures to save Europe's economic model, EU president Herman van Rompuy said in a newspaper interview published on Friday.  "The European model cannot survive without stronger economic growth and Europe cannot play a role in the world without a more robust economy," Van Rompuy told Spanish daily El Pais.

The European Union president denounced populist policies which he described as a "great danger."
He told El Pais: "Populism makes it difficult to take measures which will have to be adopted for the future of Europe. When I see the economic agenda, the budgetary challenges ... I see that we will be forced to take take unpopular measures in the next few years."

On that same note Diego López Garrido, the Spanish Secretary of State for the EU, said the Union is currently reviewing its foundations. He stressed that the leading future objective of the EU involves overhauling its "economic government/model" in order to overcome the current economic crisis, which is why European leaders are "so carefully studying and preparing" the Europe 2020 strategy.

"In response to the crisis, the EU is designing a somewhat "revolutionary" new economic government: Europe is looking to emerge from the crisis, to come up with a new growth model, establish better supervision of the financial system, and introduce regulation and tax co-ordination that has until now been non-existent in the financial system", he said.


EU-Digest

mediaforfreedom.com: For Europe's Triumvirate: Economic Challenges - by Rene Wadlow

For the complete report from the Media for Freedom click on this link

Both Van Rompuy and Baroness Ashton are strong but colorless individuals, trained in economics which is what the European Union is all about — the incarnation of the quip “It’s the economy, stupid.” Van Rompuy is an economist, the son of a well-known professor of economics. He is conservative but not dogmatic and will probably have some influence on long-range EU economic policy though short-term European economic policy is decided within the European Commission, where 21 of the 27 commissioners come from conservative national parties. There is not much likelihood of a clash. Baroness Ashton also has a university economics degree and was chosen to give a “socialist” balance to the most visible posts. However, her year as Commissioner for Trade gave no signs of radical economic policies.

The tasks of the European triumvirate are crucial. They do not require high profile personalities, but they do require more dynamic leadership than has been seen in the past. There is now a slightly renewed membership in the European Parliament and some new faces among the 27 commissioners. Will this be enough to move the EU policy forward? In presenting his guidelines for the next EU Commission, José Manuel Barroso said, “For Europe, this is a moment of truth. Europe has to answer a decisive question. Do we want to lead, shaping globalisation on the basis of our values and or interests – or will we leave the initiative to others and accept an outcome shaped by them? The alternatives are clear. A stark choice has to be made. Either Europeans accept to face this challenge together or else we slide towards irrelevance.”

nrc.nl - Don't underestimate the 'grey mouse' from Belgium - by Luuk van Middelaar

For the complete report from the nrc.nl click on this link

Losing to Belgium is always painful for the Dutch, whether in football or in politics. On Thursday night a Dutch TV news anchor gave voice to the hurt national pride when he said: "Why Van Rompuy and not Balkenende? How could this happen?" The Brussels correspondent offered that the EU leaders preferred someone "with a blank slate" to someone with "experience". Herman Van Rompuy had only been prime minister of Belgium for less than a year, whereas Balkenende is leading his fourth government in a row. The TV audience was reassured: our compatriot had simply been overqualified. The reality is that the Belgians once again demonstrated that they know how to play the European game down to their fingertips. First of all the Belgian media strategy was brilliant. Belgian editorials emphasised Van Rompuy's qualities as a statesman and pointed out Balkenende's shortcomings. The latter is in charge of an increasingly eurosceptic country, which voted against the European constitution, and he his leadership at home has been weak, it was said.

The Independent: Safe and boring – but the new EU line-up does the job -

For the complete report from The Independent click on this link

There was a lot wrong with how the European Union selected its new leaders, and the two individuals chosen as the faces and voices of Europe may have their defects. But there was not nearly as much wrong with either process or individuals as that very British convergence of Eurosceptics and Euro-idealists would have us believe. The EU, still a work in progress, is at a particular point in its evolution. The Lisbon Treaty is finally coming into force, after a rocky few years that included a rejected constitution, a repeat Irish referendum and a hold-out Czech President. The new President and High Representative provide a belated answer to the question supposedly posed by Henry Kissinger. Europe now has two phone numbers, which is a considerable improvement on 27.

Telegraph.co: Van Rompuy wants the EU to run on CO2 - by Christopher Booker

For the complete report from the Telegraph click on this link

Van Rompuy wants the EU to run on CO2 - by Christopher Booker

It would be wrong to underestimate Herman Van Rompuy, the first permament president of the European Council. This Belgian economist is a clever and ruthless political operator. Once, to win a political battle, he changed the locks to prevent his opponents entering a crucial meeting. (For details of his character, see the Brussels Journal blog by one of his former colleagues, Paul Belien.) And the reason why he was very much the preferred candidate of the European Commission is that the one thing for which President Van Rompuy can be relied on is a determination to use all his crafty skills to further the power of our new government in Brussels.

Bonne chance Cathy and Herman - by Rick Morren

EU-Digest

In the EU it's all a question of balance of power and the use of technocrats over politicians to manage the taxpayers money properly and honestly. Mr. Van Rompuy and Lady Ashton might be considered dull in the sense that they don't have the charisma of President Obama, but when it comes to experience, management skills and intelligence they are well qualified and stack up favorably against all the present "world" leaders.

One should also not try to compare the EU with any other political federal system in the world. There is no comparison. The EU is an ongoing democratic experiment of 27 nations with half a billion people and is probably the most daring human political endeavor ever attempted. Regardless of all the mistakes that have and are being made, the EU's economic, scientific, cultural, social, and political achievements far outweigh its failures. Maybe one of it's most important achievements so far has been that this Union of European Nations has ended the past ravaging wars between countries on the European continent which hampered any real form of progress for its people.

As Mr. Van Rompuy and Lady Ashton take on their new tasks we all hope they will make sure that the future development of the EU always remains in the hands of its citizens, even more so than it does today. In this context it is also important they guard against foreign influences or pressures, be it economic, social, cultural or political, getting a foothold on the European continent. Bonne chance Cathy and Herman !