Latest Bulletin:
October 2005

Mandelson: “my first priority is to open markets”
Bulletin 7- 16 November 2004

Main points:

1. Mandelson: “my first priority is to open markets”
New Commissioner calls for Government to stop trumpeting economic success

2. Business and unions clash over Directive on Services
New briefing available from Centre for a Social Europe

3. French Government to launch “information” campaign

Publicity for the Constitution will cost over €60m

4. EU in push for more nuclear power
Bidding underway for nuclear fusion station in France

5. New Commission line-up revealed by Barroso
New row breaks out over “freemason” Frattini

6. Poll shows clear anti-Constitution majority in UK
But largest group are “soft” opponents of the Constitution

1. Mandelson: “my first priority is to open markets”

Peter Mandelson gave his first speech as EU Commissioner-designate last week, and used the occasion to call for market liberalisation across the European Union. In the speech, at the CBI annual conference in Birmingham, Mandelson said, “My belief is that the first priority should be to reinvigorate the drive for open markets.” He argued that the new EU Commission must be a “jobs and growth Commission”, but that the best way to achieve these aims was to open markets up to competition – and he went out of his way to voice support for the new Directive on Services, which has been attacked by UK and European trade unions for undermining labour legislation.

Setting out his stall for his time in office, Mandelson made it clear that he wants to be a business-friendly Commissioner. He pledged to cut red tape and oppose new regulation that hampered business. He also argued that he would fight to stop European governments providing state support to businesses which struggle, while saying, “If market forces produce European champions, so much the better.”

Allies of Gordon Brown reacted angrily to Mandelson’s suggestion that eurosceptism in the UK is due to “excessive gloating” about Britain’s strong economic record. A Treasury source said, “When trust is such a big issue both here and across Europe, it does send out a strange signal by sending someone like him to be our man in Brussels”.

Peter Mandelson is engaging in double-speak if he thinks that market liberalisation will lead to new growth and jobs. Europe needs reform, but not reform that will leave workers without secure employment and decent levels of pay. The EU needs to adapt to the 21st century by engaging with the skills agenda and renewing its commitment to research and development, but it must also change the attitude of the ECB which continually bears down on inflation rather than allowing for growth.

2. Business and unions clash over Directive on Services

Business groups have stepped up their support for the EU’s controversial Directive on Services, as a parliamentary hearing in Brussels heard criticisms of the draft from a variety of sources.

Union representatives were heavily critical of the Directive’s potential effect on labour laws and health and safety legislation. Catelene Passchier, confederal secretary of the European Trade Union Confederation (ETUC), called the draft “seriously flawed”. She said, “A lot of elements of this Directive touch labour law in a very far-reaching way”, and that it threatened to undermine “the success of the European social model.”

The American Chamber of Commerce released a statement in advance of the hearing calling on member states “to make the speedy adoption of this Directive a central part of their efforts to achieve the objectives of the Lisbon Agenda”. It said the Directive “would lead to a huge reduction of costs for businesses functioning in Europe” and that “critics of specific provisions in the directive should keep in mind […] the potential it has to transform the European economy.”

The Directive aims to make cross-border investment in services within the EU easier for businesses, but has led to fears that labour standards could be undermined and that public services could also suffer.

The Centre for a Social Europe has published a new briefing on the Services Directive today, which can be found here

3. French Government to launch “information” campaign

The right-wing French Government has announced that it will spend €62million on holding a referendum on the proposed EU Constitution. This is almost €40million more than anticipated and will almost all be spent on publicity and information about the Constitution. The publicity push will see a four page leaflet sent to every household, a “user-guide” to the Constitution sent to thousands of opinion formers, a new website with information about the Constitution, and a series of information broadcasts about the Constitution. According to Agence France Presse, the publicity campaign will be paid for by tax-payers and the information will be written by Government civil servants.

Earlier in the year, the British Government committed to sending a full copy of the Constitution to every household for people to read, but has gone quiet on this pledge more recently. Denis MacShane also committed the Government to spending “serious money” promoting the EU Constitution earlier this year (Independent, 31 May 2004) and the Foreign Office recently produced 200,000 “information” pamphlets making the case for supporting the Constitution. This week also saw Britain in Europe, which last year received £2m from Government Minister Lord Sainsbury, complain that they were not managing to raise funds in the current climate.

The Government was right to call a referendum on the EU Constitution – voters should have the final say on such an important issue. However, the process will be meaningless if the rules are stacked in their favour. One way in which the Government could start to fight a fair fight would be to put the job of publicising the issues and publishing information in the hands of Parliament, as happens in Sweden. Separating information from Government propaganda would give voters the chance to listen to both sides of the argument as well as getting impartial advice. This was a key recommendation of the Neill Report into the conduct of the 1975 referendum but it has been ignored so far.

4. EU in push for more nuclear power

Last week, the European Commission came a step closer to winning the Contract to build a new breed of nuclear reactor. The reactor would rely on nuclear fusion – the reaction that takes place in stars – rather than nuclear fission, which powers current nuclear generators. The US and Japan withdrew their outright opposition to the reactor being situated in France, although they remain supportive of locating it in Rokkasho-Mura, in north-eastern Japan. The EU proposal is supported by China and Russia.

It emerged that this shift follows the promise of a deal, although it remains unclear exactly whether this included a financial incentive. “I cannot elaborate on the sweetener, but I think we have made reasonable offers”, said Commission spokesperson Fabio Fabbi.

Campaigners have complained about the large amount of funds being poured into this method of generation rather than other renewable sources. The cost of the project is an estimated €4.77billion, 40 percent of which will be paid by EU member states. It is unlikely that the facility will lead to the mass generation of energy before 2050.

5. New Commission line-up revealed by Barroso

The shape of the new European Commission has been announced by the President designate, José Manuel Barroso. Two Commissioners have resigned and been replaced: out goes Italian right-winger Rocco Buttiglione and Latvian green liberal Ingrida Udre, and in come the Latvian Andris Piebalgs, right-wing liberal, and Franco Frattini, an Italian conservative.

Piebalgs was forced to resign as Minister for Finance in the Latvian Government following a banking scandal. The scandal saw the collapse of Latvia’s largest bank Baltija Banka due to a combination of incompetence and corruption. He has been a diplomat and official in the EU since the late 1990s and his party, Latvia’s Way, currently has no representation in the Latvian Parliament.

Frattini is a long-term member of Silvio Berlusconi’s Forza Italia party. With a background as a lawyer, he first entered front-line politics as part of Lamberto Dini’s technocratic government. In 2002, Frattini was the author of a controversial law that allowed Prime Minister Berlusconi to keep his media empire and remain prime minister. Luciano Violante of the main opposition Left Democrats reacted to the legislation saying, “With this law, democracy has taken a dangerous turn. It doesn’t defend liberty or democracy.”

Following their hearings, the new Commission as a whole will be put to the European Parliament. The new line-up – the most right-wing Commission so far – is certain to be accepted by the Parliament as the party groups began to indicate that they will support them. Chris Davies, leader of the Lib Dem MEPs said this week that, “…only if [the new Commissioners] were to be exposed as convicted criminals, or something equally serious, should they be rejected.”

The new Commission is the most right-wing since the UK joined the EEC in 1973. Just six of the twenty-five Commissioners are on the left – and one of the six is Peter Mandelson. The reshuffle has removed the moral prejudice of Rocco Buttiglione but introduced two new economic right-wingers. The new Commission does not represent the people of Europe and should be rejected.

6. Poll shows clear anti-Constitution majority in UK

A new opinion poll for the Citibank group by pollsters MORI has highlighted how much of an uphill struggle the government has if it is to win a referendum on the EU Constitution. The regular poll showed that 8 percent of voters “strongly support” the UK ratifying the Constitution, with 27 percent “strongly opposed”. Such a large lead among voters who have already made their mind up on the issue could be a decisive factor in a referendum, as research shows the pro-change side needs a large lead going into the final stages to win a poll.

However, it would be wrong to say that the result of a referendum is anywhere near being a foregone conclusion. A clear 50 percent of voters said that they are “open to persuasion” on whether to sign the Constitution, with 22 percent erring in favour of signing and 28 percent leaning towards not signing. A strong Government-funded campaign could swing the waverers away from the anti-Constitution side if a long campaign is mounted. However, as the Government seems to be putting a Labour election win above the Constitution campaign, this doesn’t seem likely.

Voters were also against the UK joining the euro by a margin of 60-27, even if the Government were to “strongly urge” that we join. The poll also shows that people on lower incomes are more against than richer people, although all income groups showed a clear anti-euro majority.


...making the progressive case for EU reform