Thursday, 8 December 2011

Eurozone politics

This week I have been in negotiations on bank deposit schemes (where France and Italy disagree with Germany), on mortgage agreements (where Spain disagrees with Italy and Netherlands) on energy efficiency measures (where Finland disagrees with Germany and they both disagree with France), Eurozone countries even disagree about how chickens lay eggs. The crisis may lead the Eurozone to share decisions on National deficits and debts, perhaps they will allow the ECB to transfer bad debts from banks to governments, possibly even to guaranteeing each others debts, but it seems very unlikely they would agree to vote as a block on EU legislation.

Thursday, 1 December 2011

Fiddling whilst Rome can't Borrow

Here is my speech from last nights European Parliament meeting.

Last week Germany could not sell one third of its bond issue, yesterday the Italian Government paid nearly 8% interest and today two million people are striking in Britain even though the UK public pension black hole is the biggest in Europe. Right now this Parliament and every parliament should be looking at how to help growth, remove red tape and get businesses moving, but instead we have been in back rooms arguing about just when an economic dialogue would fit into Parliament’s timetable and who should be on the guest list.

Of course countries should consider how their economic policies affect others, but MEPs are now asking for a new treaty to give the European Parliament a vote on economic guidelines. This will not decrease the resentment of many of our citizens when they see decisions being taken in faraway places, and it will not help our businesses to grow. Members, we really must stop fiddling whilst Rome cannot borrow!

It was late but there were almost more than the usual handful of MEPs in the room. A the end of the speech I was applauded by members of MEPs from Europe's largest centre right party the EPP, but Othmar Karas pulled me a sad smile from their front bench. He knows just how hard we have been working together in the back room negotiations to tone down the language of deficit deniers from the left. I can't support the final report but its much less bad than it could have been. I knew Othmar agreed with much of what I said about unlocking bureaucracy, helping growth. Thats where we really need to work together. If you want to see the videos or speeches there are all here

A week in the life of...

Last week I was asked to keep a diary for a website called Public Service Europe (probably funded through EU budget propaganda). To be honest the beginning of the week was so busy I didn't have time to spend a penny let alone type up my days, so Sunday was catch up day.

If you are interested in what an MEP does hereit is! Though I have noticed that they edited out my entire Monday morning meeting in Ipswich with Ben Gummer MP where we were trying to help sort out the waterfront development mess in Ipswich which is tied up with the Irish banking crisis. We were meeting the receivers, the local council and those from Dublin responsible for "managing" the bad bank assets. Typical Brussels to edit away the real bad news.

The Conservative MEP questions commissioners, meets banks and businesses and interviews for a new assistant – before treating her daughter to a performance of the Spanish Riding School of Vienna


On the way to Brussels I read through the commission's latest proposals for a new regulation on offshore oil safety. I took on the role of drafting a report for the European Parliament on offshore oil drilling after the Gulf of Mexico disaster. It's vital to the United Kingdom, which has more offshore oil than the rest of the EU put together. The new proposed law leaves me with many questions, not least: will it result in having to dumb down the UK's own safety legislation? This week the commissioners have annual hearings with MEPs on upcoming legislation and I want to quiz energy commissioner Günther Oettinger on this.

I arrive in Brussels at 6pm, to meet Westminster MPs Chris Heaton Harris, George Eustace and Andrea Leadsom. They are looking at suggestions for EU reform and I wanted them to be up to date on the parliament's suggestion for improving" economic co-ordination. Basically this would involve the parliament having a vote on economic guidelines for member states. I think it would be a disaster. As a result of the eurozone crisis, countries have now agreed to share information on budgets between different national governments. There has already been great resentment, for example when the Irish people learnt that German lawmakers had seen the country's budget before Irish MPs. Giving the parliament a vote which might directly influence the economic policies and decisions of individual nations would risk even greater resentment.

I also told the MPs about the upcoming negotiations on EU research funding which is critical to many scientists and businesses in the UK. Over dinner we were joined by cabinet minister Francis Maude and many other British MEPs. It was a feisty discussion. Some of us pointed out that it is not only the UK which is concerned about the impact of many EU regulations on businesses and growth.


At 8am I was joined by Patrick Jones, a research scientist in bio-fuels from Finland. He is going to shadow me for the next two days as part of an exchange program between scientists and MEPs. I had invited Douglas Flint CBE, chairman of HSBC, to breakfast with a group of MEPs and the turnout was good. We have leading MEPs from four different political groups: three from the centre-right European People's Party, as well as the Liberals and Greens and our own European Conservatives and Reformists. Douglas urged us to look beyond the eurozone crisis and economic malaise, and to understand the risk that Europe and smaller European banks could become uninvestable. Chinese investors, he said, see Europe as a fundamentally easier place to invest than the United States, for example, but they also see the inability to take political decisions as a major downside. We need to look at how to encourage long term investors to invest in infrastructure. One MEP asked if Europe over-regulates. The answer is immediate: the burden of bureaucracy on businesses is too high. I asked the other political groups whether they would support us in a campaign focusing on reducing the burden of regulation. I learnt that "deregulation" is a toxic phrase in certain countries where it is linked with the financial crash, but that there is support for cutting bureaucracy and reducing red tape. We agreed to propose a major drive on this. If we can achieve cross-party consensus there may be a real opportunity.

Following a meeting of industry, research and energy committee, which was debating long-term investment in infrastructure, I met Lloyds Bank, the European Association of Co-operative Banks and representatives from the Loan Market Association to discuss different details of new regulations on bank capital, lending and liquidity. I try to agree to meet as many businesses, consumer groups or regulators who contact me as possible, and of course I disclose all these meetings. Each of these organisations' concerns is quite technical, but could have a significant impact on lending to companies and mortgages. At the moment I am in listening and questioning mode. Some of the lenders or their borrower clients may have a reasonable point, but I am sceptical about others.

At midday I broke from meetings to go to a lunch organised by the European Parkinson's Disease Association. We heard first-hand from younger patients of their experiences living with the disease, and from a Dutch doctor about how their reorganisation of specialists has helped. I asked what their thoughts are on how the European Court of Justice's recent ban on patenting discoveries from stem cells could affect future treatments. We were told that research into new treatments is vital as is access to current ones. Then, I grabbed a coffee with Paul Laffin from our East of England office to discuss the 2012 Olympics. Not all the events are happening in London: canoeing and mountain biking will be in Hertfordshire and Essex so I've recently been to visit the sites. We want to arrange a reception showcasing the non-London venues next year and hopefully find some partner projects in different parts of Europe to help with the legacy.

By 3pm it was time for MEPs to quiz Barnier in the Economic Affairs Committee. I asked him why his proposals for bank capital are set as maximum levels across the EU not minimums. He implied this was a UK concern – but given that the head of the European Central Bank, the previous head, and the European Systemic Risk Board are all warning against his approach I believe this should be even more of a concern to those in the eurozone than those outside. But I don't think he got my point, and he certainly didn't answer the question adequately. His announcement that he would review whether to introduce a split between retail and investment banks, as the UK is considering, sent all the journalists scribbling.

After a 5pm meeting with Santander, I headed with Patrick the scientist to dinner with the European Energy Forum. Before dinner, oil giants ENI and Total talked to me about the offshore oil proposals. They worry that the European Union safety standard focusing on 'major hazards' is going to be lower than the UK's 'as low as reasonably practicable' standard. It's not often that industry worry that laws are not strong enough. Over dinner the president of GDF Suez told the audience how gas can help Europe reduce carbon emissions by 80 per cent. Patrick whispered in my ear to question where the numbers come from, and we worked out that half the saving is proposed to come from carbon capture and storage. Given that investors have recently been questioning North Sea proposals for underground CO2 storage I am concerned that this may not be realistic.


Wednesday involved interviewing potential new assistants, as my current economics assistant is moving off to work for an insurance company. After voting in the industry committee I went to a meeting with a German Liberal MEP and the European Commission on financial prospectuses. Last year we had agreed that smaller companies should not need to produce so much information when trying to get their shares listed. It was part of an effort to reduce bureaucracy for businesses that can often spend hundreds of thousands of pounds on legal fees for a flotation – but the political agreement risks being de-railed by 'experts' who are suggesting that small and large companies should be equal. I wonder how many of those so-called experts are the lawyers and not the companies or investors. We made some suggested changes and agreed to stay in touch. Later, Investor AB came for a meeting. They are one of Sweden's biggest long term strategic investors in companies and are concerned by the proposal that non-execs should never sit on more than four company boards. Sometimes they want to place somebody with expertise on more companies. We discuss potential amendments which might benefit long-term investors.

At 3pm, Oettinger came for his annual public hearing on energy with MEPs. I asked him whether his proposal for oil regulation was really meant to be a maximum standard for safety, or if individual member states would be free to set higher standards. He said it's just meant to be a minimum, which is interesting, since the commission has written it as a maximum harmonisation 'regulation' not a minimum level 'directive'. I immediately notified the UK negotiators in the European Council who will be looking at the implications for UK oil security.

Commissioner Olli Rehn is the economic affairs expert and his hearing was next. I asked him about the UK, pointing out that our annual deficit between spending and income is double that of the eurozone and more than double that of Italy. I reminded him that the UK is the second largest net contributor to the EU budget and has contributed roughly 5 per cent to the eurozone bailouts so far, despite not being a member. "Commissioner", I said, "is the UK being selfish?" The entire room laughed, as the accusation by a German MP of the UK's selfish nature was front page headlines last week. Many MEPs from other countries nag us when we ask to reduce the budget, and they try to demand the UK puts in more. I don't think the UK can afford to continue this level of contributions, so it's important to lay down some markers. Rehn certainly didn't accuse the UK of being selfish and indeed offered his gratitude.

Then I raced into a meeting of European ceramics manufacturers, a crowded room with over 100 delegates. Ceramics is an energy intensive business and they are concerned about upcoming legislation on energy efficiency. I described some of the 1800 proposed amendments, including ones by my office on reducing some of the energy audit bureaucracy: each of these companies monitor energy very closely, it is their largest cost, and they don't need a public audit statement to encourage them to save energy. As with much EU legislation this one starts with helpful intentions. But the top down one size fits all approach has raised concerns from industry, public authorities and consumer groups.


In the morning I visited the Red Balloon charity which works to help children and teenagers who have dropped out of school due to bullying. Carrie Herbert set up the first school fifteen years ago and now has 10 across the country. It is incredibly moving. Teenagers come to them often in deepest depression and within a year of counseling and teaching are usually back into main stream schooling. With youth unemployment such a top priority it was great to see a project that really can turn lives around. Carrie explained that it's relatively easy to raise money to build the schools but much more difficult to get ongoing revenue funding. I can't understand why these schools can't qualify for the government free school program and have promised to write letters of support.

At the office just outside Cambridge I interview three more candidates for the assistant role. I then went with my assistant Jess Cole to meet Professor Austin Smith at the Wellcome Trust Centre for Stem Cell Research in Cambridge. He is one of the world's leading stem cell researchers. I have seen letters in erudite publications from Austin and many of his colleagues around the world worrying about the ECJ ruling but none of them had written to MEPs on the research committee. The ruling is based on a piece of EU legislation that dates back to the 1990s when stem cell research was in its early days. Austin spoke about the trials that are now happening to cure blindness and the project he is working on for early onset diabetes. I offered that if he wanted to bring colleagues from across the field to Brussels I would see if MEPs would come and listen to what he has to say. I think they should understand the consequences of this ruling, and what it might mean for medical research. I don't believe that membership of the single market should mean that all countries must have identical ethical positions on issues like this. If the underlying law is unclear then politicians should look at clarifying it, not leave lawyers and judges to make far reaching judgements based on outdated legislation.

On the way home I picked my daughter Lizzie up from school and we went to the iconic Fitzbillies tea shop in Cambridge. Lizzie's godmother Lucie has always worked in local government, but she and her cookery writer partner Lucas have long dreamed of running their own food shop. Lucie was spending a week learning the ropes pouring tea and making cakes. We discussed the difficulties of setting up a new business. The new owners of Fitzbillies have taken a loss making shop and hopefully turned it profitable – if they can make it work in this economic environment they must be doing something right.

On Thursday nights, if I can, I try to get to rehearsals with my local choir. I usually make about every third or fourth rehearsal and this was a lucky week. Singing forces me to switch everything else off. We are working towards our Christmas carol concert with lots of old favourites and some new challenges.


I usually spend Fridays visiting companies or other groups across the east of England but this week I had set it aside. I signed a mountain of Christmas cards, worked through some of my emails and decided to offer the job to the one candidate whose eyes lit up with glee at the idea of piles of complicated legal documents. At lunchtime I disappeared for an hour of riding across the beautiful north Essex countryside. I've been trying to do this about once a month or so and feel so much fitter. In the evening I collected Lizzie from school with two of her friends; she has just had a birthday so for a treat we headed to Wembley Arena where we were joined by family. The show was the Spanish Riding School of Vienna who visit the UK just every five years. Not everyone is into horses dancing to music but the moves date back nearly 500 years and it is breathtakingly beautiful. As an added bonus we were treated to displays by Carl Hester, who has recently been in the UK's world champion equestrian team and Lee Pearson, nine times Paralympic gold medallist – great work by Team GB to get us all excited for 2012.


Today was a very quiet day as we were shattered. We had planned to go to see the thousands of swans that migrate to Welney in Norfolk, but the warm weather means the Bewick swans have not really started to arrive from Russia yet so we will leave it a couple of weeks. Instead I went to Newmarket racecourse to the Christmas craft sale in aid of Macmillan Cancer Support. As parliament doesn't break up until December 23, it was great to make a start on some Christmas shopping and see some friends. I came home armed with gadgets for godsons, a special widget to help find my brother's permanently lost car keys and slip-on studs which I hope might stop my stepfather slipping on the ice.


After a brief respite to read the Sunday papers, today was spent taking my daughter for a ride and ferrying my sons to birthday parties. Then, a family supper, which is usually the time of the week we all manage to sit down together in relative peace: I have to catch the Eurostar tomorrow, when it all starts again.