Saturday, 29 November 2008

SNP quiz night in Forth

I was up in Forth last night at the Royal British Legion Club for a quiz night organised by my own local branch, the Wallace Branch, and assisted by Carluke. I met up with Aileen Campbell MSP and other members of the Clydesdale CA and although my team didn't win, we still managed to raise £240 for election funds. It was a good night so a big thanks to all those who helped organise it.

Wednesday, 26 November 2008

The EU's economic stimulus package - will it work?

With the worsening economic and financial crisis the EU finally published its response today with its European economic recovery plan. I've not yet had the chance to go through all the details of what the Commission is proposing but its clear that this is not a one size fits all- it couldn't possibly be given the differences between Member States in terms of their budgetary and economic situations and outlook and their exposure to the current economic and financial crisis.

Top line is the fiscal stimulus of 200 billion euro (1.5% EU GDP). Most of the money will come from national budgets, with EU Member States asked to contribute 170 billion euro (1.2% of EU's GDP). The rest -around 30 billion euro or 0.3% of EU GDP would come from the EU's own budget and the European Investment Bank.

The recovery plan is based on short-term measures to boost demand, protect jobs and restore consumer and business confidence. It aims to drive a coordinated EU response to the economic crisis and builds on the coordinated EU response to the financial crisis.

The Recovery Plan combines coordinated national action with a number of EU policy measures that have already been adopted by some national governments. There are 10 priority initiative measures:
(1) increased support for the unemployed and the poorest households, which have been hit hardest by the economic slowdown, by launching an employment support initiative through the European Social Fund and the Globalisation Adjustment Fund, increasing efforts to develop skills.
(2) Creating demand for labour by adopting temporary VAT cuts across the whole economy and lowering taxes on labour, in particular VAT on 'labour-intensive' sectors such as hairdressers and restaurants. There are also suggestions for reduced social charges on lower incomes to promote the employability of lower skilled workers but since taxation is a matter for member states the Commission makes it clear that it is up to Member States to decide whether or not they wish to take up any of these suggestions.
3) Improving access to finance for business (e.g. the European Investment Bank has already significantly increased its loans of 30 billion euro to SMEs and the Commission is planning a simplification package to speed up its decision-making on state aid, as well as temporarily, giving member states greater room for manoeuvre in granting companies loans)
4) Reducing administrative burdens and promoting entrepreneurship (including by removing the requirement on micro-enterprises to prepare annual accounts, facilitating access to public contracts and ensuring that public authorities pay invoices within one month);
5) Increasing investment to modernise Europe's infrastructure (in particular, an additional 5 billion euro in funding for trans-European energy interconnections and networks and broadband infrastructure projects, as well as the launch of a 500 million euro call for proposals for trans-European transport (TEN-T) projects)
6) Improving energy efficiency in buildings;
7) Promoting the rapid take up of “green products” (the Commission will propose reduced VAT rates for green products and services, related in particular to the building sector)
8) Increasing investment in R&D, innovation and education;
9) Developing clean technologies for cars and construction (through public-private partnerships for green cars - with total funding of at least €5 billion - energy efficient buildings - the estimated funding for this partnership is €1 billion - and “factories of the future” - with funding of €1.2 billion); and
10) Developing high speed internet for all.

Member States are also to be given greater flexibility in managing their budget deficits with the temporary relaxation of the stability and growth pact's 3% of GDP ceiling on budget deficits. The pact is supposed to ensure fiscal discipline is maintained and enforced across the eurozone and non-eurozone countries. But key to this economic recovery plan is that it is very much an attempt by the EU to get Member States to coordinate the various actions they are taking to combat the economic downturn and stimulate the EU economy. Ensuring there is a coordinated European response is all pretty much what the Commission can do given that most of the policy levers for dealing with the economic and financial crisis remain the competence of national governments.

The plan is a step in the right direction. Indeed, many of the EU policy measures suggested will be of benefit to Scotland and I will be interested to see further details about this additional 5 billion euro for funding energy and broadband infrastructure. However, first we have to see the reaction of EU finance ministers, then the EU leaders when they meet in Brussels on 11-12 December. Then we will have to how it will be implemented by the Member States and the extent to which it can help Europe's economies get back on track in terms of long-term growth and ensure Europe retains its competitiveness vis-a-vis the rest of the world.

Monday, 24 November 2008


If you are interested in following any of the discussions that are now underway on the future shape of Europe's agriculture, it is worth logging on to a new website that has just been launched by the Institute for European Environment Policy called "CAP 2020". This is providing various policy briefings and other info setting out what the thinking is on the future of the CAP in the Agriculture ministries of each of the 27 EU Member States.

Thursday, 20 November 2008

A good result for Scotland

With the EP having sent its view to the Council yesterday it was now the turn of EU farm ministers meeting in Brussels today to reach a final political agreement on the CAP health check.

The deal finally reached was welcomed by Scotland’s Rural Affairs Cabinet Secretary, Richard Lochhead MSP who was at the talks. In a press release he stated that this was a good deal for Scottish agriculture because “on key issues our voice has been heard loud and clear given that we have retained the freedom to deliver policies tailored to our needs. "It is in Scotland's interests to have a European farming policy that supports sustainable production rather than over-production and in that context the CAP Health Check moves in the right direction". The deal was also supported by Scotland's National Farmers Union with key issues resolved concerning the continued operation of the Scottish beef calf scheme and the disparity between Scottish and EU rates of modulation being significantly reduced.

In a press release on the DEFRA website the UK Government states that it could not support the final Health check deal because “it allows unused funding from the Single Farm Payment budget to be used to fund payments coupled to production, rather than being returned to the Member States, and because it creates short-term competitive distortions and uncertainity in the dairy sector from a range of measures, particularly through different increases in milk quotas for some Member States and unnecessary reviews of the phase-out process”.

London was also “disappointed that the Health Check was unable to go further in reforming the CAP, and we are concerned about the market distortions created by the increased flexibility in the use of `national envelopes’ which allow Member States to reintroduce production-coupled payments to support specific farming sectors”.

The UK government has already set out its stall on the future CAP reform backing a position that wants to see the phasing out of spending in pillar 1 with payments under a reshaped pillar 2 of CAP focusing on delivering environmental benefits that the market wouldn’t otherwise deliver.

Detailed implementing regulations will be drawn up by the Commission in 2009 with most of the provisions entering into force as of 2010. While the implementation of the CAP health check now passes back home, the discussions for the real reform of the CAP post-2013 are getting underway and we need to ensure that Scotland's farming and rural interests are very much central to any future shape of the European agricultural model and that is something which we will be working hard to do.

Wednesday, 19 November 2008

Outcome of EP vote on CAP health check

MEPs today gave their backing to the CAP health check. While the SNP backed the compromise deal that was eventually reached by the Parliament’s political groups, it was very much a “lukewarm thumbs up” from us.

All our amendments which passed the Agriculture Committee vote last month got through today and were incorporated into the Parliament’s position. These concern provisions on voluntary modulation, which will provide some clarity to how modulation will impact on Scotland’s farmers, making set aside a normal entitlement, including sheep, beef and goat payments in a single payment scheme by 2010 and establishing the principle that no adjustments in modulation must lead to lower general rural development funding. However, all our amendments on decoupling for sheep and beef and on deleting progressive modulation, as well as on retaining cross compliance as a tool against wildlife crime were lost.

So what was agreed by the EP?

Modulation: the Commission is proposing to amend the modulation rate from its current 5% to 13% by 2013. The EP wants the rate to increase to only 7% by 2013. MEPs want farmers who receive subsidies of less than 10,000 euro per annum to be exempt from modulation, which currently applies to all farmers who receive more than 5,000 euro. MEPs also want to see the extra funding that is released from the increase in modulation be used to finance more challenges than those identified by the Commission (climate change, renewable energy, water management and biodiversity) and that this money shouldn’t be co-financed by national budgets as is currently the case for rural development programmes.

Dairy: The Commission is proposing to increase Member States’ milk quotas by 1% per marketing year until 2013-2014. Ceilings are to be abolished completely in 2015. The EP agreed to a 1% annual increase in quotas until 2013-2014, but asked the Commission if the situation could be reviewed in 2010 and for new proposals to be made before the end of the quotas if necessary, i.e. before they are abolished. MEPs also called for the creation of a milk fund to help restructure the sector.

Decoupling: EP amendments mean that coupled aid (linked to production) will be retained until the end of 2012 in sectors such as fodder, protein, flax as well as sheep and beef sectors and the tobacco sector.

Support for hard-hit sectors, insurance and market intervention: Other amendments adopted would allow Member States to use up to 15% of Community funding they receive to support hard-hit sectors such as livestock and dairy farming and to contribute to insurance and mutual schemes (Article 68 support).

Monday, 17 November 2008

Iceland to apply for EU membership in 2009?

With the collapse of the Icelandic banking system there has been much discussion in the Icelandic press as well as our own as to whether the Icelandic government will lodge a formal application next year to join the EU possibly in 2011 and adopt the euro. Many Icelanders believe that that the financial crisis could at least have been alleviated had Iceland been in the EU and part of the eurozone. A survey published at the end of October showed that 68.8% of Iceland’s population would like to see their country joining the EU (compared with 55.1% in February). A previous poll carried out just before the start of the financial crisis showed that 49% of Iceland’s population supported EU membership with 27% against and 24% undecided.

At the end of last week the Icelandic Prime Minister Geir Haarde, who leads the centre-right Independence party which is opposed to EU membership, announced he was setting up a special commission to investigate the benefits of Iceland joining the EU. It will report back to the party’s annual congress which has been brought forward from October 2009 to January 2009 and it will then be for the Prime Minister to take a decision.

While this commission will undoubtedly be looking at the implications of different EU policy areas for Iceland such as fisheries, regional policy, energy, the single biggest stumbling block to Iceland’s membership of the EU remains the common fisheries policy as presently constituted.

Reform of the CFP is due to get underway early next year with the Commission’s publication of a public consultation (Green paper) in February and a legislative proposal on the reform of the common organization of the market is expected in October 2009.

The Commission is already making supportive noises saying that it would warmly welcome such a move and noting that Iceland has already implemented perhaps two-thirds of the acquis communitaire as a member of the European Economic Area. However, with the possibility of Iceland seeking to join the EU the need for the CFP to be radically reformed becomes all the more urgent.

What will be interesting to see is whether any possible EU membership application from Iceland encourages Norway to consider joining Iceland in applying for membership? If that happens, what then will become of the EEA?

Friday, 14 November 2008

Europe's energy security and what it means for Scotland

Implications for Scotland

Green Paper on Energy Networks

Of particular interest to Scotland is the publication of a Green Paper on Energy Networks. This sets out 6 priority infrastructure projects for the EU, including a Blueprint for a North Sea Offshore Grid to interconnect national electricity grids in northwest Europe and planned offshore renewables projects. This will be issued in 2009 with steps and timetables for interconnecting the various planned offshore projects.

It also proposes a future European Supergrid of which the North Sea Grid would form a key building block.

A number of other proposals are made for the development of EU-wide energy networks, building on the existing Trans-European Energy Networks (TEN-E) approach and increasing funding and leverage through the role of the EIB, Structural Funds, and the new Energy Security and Infrastructure Instrument, which is to replace the current TEN-E budget and is limited at only 22 million euro per year.

It recognises the 'significant role' of offshore wind in delivering renewable energy targets, as well as improving security of supply and solidarity.

The paper also suggests that the EU needs to consider how it will promote investment in EU-wide transportation and storage infrastructure for CO2 as part of CCS, possibly through widening the scope of TEN-E.

The paper highlights the important role of research, planning and coordination in delivering the infrastructure at the EU level, and reinforces the role of the EU offshore wind Grid Coordinator, the EU Industrial Initiative on Electricity Grids, and the forthcoming Knowledge and Innovation Communities for sustainable energy.

Finally, it calls for a new approach to planning, suggesting that EU priority projects could be included in national strategic plans and in the future priorities of regulators such as Ofgem and system operators. The public consultation is open for views until 31 March 2009.

Communication on Offshore Wind Energy

This sets out the significant potential for the development of offshore wind resources to meet the EU's 2020 targets, and points out some of the barriers to its development (including grid integration). The paper recognises that there is significant capacity for expansion of offshore wind in the North Sea. It suggests that offshore wind could represent more than 30% of electricity production from renewable sources by 2020.

It sets out the Commission's view of the way forward, including on research, where greater significance will be given to offshore wind in the Strategic Energy Technology Plan, FP7 and Intelligent Energy Europe.

It also calls on Member States with offshore resources to adopt National Action Plans that would spell out the expected contribution of offshore wind to the 2020 target and to implement maritime spatial planning, including proper designation of marine protected areas under the Birds and Habitats directives.

Finally, it says that the large scale integration of offshore wind in the electricity grids should be one of the key issues for follow-up to the green paper on networks.

View of the Scottish Government

The Scottish Government has also welcomed the publication of the Commission's Strategic Energy Review which identifies a North Sea Offshore Grid as an infrastructure priority. The Energy Review is of great importance and significance to Scotland with our potential to generate up to 25 per cent of wave, wind and tidal power for the whole of Europe. What this shows is that Scotland is well placed to play a key role in ensuring the security of Europe's energy supplies in future.

The European Parliament's powerful Energy Committee, on which Alyn sits as an alternate member, is currently considering its response to the Commission's Second Strategic Energy Review. The Parliament's view is being drafted in the Energy Committee by the French Liberal MEP Anne Laperrouze with opinions from the Foreign Affairs Committee and the Environment Committee also expected. The Energy Committee is scheduled to adopt its report on 20 January with all MEPs voting on the final resolution in plenary in Strasbourg on 18 February. Undoubtedly we will try to put down some amendments and ensure that Scotland's energy interests are foerfront in the discussions here.

Ensuring Europe's energy security

Yesterday the European Commission published its Second Strategic Energy Review which forms the basis of the EU's second energy action plan (2010-2012). Given the implications this has for Scotland’s energy interests, I prepared a briefing note on what is in the Energy Review and what it means for Scotland which I have set out in this blog and the next one:

The energy security package is part of the EU's energy policy, which is based on three pillars: sustainability, competitiveness and security of supply. Each of these 3 pillars has been taken forward by three separate proposed legislative packages.

(1) Internal energy market for electricity and gas - in September 2007 the Commission proposed the third package on the internal market with the focus on opening up Europe's energy markets to greater competition and investment and ensuring effective regulation. Member State governments in the Council agreed their position in June 2008 with the EP adopting its position in July. A final agreement is expected early next year when the Czech Republic assumes the EU Council Presidency.

(2) On 23 January 2008 the Commission came forward with concrete legislative proposals for tackling climate change (20/20/20 targets by 2020) with its green energy package. This comprised legislative proposals for a new approach to actively promoting the use of renewables, updating the EU's Emissions Trading Scheme and the sharing of effort among the Member States, new rules to stimulate carbon capture and new state aid rules on the environment.

(3) This current package sets out an overall strategy for improving energy security and the need for solidarity among the member states with the focus very much on security of supply and developing the external aspects of the EU's energy policy.

The strategy is based on 5 pillars: external energy relations, requirements in terms of infrastructure and the diversification of energy supply sources, oil and gas stocks and crisis response mechanisms, better use of local resources and enhanced energy efficiency policy for buildings and products.

It charts the policy priorities for the next Commission, due to take office in September 2009.

Second Strategic Energy Review

The Commission's proposed energy security strategy is accompanied by:

  • the adoption of a new EU Energy Security and Solidarity Action Plan

  • the launch of a consultation (Green Paper) on Energy Networks for the promotion of new infrastructure to ensure EU energy security. Key is the need for member states to be better connected and linked up to the European Grid.

  • a proposed revision of the EU emergency oil stocks legislation so as to improve coherence with the International Energy Agency system, increase reliability and transparency of available oil and gas stocks. The Commission will also start consulting with a view to proposing in 2009 a revised Directive on security of gas supply. The Commission wants to see improved EU crisis response coordination as well as finding a more suitable threshold for triggering EU action.

  • a Communication on Offshore Wind – the Commission already supports the setting up of a working group to prepare a project for a North Sea offshore network;

  • a Communication in 2010 on overcoming barriers to renewable energy in the EU, focusing on practical issues such as grid constraints that could limit the 2020 target.

  • a new co-ordinated approach on improving and diversifying energy supply from outside the EU with the development of stronger relations with Norway (especially in terms of joint offshore wind projects in the North Sea), energy dialogue with Russia and speeding up negotiations for Ukraine, Moldova and Turkey joining the Energy Community.

  • the creation of an EU Energy Fund by December 2008, supported by the European Investment Bank (EIB), to mobilise large-scale funding from capital markets to invest in new low carbon technologies and energy efficiency.

  • A new Energy Efficiency Package to speed progress towards the 20% target - a Communication on the implementation of national energy efficiency action plans, a revised draft directive on buildings, a revised draft directive on the labelling of consumer products, a proposal on tyre labelling as well as combined heat and power guidelines and communication;

There will be a Communication on the financing of the Strategic Energy Technology Plan in 2009. This will also examine various additional measures to make 12 EU Carbon Capture demonstration plants a reality, including Community-level funding; Preparation of a Roadmap for a 2030-2050 Energy Policy for Europe to be published in 2010.

Thursday, 13 November 2008

Scottish journalists in Brussels

Much of today has been taken up with a group of Scottish journalists which we brought across to Brussels for a one day training session. The group came across yesterday with many of them journalist students studying journalism at various universities across Scotland and wanting to learn and see for themselves how the EU works. Also among the group were a number of journalists from Scotland’s local newspapers. We had organised their visit with the main aim being for the journalists to gain a better insight into the EU and its institutions, what it does, how to follow its work and the relevance of Europe to Scotland and why it matters so it was a full day with back-to-back meetings arranged for them.

Hopefully we managed to introduce them to some pretty useful folk here who they can be in touch with when it comes to reporting any EU stories with a local relevance.
The journalists had the chance to meet with the other Scottish MEPs once they had toured round the Parliament, seeing the chamber and where the committees meet. They also met with civil servants in Scotland House to find out more about the work of the Scottish Government and what its EU priorities are and how they work with other national delegations as well as with Scotland Europa to see how Scotland’s interests are represented in the different EU institutions. The group also met with some of the press team in the European Parliament and the European Commission, as well as with journalists working for The Parliament Magazine in Brussels and Cosla’s European officer who took them through the role of local authorities and the various issues surrounding EU funding.

I had invited Ireland’s Ambassador to the EU, Geraldine Byrne-Nason to speak with the group about Ireland’s experience in the EU and was delighted when she was able to make it along given how busy her schedule was with the Member States still trying to reach an agreement on the climate change package. Chairing this last session I found it heartening to hear the extent to which Ireland has become a model example for other small countries, especially the Baltic states, in its dealings with the EU and how Ireland has managed to use its resources and strategic alliances with other European countries, whether large or small, to influence EU policy. I also asked the Ambassador about Ireland’s experience in setting up a National Forum on Europe as one way in which to increase public debate and awareness as to what is going on in the EU, something which I am very supportive of and would like to see established in Scotland as I have already written and spoken about.

Photos: With the Irish Ambassador to the EU in Scotland House.

Monday, 10 November 2008

Preparing for the CAP health check vote

This week is pretty much about preparing for next week’s crucial vote in Strasbourg on the CAP health check. As per usual hundreds of amendments have gone down to the Santos reports that were adopted by the Agriculture Committee last month for plenary - all of which we need to sift through to enable us to put together a voting list and to make sure we vote against anything that could hamper Scotland’s farmers, our farming industry and our rural communities.

We’ve resubmitted a number of our amendments that didn’t get through the Agriculture Committee and been working closely with Scottish Government civil servants in Scotland House in Brussels and in Edinburgh to ensure the Scottish Government’s vision of agricultural reform is supported by the EP in the vote next week.

Our amendments largely concern proposals to delete progressive modulation as well as those deleting decoupling for sheep and beef payments and retaining the current cross compliance regime as a tool in the fight against wildlife crime by including it in the Wild Birds Directive and the Flora and Fauna Directive, which was of particular concern to the Scottish Government.

With the amount of amendments compromises will undoubtedly have to be sought among the political groups so I await with interest to see what the final compromise package will look like before next week’s vote.

Regardless of the outcome of next week, its clear that the health check debate has moved on and the focus of discussions is very much on the future shape of European agriculture post-2013 where everything will be on the negotiating table.

One of Brussels’s many think tanks, Notre Europe, has published its contribution to the post-2013 debate with its “CAP reform beyond 2013: An idea for a longer view”. It defines a number of general principles such as defining targeting instruments on clear objectives and guaranteeing social return for public money and replacing assistance by incentives. Among its many suggestions it recommends the need to make agriculture more competitive by adapting instruments and regulations to that purpose, replacing the current complex and cost burden payment schemes with a simplified and smaller one in which payments are strictly linked to three basic levels of service – basic husbandry of the countryside preserving farming landscapes, territorial services, environmental sensitive measures – maintaining public intervention to guarantee a floor price (or “safety net”) restricted to exceptional circumstances , which should be WTO compatible as well as sharing financial responsibility between the EU and Member States according to the subsidiarity principle and limiting the EU’s domain of competence to the provision of European public goods.

Over the coming weeks and months we will be working closely with Scotland’s farming and rural interests as well as the Scottish Government to work out Scotland’s contribution to this vital debate and the kind of future European agricultural policy that Scotland would like to see. Scotland has a key role to play in shaping Europe’s future agriculture policy and at the same time ensure that Scotland’s vision of agriculture is at the very heart of the discussions now beginning to get underway in Brussels.