Eurobloat #0018 • October 2011
October 2011 was the month the eurozone was saved, again, by promising money that did not exist, while the Commission found time between crisis summits to regulate the lettering on a packet of crisps.
Folly of the Month: A trillion euros assembled from thin air
At the small-hours summit of 26 to 27 October, eurozone leaders unveiled their rescue masterplan: lean on private banks to swallow a 50 percent loss on Greek bonds, order every European bank to reach 9 percent capital, and "leverage" the €440bn bailout fund up to a notional €1 trillion. Leverage, here, meant taking the money they did not have and multiplying it by the money they also did not have. Within days markets had read the small print, Greece had announced a referendum that panicked Brussels into fury, and the whole edifice was unravelling before the ink dried. The lesson, as ever, was that more Europe could fix anything, provided nobody asked where the cash was coming from.
→ greekreporter.com → en.wikipedia.org
1. The Commission decides what an embryo is
On 18 October the Court of Justice ruled in the Brüstle case that techniques destroying a human embryo cannot be patented, and helpfully defined an embryo as every fertilised egg cell from the moment of fertilisation onward. European stem-cell researchers, who had assumed such metaphysics was a matter for member states and their own ethics, discovered that Luxembourg now legislates on the meaning of life.
2. Your sandwich gets a rulebook
On 25 October the Parliament and Council adopted Regulation 1169/2011 on food information to consumers, a sprawling text that prescribes mandatory nutrition tables, allergen highlighting and, gloriously, a minimum font size for the small print. Nothing says a thriving single market like Brussels measuring the millimetres of a yoghurt pot.
3. The EU wants a tax of its very own
All through October the Commission's freshly tabled financial transaction tax sat on the agenda, the levy Barroso had unveiled on 28 September to make finance "pay its fair share". The interesting detail was never the 0.1 percent on shares but the destination: a slice was earmarked as an EU "own resource", which is Brussels for a tax that flows to Brussels rather than to the capitals that still imagine they hold the purse.
4. Banning the bets, expanding the watchdog
Around 18 to 19 October, MEPs and the Polish presidency struck a deal to ban naked credit default swaps on sovereign debt and to hand the EU's new financial supervisor, ESMA, the power to overrule national regulators and prohibit short selling across the bloc. Speculators were the announced villains; the quiet winner was a Paris-based agency that may now instruct member states on what their own markets are allowed to do.
5. A directive to harmonise your shopping basket
Also on 25 October came the Consumer Rights Directive 2011/83, billed as cutting red tape by harmonising contract rules across twenty-seven countries. The achievement of harmonising twenty-seven sets of rules is, of course, the creation of one large new set of rules, drafted in Brussels and binding on all, which is a curious way to describe a simplification.
6. Frontex gets a growth spurt
On 25 October Regulation 1168/2011 handed the EU border agency more staff, more equipment and a broader mandate. After a year in which the agency had watched the Mediterranean route overwhelm Lampedusa, the response was not to ask why the external border leaked but to enlarge the agency that failed to hold it.
7. Opening the labour market on cue
At the same Strasbourg plenary, MEPs pressed member states to throw open their labour markets to Bulgarian and Romanian workers, denouncing the transitional controls a string of governments had sensibly kept. Nations that preferred to manage who arrived and when were lectured for the sin of caution by an assembly that bears none of the cost.
8. The schoolmaster grades its pupils
The 24 to 27 October session opened with Van Rompuy and Barroso summoned to be quizzed on the summit, and the Parliament wrangling over its stance on the 2012 EU budget, which it wished to see grow even as national treasuries were slashing theirs. The institutions demanding austerity of everyone else proposed, with a straight face, a larger budget for themselves.
9. A central bank changing horses mid-crisis
On 31 October Jean-Claude Trichet's term ended and Mario Draghi prepared to take the ECB helm the next day, inheriting a bond-buying programme and an interest rate Trichet had raised twice that very year. The pattern repeats: an unelected institution acquires ever more power over the fate of nations, and the only question that changes is which official signs the cheques.
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