Eurobloat #0050 • June 2014
June 2014 was the month the voters had spoken, and Brussels decided that what they had said did not count. A British prime minister was outvoted twenty-six to two, the central bank started charging people to save, and a search engine in California was deputised as Europe's official censor.
Folly of the Month: A Commission president nobody asked for
At the summit of 26 and 27 June, the European Council nominated Jean-Claude Juncker as Commission president, despite David Cameron forcing the first contested vote in the institution's history and losing it twenty-six to two, with only Hungary at his side. The argument that a federalist veteran of the eurozone should run the Commission rested on the "Spitzenkandidat" wheeze, a process invented after the election to manufacture a mandate that the treaties never granted. Member states that had just watched eurosceptic parties surge across the continent responded by appointing the most enthusiastic integrationist available. If you wondered why Britain would soon start eyeing the exit, this was the month the door was helpfully signposted.
1. The central bank that charges you to save
On 5 June the ECB cut its main rate to 0.15 per cent and, for the first time, pushed the deposit rate to minus 0.10 per cent, meaning banks now pay for the privilege of parking money in Frankfurt. Mario Draghi's cure for a continent that would not grow was to make holding euros mildly punitive, a policy with all the elegance of fining people for not spending fast enough.
2. Google appointed as Europe's memory hole
Following the Court of Justice's "right to be forgotten" ruling, Google launched its removal request form at the end of May, and by June it had received tens of thousands of demands, at one point twenty a minute, to scrub links from search results. Brussels had outsourced the editing of public memory to a single American firm and called it a victory for privacy, which is one way of describing handing a private company a censor's red pen.
3. Apple's tax bill becomes the Commission's business
On 11 June the Commission opened a formal state-aid investigation into Ireland's tax arrangements with Apple, alongside parallel probes into Luxembourg and the Netherlands. Brussels had discovered that the surest route to a member state's sovereign tax policy was to relabel it "state aid" and march the competition directorate straight through the front door.
4. A bank-rescue rulebook written in Brussels
Directive 2014/59 on bank recovery and resolution was published in the Official Journal on 12 June, complete with its much-trumpeted "bail-in" machinery. The promise was that taxpayers would never again rescue a failing bank, which sounded splendid until you noticed the accompanying plan to decide who lives and who dies from a new board in Brussels rather than in national capitals.
5. The bank that decides which banks fail
The Single Resolution Mechanism, finalised this summer, hands the power to wind up a struggling bank to a Single Resolution Board headquartered in Brussels rather than to the country whose taxpayers and depositors will feel the consequences. Banking union was sold as stability; in practice it was one more national competence quietly relocated to the centre, with the bill left at home.
6. Another candidate joins the queue
On 24 June the Council agreed to grant Albania candidate status, duly endorsed by the European Council days later. An institution that could not persuade its own voters to turn out for its elections responded by cheerfully advertising for new members, on the timeless principle that any club losing its enthusiasts should simply recruit more.
7. The auditors get their own rulebook
Regulation 537/2014 on the statutory audit of public-interest entities, part of the audit reform package finalised this spring and now in force, layered fresh EU-wide rules on rotation, fees and forbidden services onto every large firm's accountants. The lesson of the financial crisis, apparently, was that what Europe most lacked was a thicker manual telling auditors how to audit.
8. Market abuse, harmonised
The Market Abuse Regulation, 596/2014, entered the statute book this summer, replacing workable national rules with a single Union-wide code on insider dealing and market manipulation. Harmonisation is the magic word that turns twenty-eight sets of rules into one Brussels rulebook, and somehow the page count never goes down.
9. A single portal to rule all clinical trials
The Clinical Trials Regulation, 536/2014, entered into force on 16 June, promising to replace national approval systems with one centralised EU portal and database. The simplification was real enough on paper; the catch, buried in the small print, was that none of it could actually work until Brussels had built the IT system, a task that would drag on for years while researchers waited.
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