1. MEP 'offended' by member states' attempt to reduce EU budget increase

MEPs have reacted angrily to national governments' attempts to halt a proposed 5.9% increase to the EU's 2011 budget. National ambassadors to the EU have agreed a draft budget for 2011 of €126.58 billion, which is €3.6bn less than the draft budget presented by the Commission in April. The member states' proposal would still mean that the EU's budget would increase by 2.8% next year compared to 2010's budget, but the Commission's proposal would represent a 5.9% increase.

Sidonia Jedrzejewska MEP, the EP's rapporteur on the budget, responded to national governments' offer by telling an EP committee that, "I take these cuts not only as a provocation but as an offence." Jedrzejewska suggested that plans to cut the budget for youth training programmes were "a slap in the face". (European Voice EurActiv France, 15 July)

The negotiations are set to be tough, with seven member states - Austria, the Czech Republic, Denmark, Finland, the Netherlands, Sweden and the UK - opposing the compromise offer of a 2.8% increase, arguing that there should have been even deeper cuts to the Commission's proposal.

Meanwhile, figures published by the Commission reveal that, in the last three years, the EU has given out £400m in grants to 727 projects marked "confidential". A Commission spokeswoman defended the spending, saying, "This is a very small amount of money and I am sure there are reasons why this is confidential." (Express, 10 July)

Where details were available, some of the projects receiving funding included "The Flying Gorillas" dance troupe, who received £160,000 to perform "spectacular belching" and "smelly foot" jigs. In addition, nearly £147,000 has been spent on creating 736 postcards - one for each MEP in the European Parliament. Each cost the taxpayer £200. (Sun, 10 July)

2. Finance ministers agree to give EU financial supervisors power to bypass national regulators

EU finance ministers meeting this week reached a political agreement on the rules for the creation of a new pan-European system of supervision for the financial services industry, which could have a huge impact on the City of London. The deal will see three European Supervisory Authorities (ESAs) being set up and given the power to bypass national regulators, such as the Financial Services Authority (FSA) in the UK, and directly address financial institutions with binding decisions when an "emergency situation" occurs.

Although the UK was initially opposed to giving such powers to the European supervisors, it relented on this proposal. In exchange, national governments, rather than the Commission for example, will have the last word on what constitutes an "emergency situation" in which the ESAs can use their powers of direct supervision. However, crucially, it is not yet clear under what voting system member states will decide on this. (Telegraph FT, 14 July)

Speaking at an event held by Open Europe this week, Conservative MEP Kay Swinburne conceded that, under the current proposal, a vote on declaring an emergency situation is "likely to be [by] simple majority", meaning that the UK would have the same voting weight as all other member states, even those with very small financial sectors. (OE events, 12 July)

The European Parliament had been calling for all three ESAs to be housed in Frankfurt, but this was rejected by the UK, which insisted that the European Banking Authority (EBA) - the EU watchdog responsible for the banking sector - would be based in London. Further negotiations are now likely to take place at the end of August, or the beginning of September, with an extraordinary meeting of EU finance ministers to take place on 7 September to further hasten proceedings. (Reuters Italia Telegraph, 14 July; La Tribune, 15 July)

3. News in brief

Brussels fines UK £150m for failing to fly the EU flag at funded projects. The EU has fined Britain more than £150 million for failing to display the EU flag as part of EU funded projects. The fines relate to the £3.8 billion given to the UK by the European Regional Development Fund, which has strict rules on the display of the EU flag on any project accepting cash. (Mail Telegraph, 8 July)
 
EU anti-fraud office identifies €1.8bn open to fraud and irregularities. The EU's anti-fraud office Olaf's annual 2009 report notes that of its 133 investigations into cases of fraud, most concerned officials from the European Commission, the EU Parliament and EU agencies, as well as the Committee of the Regions, the Data Protection Supervisor, the EU Ombudsman and the European Investment Bank. The Olaf report identifies €1.8 billion in EU funding which was open to fraud and irregularities, which is €700 million more than in 2008. Structural Funds are thought to be most prone to abuse. (EUobserver Olaf report, 15 July)
 
15 MEPs check out of EP early and head to Seychelles. 15 MEPs have travelled to the Seychelles for a two-day ACP-EU Joint Parliamentary Assembly meeting, just a few weeks after the EP's so-called "external parliamentary activities" session - the week when MEPs are given the opportunity to attend such meetings - and in the last week before the EP breaks for a six-week summer recess. (The Parliament, 16 July).

EU fishing subsidies used to support illegal fishing. Data from EU sources suggest that a third of pirate drift-netters penalised in Italy in the past five years had previously received more than €12 million in EU funding to stop using the nets. (FT , 6 July)

End the travelling circus between Brussels and Strasbourg

16 July Knack

Open Europe's Pieter Cleppe was quoted in Belgian magazine Knack in an article on the European Parliament's travelling circus between Brussels and Strasbourg, saying that he is in favour of abolishing the Brussels premises of the Parliament, and moving it completely to Strasbourg. He said he was in favour "of the theory which prefers to have different institutions at different locations. That's how the European Parliament avoids becoming a spokesbody for the European Commission."

British MEPs have worst European Parliament attendance record

16 July The Parliament 10 July Telegraph

An article in the Telegraph, reporting that the UK's 72 member delegation to the European Parliament had the worst attendance record of all 27 member states, quoted Open Europe's Stephen Booth, saying "British MEPs are paid an awful lot of money to defend the interests of UK voters in Europe but it's pretty difficult to do that if they don't turn up to vote. Helping to fight the general election campaign is all very well but MEPs' first duty is to make sure that EU laws coming out of the European Parliament are good for the UK." Stephen was also quoted in The Parliament magazine.

The Coalition must keep promise on referendum

13 July E!Sharp

Open Europe's Director Mats Persson was quoted in an E!Sharp article on the Coalition Government's performance so far, saying that "It would be counterproductive for the government not to keep its promise of a referendum after a transfer of powers [to the EU]...The biggest risk is that like Labour, the coalition government tells the domestic audience that nothing is happening in Brussels and dismisses any changes as a tidying-up exercise to avoid a referendum. That would store up massive problems for the future, antagonising Tory backbenchers and public opinion".

UK contributes £135 million to EU officials' pensions

13 July Express

Open Europe was quoted in the Express, commenting on research that found the UK contributes £135 million a year to EU officials' pensions. Open Europe called for immediate reform of the EU's pension scheme and said: "The outrageous cost of EU civil servants' pensions is completely unaffordable. Governments across Europe are making tough spending choices and workers are facing unemployment and salary cuts". 

European Commission has given out £400m in grants to "confidential" projects

10 July Sun Express

The Sun and the Express both reported on Open Europe's finding that, in the last three years, the European Commission has given out £400m in grants to 727 projects marked "confidential". Open Europe's Stephen Booth was quoted in the Sun saying, "Funding these projects would be pretty ridiculous at the best of times, but when the Government is talking about massive cuts, the EU's spending looks truly outrageous. How can the EU demand more cash when it's throwing £400million of taxpayers' money down a black hole?" He was also quoted in the Express.

Future treaty changes should repatriate powers

8 July American Spectator

Open Europe's Mats Persson was quoted by the American Spectator magazine arguing that any future EU treaty change should be used by David Cameron to repatriate powers to Britain.

'The EU after the euro crisis: superstate or disintegration?'

5 July Guardian: Hannan

Writing in the Guardian, Conservative MEP Daniel Hannan cited Open Europe's recent debate, "The EU after the euro crisis: superstate or disintegration?", and argued that trying to label critics of the European Union as xenophobes is a "handy way of sidestepping criticism".