News 1st Dec 2005.   Eric's warning: "The socialist totalitarian state is coming again"

1. New analysis finds EU red tape has cost firms 30 billion pounds - burden of EU regulation increasing sharply

2. New German Chancellor: "Europe needs the EU Constitution"

3. UK loses access to US defence technology over cooperation with EU

4. EU expanding powers over legal system with EU evidence warrant and new EU Commission powers to put forward EU criminal offences

5. News in brief

6. Open Europe in the News

1. EU red tape costs UK economy 30 billion pounds

A new study released this week by Open Europe finds that EU legislation has been responsible for 77 percent of the cost of regulation on businesses since 1998. The study calculates that EU-derived legislation has cost the UK economy 30 billion pounds since 1998 alone.

Based on previous research by the British Chambers of Commerce, Gordon Brown has argued that "around half" of the cost of regulation on business is caused by EU legislation. But the new analysis - based on the Government's answers to an extensive programme of Parliamentary questions - suggests that even this is an underestimate, because many pieces of supposedly domestic legislation are in fact implementing EU legislation.

The report also finds that despite repeated promises by the European Commission that it will reduce red tape, the burden of EU regulation on the economy is still rising sharply. The report proposes four ways to reduce the cost of regulation, drawing on the experiences of other EU member states such as Holland and Denmark.

In a foreword to the study, former CBI President Sir John Egan writes:

"Despite the good intentions of Commission President Barroso, Europe's production of new regulations is actually increasing at an alarming rate. Of the 22,000 pieces of legislation on the EU statute book, about 12,000 have been introduced in the eight years since 1997, compared to 10,000 during the forty years from 1957 to 1997."

"Look closely at what the European Commission's 'war on red tape' really means and the sad answer is: not very much. The emphasis seems to have drifted towards redrafting laws rather than actually hacking back red tape. Given Europe's slow growth, high unemployment, and future demographic problems, this kind of tinkering around the edges is not a proportionate response to the scale of the challenges Europe faces. We cannot afford to go on like this."

For a copy of the report please visit
http://www.openeurope.org.uk

2. EU leaders still want to press on with EU Constitution

The new German government has signalled that it will do "whatever is necessary" to resurrect the EU Constitution. An agreement signed by the new governing "grand coalition" of the Social Democrats (SPD) and the Conservatives (CDU) which sets out their governing programme states, "We stand for the European constitutional treaty. We pledge to continue the ratification of the European constitutional treaty after the first half of 2006 and to give new impulses to [the ratification] under the German presidency in the first half of 2007".

In a speech to the European Parliament, the new German Chancellor, Angela Merkel, emphasised her personal commitment to the rejected EU Constitution. She declared that "Europe needs the Constitution. [the German government is] willing to make our contribution to whatever is necessary to see the Constitution come into force. The pause for reflection is not an excuse to set aside the Constitution." (23 November)

Foreign policy is expected to continue in the same track as Gerhard Schroder's administration, seeking further EU integration and close ties with France. The new Foreign Minister, Frank-Walter Steinmeier, was one of Schroder's closest advisers. Merkel's personal foreign affairs adviser, Dr Christoph Heusgen, was an adviser to EU foreign policy Commissioner Javier Solana in Brussels for six years.

Dr Heusgen has proposed that a way to bypass the French and Dutch no votes would be to simply implement all the parts of the EU Constitution which do not rely on ratification. The EU has already begun this process, setting up institutions which were in the Constitution, such as the European Defence Agency and the European Space Agency, through inter-governmental agreements. The French government is particularly in favour of this approach because it would be extremely difficult for it to bring back the Constitution for a second referendum. The French Defence Minister, Michèle Alliot-Marie, has said "Do we still need a text when we have political will? I don't think so." (Le Monde, 23 November)

The new German government's desire to push through the EU Constitution is shared by a majority of EU leaders. A Commission official was quoted in the Telegraph on 20 November arguing, "Some people might argue that the Constitution is dead. But it is still on the table. The only thing that has been decided is that there will be a period of reflection."

Czech Foreign Minister Cyril Svoboda said recently: "In my opinion, this is a good treaty, a good compromise, and any new text would only be worse. In the first half of next year, under Austria's EU presidency, political leaders should discuss the matter and find a way to ratify the European document." (BBC Monitoring, 28 November)

Irish Foreign Minister Dermot Ahern recently said that the Irish government "believe that the constitution offers the best available way forward for the EU. The best option, therefore, is to keep the Constitution intact, and to review its prospects once the current period of reflection has come to a close." (Irish Times, 21 October)

Slovene President Janez Drnovsek said that "too much energy and good will has been invested in the EU Constitution to simply abandon the project". (BBC, 25 October 2005)

3. UK loses access to US defence technology over cooperation with EU

Last week the Financial Times reported that the United States has finally turned down a UK Government request to grant it a waiver from US International Traffic in Arms Regulations (ITAR), which govern the issue of export licenses for high-tech US military equipment.

The complex ITAR rules force the UK to go through an extended approval process in order to get the go-ahead from the US State Department for arms purchases. Currently, only Canada has a waiver from the rules.

Tony Blair has been pushing for the US to grant the UK a waiver for the past five years. The waiver is important for Anglo-American military projects such as the Joint-Strike Fighter and is also crucial for British troops fighting alongside US soldiers in order that they can get the most up-to-date equipment.

While the measure has been supported by Bill Clinton, George W. Bush and the State Department, it has been held up by the powerful International Relations Committee in the House of Representatives and particularly its Chairman Henry Hyde.

One of the central reasons the UK has been denied access is the fear that technology and secrets will be "leaked" from the UK to other European countries, and then on to third parties which could damage US security interests.

In a 2004 report the US Congress committee highlighted the "increase in suspicious arms activity in Europe". They also stress that "unlike the case in Canada [which has a waiver], many major UK defence companies are now jointly partnered with other European firms.'' Mr Hyde has also been a fierce critic of Britain's push to lift the European Union's arms embargo on China last year.

The American committee was also highly critical of the UK Government's refusal to toughen up its laws on re-exporting military goods it had received from the US. The UK's refusal was seen as especially strange in the US because in 2000 the UK signed an agreement with other European countries on defence which included such a clause. The UK Government signed a further agreement with other EU governments establishing a code of conduct for the EU's defence market on 21 November, which many in France hoped will establish a 'community preference' for arms purchases within the EU.

In a report in 2003, the Defence Committee in the Commons warned that plans for further integration in the EU defence market could cause problems. "We welcome any initiative that encourages movement towards a rationalised and efficiently managed defence market in Europe. It is important, however, that any developments on that front do not create agencies and programmes which foster European preference at the expense of the UK's two-way trans-Atlantic trade."

The Foreign Office has claimed for years that accelerating moves towards a common EU defence will not undermine NATO or the UK's relationship with other allies such as the US. Britain's loss of access to key US technologies is another sign that this EU-first strategy is coming unstuck.