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EUROPEAN UNION

UK absent as EU leaders seek unity on 60th birthday

European Union leaders celebrated the 60th anniversary of the bloc's founding treaties at a special summit in Rome on Saturday in a symbolic show of unity despite Britain's looming departure.

UK absent as EU leaders seek unity on 60th birthday
Photo: AFP
Meeting without Britain, the other 27 member countries will endorse a declaration of intent for the next decade, on the Capitoline Hill where six founding states signed the Treaty of Rome on March 25, 1957.
   
EU President Donald Tusk and the prime ministers of Italy and Malta greeted the leaders as they arrived at the Renaissance-era Palazzo dei Conservatori next to the Forum, for a ceremony long on pomp and short on real politics.
   
“There will be a 100th birthday of the European Union,” European Commission chief Jean-Claude Juncker said in an interview with German television ahead of the summit.
   
The leaders had the words of Pope Francis ringing in their ears, after he warned on the eve of the summit that the crisis-ridden bloc “risks dying” without a new vision.
  
The Argentine pontiff urged the leaders at a personal audience in the Vatican City on Friday to show solidarity as an “antidote” to populist parties whose popularity has surged in Europe.
   
The White House congratulated the EU overnight on its 60th birthday, in a notable shift in tone for President Donald Trump's administration, whose deep scepticism about the bloc has alarmed Brussels.
   
“Our two continents share the same values and, above all, the same commitment to promote peace and prosperity through freedom, democracy, and the rule of law,” the White House said in a statement.
 
'Europe our common future'
 
The 27 are set to hear a series of speeches urging unity and leadership from Tusk, Juncker, Italian PM Paolo Gentiloni and Maltese premier Joseph Muscat, whose country holds the EU's rotating presidency.
   
But British Prime Minister Theresa May's absence, four days before she launches the two-year Brexit process, and a row over the wording of the Rome declaration underscore the challenges the EU faces.
   
Security is tight with snipers on rooftops, drones in the skies and 3,000 police officers on the streets following an attack this week in London claimed by the Islamic State (IS) group.
   
The Rome Declaration that the leaders will sign proclaims that “Europe is our common future”, according to a copy obtained by AFP.
  
But mass migration, the eurozone debt crisis, terrorism and the rise of populist parties have left a bloc formed from the ashes of World War II
searching for new answers.
   
The leaders are deeply divided over the way forward almost before they have started.
   
Polish Prime Minister Beata Szydlo only agreed to sign the declaration at the last minute, after bitterly opposing a reference to a “multi-speed” Europe favoured by powerhouse states France and Germany.
   
Poland, central Europe's largest economy, is concerned that as one of nine of the EU's current 28 members outside the eurozone, it could be left behind should countries sharing the single currency push ahead with integration.
   
Greece, the loudest voice against the austerity policies wrought by its three eurozone bailouts, meanwhile insisted that the document should mention social policies.
 
Protests planned 
 
The aim of the summit was to channel the spirit of the Treaty of Rome that Belgium, France, Italy, Luxembourg, The Netherlands and West Germany signed six decades ago to create the European Economic Community (EEC).
   
The treaty was signed in the Horatii and Curiatii hall of the Palazzo dei Conservatori, one of the Renaissance palaces that line the Michelangelo-designed Capitoline Square, and the political and religious heart of the Roman Empire in ancient times.
   
Police in the Eternal City will be on the alert not only for lone wolf attackers in the wake of the British parliament attack on Wednesday, but also violent anti-Europe demonstrators.
  
Around 30,000 protesters are expected to take part in four separate marches — both pro- and anti-Europe — throughout the day. Police plan to stop all traffic and declare a no-fly zone.
  
A grassroots movement led by former Greek finance minister and leading austerity critic Yanis Varoufakis will launch a new manifesto, with Varoufakis warning that the EU is “disintegrating” so fast it might not last another decade.

ENERGY

How European countries are spending billions on easing energy crisis

European governments are announcing emergency measures on a near-weekly basis to protect households and businesses from the energy crisis stemming from Russia's war in Ukraine.

How European countries are spending billions on easing energy crisis

Hundreds of billions of euros and counting have been shelled out since Russia invaded its pro-EU neighbour in late February.

Governments have gone all out: from capping gas and electricity prices to rescuing struggling energy companies and providing direct aid to households to fill up their cars.

The public spending has continued, even though European Union countries had accumulated mountains of new debt to save their economies during the Covid pandemic in 2020.

But some leaders have taken pride at their use of the public purse to battle this new crisis, which has sent inflation soaring, raised the cost of living and sparked fears of recession.

After announcing €14billion in new measures last week, Italian Prime Minister Mario Draghi boasted the latest spending put Italy, “among the countries that have spent the most in Europe”.

The Bruegel institute, a Brussels-based think tank that is tracking energy crisis spending by EU governments, ranks Italy as the second-biggest spender in Europe, after Germany.

READ ALSO How EU countries aim to cut energy bills and avoid blackouts this winter

Rome has allocated €59.2billion since September 2021 to shield households and businesses from the rising energy prices, accounting for 3.3 percent of its gross domestic product.

Germany tops the list with €100.2billion, or 2.8 percent of its GDP, as the country was hit hard by its reliance on Russian gas supplies, which have dwindled in suspected retaliation over Western sanctions against Moscow for the war.

On Wednesday, Germany announced the nationalisation of troubled gas giant Uniper.

France, which shielded consumers from gas and electricity price rises early, ranks third with €53.6billion euros allocated so far, representing 2.2 percent of its GDP.

Spending to continue rising
EU countries have now put up €314billion so far since September 2021, according to Bruegel.

“This number is set to increase as energy prices remain elevated,” Simone Tagliapietra, a senior fellow at Bruegel, told AFP.

The energy bills of a typical European family could reach €500 per month early next year, compared to €160 in 2021, according to US investment bank Goldman Sachs.

The measures to help consumers have ranged from a special tax on excess profits in Italy, to the energy price freeze in France, and subsidies public transport in Germany.

But the spending follows a pandemic response that increased public debt, which in the first quarter accounted for 189 percent of Greece’s GDP, 153 percent in Italy, 127 percent in Portugal, 118 percent in Spain and 114 percent in France.

“Initially designed as a temporary response to what was supposed to be a temporary problem, these measures have ballooned and become structural,” Tagliapietra said.

“This is clearly not sustainable from a public finance perspective. It is important that governments make an effort to focus this action on the most vulnerable households and businesses as much as possible.”

Budget reform
The higher spending comes as borrowing costs are rising. The European Central Bank hiked its rate for the first time in more than a decade in July to combat runaway inflation, which has been fuelled by soaring energy prices.

The yield on 10-year French sovereign bonds reached an eight-year high of 2.5 percent on Tuesday, while Germany now pays 1.8 percent interest after boasting a negative rate at the start of the year.

The rate charged to Italy has quadrupled from one percent earlier this year to four percent now, reviving the spectre of the debt crisis that threatened the eurozone a decade ago.

“It is critical to avoid debt crises that could have large destabilising effects and put the EU itself at risk,” the International Monetary Fund warned in a recent blog calling for reforms to budget rules.

The EU has suspended until 2023 rules that limit the public deficit of countries to three percent of GDP and debt to 60 percent.

The European Commission plans to present next month proposals to reform the 27-nation bloc’s budget rules, which have been shattered by the crises.

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