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S&P cuts EU rating over tense budget talks – Europe – Al Jazeera English

S&P cuts EU rating over tense budget talks – Europe – Al Jazeera English.

S&P said that cohesion among EU members had lessened [GETTY]
Standard & Poor’s has downgraded the European Union’s long-term credit rating, stripping the bloc of the highest grade of AAA to AA+, citing rising tensions on budget negotiations.The move follows cuts to the ratings of EU member states in recent months.

The credit rating agency said on Friday that a bitter battle over the EU budget and worsening creditworthiness of its members are behind the decision to decrease the bloc’s long-term issuer credit rating by one grade.

“In our opinion, the overall creditworthiness of the now 28 EU member states has declined,” S&P said in a statement.

“In our view, EU budgetary negotiations have become more contentious, signaling what we consider to be rising risks to the support of the EU from some member states.”

S&P said cohesion among EU members had lessened and that some might baulk at funding the EU budget on a pro-rata basis.

Average rating of contributors dropped

The average rating of net contributors to the EU budget has fallen to AA+ from AA since January 2012, when S&P revised its outlook on the long-term EU rating to negative, the company said.

S&P has had a negative outlook on the EU since that date and has since cut its ratings on members France, Italy, Spain, Malta, Slovenia, Cyprus and the Netherlands.

The EU is not a sovereign but it can borrow in its own name. As of this month, it had outstanding loans of 56 billion euros ($76.5 billion), according to S&P.

The credit-rating agency said its downgrade of The Netherlands last month left the EU with six AAA-rated members. Since 2007, revenues contributed by AAA-rated sovereigns as a proportion of total EU revenues nearly halved to 31.6 percent, it added.

 

Government under fire for rejecting European Union food bank funding | Society | The Guardian

Government under fire for rejecting European Union food bank funding | Society | The Guardian.

Government under fire for rejecting European Union food bank funding

Critics say Conservative anti-EU ideology being put ahead of needs of the poor after UK officials turn down subsidy
food banks

The economic downturn has seen use of food banks in Britain increase dramatically in recent months. Photograph: Mercury Press & Media Ltd

The government has been accused of putting “anti-European ideology” before the needs of the most deprived people in society after Britain rejected help from a European Union fund to help subsidise the costs offood banks.

David Cameron, who was heavily criticised recently after Michael Gove blamed the rise in food banks on financial mismanagement by families, faced pressure to embark on a U-turn to allow EU funds to be spent on feeding the poor.

The government came under fire after British officials in Brussels said that the UK did not want to use money from a new £2.5bn fund – European Aid to the Most Deprived – to be used to help with the costs of running food banks. The use of food banks has increased dramatically in recent months, prompting Sir John Major to warn that the poor face a stark choice between paying for heating or food.

But British officials rejected EU funding for food banks, which could have reached £22m for Britain, on the grounds that individual member states are best placed to take charge of such funding.

A document from the Department of Work and Pensions explaining Britain’s position, which has been leaked to the Guardian, says: “The UK government does not support the proposal for a regulation on the fund for European Aid to the Most Deprived. It believes that measures of this type are better and more efficiently delivered by individual member states through their own social programmes, and their regional and local authorities, who are best placed to identify and meet the needs of deprived people in their countries and communities. It therefore questions whether the commission’s proposal is justified in accordance with the principle of subsidiarity.”

Richard Howitt, a Labour MEP who helped negotiate the new fund, accused the government of neglecting the needs of the poor. “It is very sad that our government is opposing this much-needed help for foodbanks on the basis that it is a national responsibility, when in reality it has no intention of providing the help itself. The only conclusion is that Conservative anti-European ideology is being put before the needs of the most destitute and deprived in our society.”

Howitt added that he hoped that a Westminster parliamentary debate on Wednesday would prompt a government U-turn. He said the debate “should be used to shame a government, which is taking food out of the mouths of the hungry, into a U-turn in time for Christmas”.

It is understood that in “trilogue” negotiations – between the European commission, the council of ministers and the European Parliament – British officials formed a blocking minority with three other EU member states to water down the fund which will run from 2014-2020. Under the original plans there would have been just one funding strand for the “distribution of material assistance” – sleeping bags and food. But Britain prompted the creation of a second funding strand known as “immaterial assistance” to cover counselling and budget maintenance but not food banks.

The position taken by UK officials means that Britain will draw down just €3.5m (£2.9m) from the fund compared with €443m for France which is around the same size as the UK. Britain is taking the same amount as Malta, the smallest EU member state with a population of 450,000.

The department for work and pensions said that Britain has not lost any money because the £22m would have come out of the UK’s EU structural fund pot. It said that ministers have not decided how to allocate the £2.9m earmarked for Britain from the fund, though this is expected to be spent on helping unemployed people find work.

A DWP spokesperson said: “We aren’t losing money – any funding the UK receives from the Fund for European Aid to the Most Deprived will be taken off our structural fund allocation. Instead we will use our structural funds to support local initiatives to train and support disadvantaged people into work. We have not yet decided how the €3.5m euro pot (£2.9m) will be spent – food aid is just one of the options for spending the money.”

Chris Mould, the executive chairman of Britain’s largest network of food banks, the Trussell Trust, told the Guardian: “We would welcome an opportunity to have discussions with DWP about how we could use that €3.5m to good effect. If the EU made a decision in the European Parliament that this money should be used for the assistance of people in severe need – and it has got a food aid tag on it – then we hope they will talk to us.”

On the signs that the government would like to spend the money in helping people into work, rather than on food aid, Mould said: “It is the decision of government at all times what its priorities are for the money it has available. But it does need to spend money in several places not in one place. The Trussell Trust has provided through its network of food banks emergency assistance for over 500,000 people since 2013 who are in financial crisis, who are going hungry who have been referred by more than 23,000 different professionals holding vouchers.

“If people don’t get help when they are in financial crisis they lose their home, their families break down, they suffer anxiety and depression. All these things have a significant financial cost to the state. It is very important that the government looks beyond the narrow single issue argument of spending all the money into employment. Of course that is important but they are spending massive of money on that which is good. But this EU money is extra and originally intended to be for food assistance.”

EU banks still pose systemic threat – FT.com

EU banks still pose systemic threat – FT.com.

Nigel Farage destroys Europe’s latest bad idea

Nigel Farage destroys Europe’s latest bad idea.

Owen Paterson: UK must become global leader on GM crops | Environment | The Guardian

Owen Paterson: UK must become global leader on GM crops | Environment | The Guardian.

 

Iain Duncan Smith accuses European commission of benefits ‘land grab’ | UK news | The Guardian

Iain Duncan Smith accuses European commission of benefits ‘land grab’ | UK news | The Guardian.

 

EU Oil Manipulation Probe Shines Light on Platts Pricing Window – Bloomberg

EU Oil Manipulation Probe Shines Light on Platts Pricing Window – Bloomberg.

 

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