Director’s take on Spain’s economic jeopardy, I’m So Excited should remind the Rajoy government that the end is still in doubt
A plane circles in the sky with a damaged undercarriage. The passengers get up to high jinks as they wait for the inevitable crash landing. A cast of call girls, gay cabin crew and a crooked banker on the run says this is your traditional 1970s-style Hollywood airline disaster comedy. In fact, it is how Spain’s most renowned film director, Pedro Almodóvar sees the current state of his country.
Needless to say, that is not the view of Mariano Rajoy’s government in Madrid. While not disputing that Spain has its problems, the administration say the wipeout that was looming last summer has been avoided.
Proof is that financial market conditions have eased since Mario Draghi said that the European Central Bank would do whatever it took to safeguard the future of the euro. Spain used the breathing space to patch up its creaking banking system with European money, and has subjected itself to an eye-watering austerity programme that makes George Osborne’s deficit reduction plan look like Keynesian largesse. Labour market reforms – wage cuts and more flexible working practices – have repaired the damage caused to competitiveness by the construction and housing bubble of the 2000s, resulting in multinational firms moving production to Spain from higher cost parts of the eurozone, such as France and Belgium.
Spanish policymakers also think Europe-wide developments are helpful. Governments are being given more time to put their public finances in order and there is growing confidence in Madrid that a banking union will be agreed despite German reservations. Spain, with its still-fragile banking system and bombed-out real estate sector, is desperate for a pan-European system for resolving bank crises and for guaranteeing deposits, and thinks that in the end Berlin will come round to the idea.
Indeed, Rajoy’s government favours not just banking union but fiscal union, with a European finance minister having control over a budget that could be used to boost growth in struggling parts of the eurozone.
Spain says two things are needed to make the single currency work better: economic reform at a country level and a more integrated macro-economic policy at European level. Madrid argues the single market can only work effectively with a fixed exchange rate system, because a floating rate system would allow member states to grab competitive advantages through devaluation. But giving up control of interest rates and exchange rates can be costly in terms of lost jobs and output unless there is a more activist fiscal policy. This, Spain believes, is what Europe lacks.
The political will to make this happen is often underestimated in Britain. Spain thinks it had no choice to join the euro once Germany and France had decided to go ahead with the project. What’s more, it is convinced monetary union will survive unless Germany decides to pull the plug on France: the one country that has always been able to rely on support from Berlin when the going gets really tough.
Beneath the surface in Madrid, there is simmering anger at the refusal of Germany to help struggling countries by importing more, and resentment that different rules seem to apply to unreformed France. But there is no deep-seated euroscepticism and certainly no nostalgia for the peseta; rather an acceptance that if Spain did regain control of the printing presses the country really would be in trouble.
Even so, the threat of a crash landing remains. That’s not just because unemployment in Spain has risen by three and a half million since the start of the crisis and has now reached 27%, or that the domestic economy has shrunk by a sixth. It is that Spain is up to its eyeballs in debt, with no likely improvement in prospect. Despite austerity, little progress is being made in reducing the budget deficit and national debt is heading for well over 100% of gross domestic product. In the absence of more rapid growth and a banking union being agreed swiftly, a Greek-style debt restructuring seems eminently possible.
Spain is perhaps the emblematic eurozone country. Its past performance reflects the design flaws in the single currency; it is trapped in a low-growth, high-debt vortex; and it can only recover if a reluctant Germany backs plans for integration.
Let’s take those three points in turn. Interest rates were cut when Spain lost control of its own monetary policy by joining the euro, leading to over-investment in the property sector. There was misallocation of resources on a grand scale as banks lent recklessly for commercial and residential property projects. Governments everywhere love construction booms because they generate the two things politicians like: jobs and tax revenues. Spain’s was no exception.
The dark side of the real estate bubble was that the private sector ran massive deficits, worth more than 10% of national output by the time the music stopped. Left to its own devices, Spain would have run a much tighter monetary policy during the first half of the 2000s, but the European Central Bank kept interest rates low, which at the time suited Germany.
Recession led to private sector retrenchment. Firms went bust, real estate projects were mothballed, banks stopped lending, investment plunged and consumers stopped spending. The private sector moved into surplus, but this was matched by a public sector deficit of 10% of GDP.
Spain’s boom was accompanied by higher inflation than in the rest of the eurozone, so its goods became uncompetitive. Devaluation was ruled out by membership of the euro so Spain opted for the German solution; grinding out improvements through structural reforms of labour and product markets.
This brings us on to the second problem; the lack of demand either at a domestic or European level. Madrid’s entire economic strategy is based around the idea of export-led growth. It sees no prospect of a pick-up in domestic demand until 2015 but is confident that the economy will start to grow in 2014 because hyper-competitive Spanish goods will clean up across the eurozone and beyond. Yet the improvements in the trade balance seen so far have largely been the result of falling imports rather than rising exports. This is hardly surprising given that every eurozone state is doing what Spain is doing: squeezing the domestic economy and relying on exports to take up the slack. This cannot happen.
Finally, there is the German question. Madrid is certainly right in its assumption that Berlin does not want to blamed for breaking up the euro, but Angela Merkel has been doing her best to slow down the pace of reform.
Germany is no hurry for a banking union, let alone a fiscal union, but will do just enough to prevent a crash landing. The risk, though, is not just of a crash landing, but that the plane hits the ground with an almighty thump because altitude has been lost without anyone realising it.
The US will call on Berlin to relax its austerity policies and boost domestic demand, as G7 finance ministers meet to discuss the fragile global recovery
Jorgo Chatzimarkakis accuses Berlin of bullying EU’s poorer members and criticises Merkel’s handling of eurozone crisis
Jorgo Chatzimarkakis, an MEP with the liberal Free Democrats (FDP), the junior party in Angela Merkel’s governing coalition, says he is so “fed up with German hypocrisy” in its dealings with Europe he can no longer speak for the country.
In an interview with the Guardian, Chatzimarkakis, who was born in Germany to Greek migrant workers and has dual nationality, accused Berlin of bullying the EU’s poorer member states and indulging in the very practices it sought to stamp out.
“Germany is setting the European house on fire. I don’t want to be with those playing with fire. I would rather be with those in the fire brigade,” said Chatzimarkakis, who recently announced that he would be resigning from German politics after representing Germany in the European parliament for the past nine years.
“Germany is focused on national interests much more than EU interests,” said the 47-year-old, who did not rule out standing for re-election with a Greek party when euro elections are next held in May 2014. “It is regarded as the hegemon but is not behaving as the hegemon and that is shown by the stereotypes that are used in the Greek case and, even more, the Cypriot case.
“The Germans in their hearts believe it is OK to bribe if it leads to more profit. They have a totally different attitude to corruption as the donor [party]. Many regard themselves as not guilty if they give,” he said, listing German companies that he said handed out kickbacks to secure multimillion pound contracts. “The guilty ones are those who take … this is the sort of hypocrisy that I am personally fed up with.”
The politician said he had been left shocked by the country’s handling of the continent’s worsening economic crisis.
“Members of my own party, liberals, came up with the idea of selling Greek islands and the Parthenon because it was an easy way to win votes,” he said. “Merkel herself gave a speech to party members saying the eurozone wouldn’t survive if countries in the south continued to take long holidays. She used this stereotype and it was not backed by real data, because the reality is that Greeks, for example, work a lot longer than Germans do.”
Berlin’s treatment of Cyprus had been the last straw, he said. The island was the best proof yet that double standards in the bloc were now at play.
“Look at the money-laundering that is taking place in Germany,” he said. “It is well proved that up to €60bn is laundered in Germany every year. How can a country like Germany then accuse a small country like Cyprus of being nothing else than a criminal money-washing system and at the same time execute a whole economy within a fortnight just to send a message to German voters [in September's general election]?” he asked. “It is unbelievable!”
Such behaviour, Chatzimarkakis argued, had aggravated the growing north-south divide in Europe and contributed to the “bad climate” in the EU. It had also created a hostile atmosphere towards German politicians in the European parliament.
With its dogged emphasis on austerity as the only way out of the crisis, he claimed Berlin had become increasingly isolated and out of touch with its partners even if it remained the biggest provider of bailout funds to indebted nations in the south.
“The atmosphere has become tougher in the EP and I’m afraid we won’t be able to wait until the German elections to fix it,” averred the MEP, saying visiting German MPS on the country’s budget committee had expressed surprise that hostility should exist at all.
“A group of us met them last week and they asked us ‘is it really true that everyone is against us?’ The question, alone, shows you the level of unawareness. They think all this anger is a media phenomenon and nothing to do with reality.”
It was urgent, he insisted, that the German government not only “put things right” but stop “a very dangerous policy” for Europe and European integration.
“It should start, possibly, by apologising to Cyprus, at least symbolically,” Chatzimarkakis said. “We have a shadow state that is governing Europe,” he added referring to the continent’s increasingly dominant eurotocracy. “I am specifically thinking of the euro group, the troika, the European commission, bodies that the German government hides behind and all too often controls.”
How Samantha Cameron might have felt about the family visit to Germany
So the children missed Doctor Who because of Germany, apparently it was awesome & I know there is iPlayer but Nancy likes to live-tweet her followers? Dave went, well you can live-tweet our historicvisit to Schloss Meseberg instead, so within seconds Angela was going “please vot is the meaning of this LAME”, and Joachim was going “vot means epic sausage FAIL”? Dave’s like, who knew they were on Twitter? So I was like, haha, you know kids, oh you don’t, well it is like “sick”, what Nancy actually means is, yay, this is like being in The Sound of Music before they escape?
Well not that I would have dreamed of complaining but we never give the children processed meat, so I had to say it was pork allergies, & it was school practically the next day & so Dave had Elwen’s motte and bailey castle to do plus I should have been looking for a hat for Wednesday, total joke in this freezing little Schloss in the land that fash forgot I said to Mummy, people say Chippy is useless for clothes, trust me, compared with Germany it is literally Paris, and no, we did not discuss OKA’s new heirloom pieces, Joachim was only interested in the impact of imperialism on Granta’s Best of Young British *shudders with PTSD*.
So at least we picked up some German, eg Joachim sweetly taught me German for OMG, which is “das ist Agonie” & I think they defo learned more about the British way of life? Eg Angela could not believe we change bags every season, apparently Germans use the same one for EVER & personalised stationery is literally a foreign country to them, I’m like, Angela, seriously no offence to your tragic communist past but that is the saddest thing I have EVER heard, getting their first set of luxe correspondence cards is a key rite of passage for British teens, but a flagship Smythson store in Berlin would be an important Anglo-German statement that solved both problems overnight?
And Nancy was just starting her thank you letter when we heard they are not coming to the funeral? I said to Dave, if that is the German idea of gratitude no way are we returning that bathrobe.
Eurozone crisis: Slovenia rejects bailout talk as Soros urges Germany to accept eurobonds – as it happened
Slovenia’s PM pledged to fix its banking crisis without international help, as billionaire investor and philanthropist George Soros argued Germany should accept mutualised eurozone debt
Merkel is tired of being viewed as a sadist bullying the eurozone. But her political convictions won’t let her change course
With the eurozone now entering its fourth year of economic crisis, Angela Merkel has become quite used to attacks on her character and smears about her politics. Hitler moustaches are common accessories for protesters wherever the German chancellor travels in southern Europe; Nazi stereotypes are back in fashion to portray her, as is the image of Angela the booted dominatrix, bullying Europe into submission.
And now even her love of the Gulf of Naples and springtime in Italy has been tarnished; her most recent private trip there last month wasn’t much of a holiday – paparazzi took pictures not only of her but of her husband’s son and grandchildren, who cherish their anonymity. The chancellor was not amused on opening the local papers and finding herself climbing into the Aphrodite thermal spring in a bathing suit. Europe’s most powerful politician barely clothed – that’s not Merkel’s idea of privacy.
Behind closed doors, she admits that she is tired of being branded a money-hoarding sadist, steel-hearted and merciless. But her deep political convictions about the nature of the crisis simply won’t allow her to change course.
The chancellor and her small inner group of advisers constantly question the logic of their strategy for battling the crisis. But Merkel, being an extremely systematic thinker, always comes up with the same answer: there is no option but to stick to the twin package of incentives and reform in order to bridge the huge gap in competitiveness that lies at the core of the crisis. From her perspective the trouble doesn’t necessarily stem from the constraints of austerity. Europe’s malaise is that it has a single currency but no comparable unity on fiscal, labour and tax policies. Were she to ease up on the message of austerity, she would also have to relinquish any leverage in getting her ideas of a more cohesive European political union implemented.
In this brutal test of will Merkel is not only under pressure from her peers in the eurozone. Increasingly, the German public is getting frustrated with the stubborn refusal of the crisis to resolve itself. Merkel has to calibrate her message carefully because of elections in September. Even though she might be prepared to accept a grand bargain – relief for debt-ridden countries if Germany gets a politically modernised eurozone in return – this will not be the outcome she wants Germans to be digesting in the weeks ahead of the election. Their patience is wearing thin.
A recent study by the Deutsche Bundesbank demonstrated that, contrary to expectations, private wealth in the crisis-hit southern eurozone countries is much greater than in Germany. It seems the Germans forgot to fill their pockets while credit was cheap.
And don’t underestimate the damage done by the constant barrage of Germany-bashing and Nazi comparisons. Being at the centre of the European blame game, and suddenly having to cope with a new semi-hegemonic role, isn’t that easy for a nation that was happy to linger in the shadows of history after spending too much time in the blazing sun.
Merkel is constantly weighing up her options. She cautiously tests the strength of the social fabric, domestically and abroad, in case it might begin to tear. Her plan is for a better and more just Europe. Not with Germany at the helm, but with Germany’s economic model certainly centre stage. So why is she not putting that message across? Why is her entourage so bad at managing her image, let alone her big plan for Europe?
Even if they could, they don’t want to. The chancellor thinks that all necessary arguments are out there. She is tired of repeating her mantra of reform and incentives. She has given major speeches setting out her plan in the Bundestag and in the European parliament. And she refuses to ask for a slot on primetime TV to outline her views once more, for fear of overburdening her voters and raising too many expectations. Getting self-righteous certainly won’t make the crisis disappear, and Merkel would undoubtedly be measured against her own words in the future if she chose them rashly. Just as she hates being compared to Margaret Thatcher, even as that leader is eulogised, she dislikes being caught out by her own words.
Neither does Merkel share the huge personal affection for Europe felt by her predecessor Helmut Kohl. Her political education didn’t include tearing down border checkpoints between France and Germany. Merkel came into the EU pretty late in her life after spending 35 years behind the iron curtain. She has seen a system collapse, and is deeply convinced that Germany needs a unified Europe, not only to battle the ghosts of history but to help the entire continent survive the great game of globalisation.
This crisis doesn’t call for winners and losers, but for give and take on both sides. At some point Germany will have to step up to the plate and chip in more than guarantees for bailout funds. When that moment comes, Merkel will want her own guarantees that the euro will no longer be threatened by bubbles in finance or housing, unbalanced budgets – or timid governments shying away from reforms.
Heavyweight nations snub PM’s plans to defuse the Conservative party’s civil war over Europe
David Cameron’s “grand plan” to defuse the Tory civil war over Europe by winning back powers from the EU has been thrown into doubt after Germany said it would prefer to solve the eurozone’s problems without a new European treaty.
In a blow to the prime minister, who has pledged to renegotiate UK membership before calling an in/out referendum in 2017, both Germany and France are now coming out against opening up the EU rulebook again in the timescale envisaged by Cameron.
In his keynote speech on Europe in January, Cameron said he believed the “best way” to secure the “changes needed for the long-term future of the euro and to entrench the diverse, competitive, democratically accountable Europe that we seek” was through a new treaty. If such a process were to be undertaken, all member states would be able to table their demands for changes to the way the EU operates.
The UK would be able to exert strong leverage by wielding the threat of a veto unless it won the right to a looser relationship in areas such as social and justice policy. But since hearing Cameron’s pitch, Germany and France have come out firmly against what they believe would be an interminable and hugely complex negotiation among the 27 member states, which they fear could involve members spending much of their time debating UK concerns.
A spokesman for the German government made clear that, while Berlin would back treaty changes if deemed necessary, it felt it would be better to avoid such an inevitably lengthy process. “We want to achieve a functioning, efficient and prosperous eurozone,” he said. “For that we’ve started a process with our partners to agree on the necessary steps to achieve this goal. If these steps cannot be realised without a treaty change, we’ll go for it. If these steps are achievable within the existing treaty framework, so much the better. It will save us much time.”
Berlin and Paris, in a further sign of irritation at the UK’s approach, have snubbed an offer to take part in an exchange of views with the Foreign Office on whether some EU powers should be returned to member states as part of a “review of competences”, it emerged last week. Charles Grant, the director of the politically independent Centre for European Reform, who has held talks with senior officials in Berlin and Paris in recent weeks, said there was “no chance” of a new EU treaty in time for Cameron to hold a referendum in 2017, even if he was still in No 10.
“The French and the Germans have cooled on the idea of rewriting the treaties, for four reasons,” Grant said. “One: they want to spike Cameron’s guns, and deny him the leverage that a big new treaty would give the British. Two: though the eurozone still has many problems, they think the chances of a breakup are minimal, so there is no need for a dramatic leap forward to some sort of ‘political union’.
“Three: although rhetorically many Germans favour a federal future, when they think about what it would mean in practice – financial transfers to the south – they get cold feet and prefer the status quo. And four: many countries – above all France – worry about the difficulties of ratifying a new treaty. Some, like Ireland and perhaps France, would have to hold referendums.” Grant said that Germany backed a limited treaty change which would allow euro member states that renege on promises of reform to be punished. But it was clear that the French would not accept such changes unless Germany agreed to a eurozone budget, or the mutualisation of eurozone debts, both of which would cost it money, making it highly unlikely.
Grant added: “Even if there was a move to amend one or two articles, the UK would not gain leverage: Britain’s partners could bypass a veto as they did with last year’s ‘fiscal compact’ treaty, which was negotiated outside the framework of the EU.”
Government sources said the prime minister still believed he could achieve a better deal for the UK whether or not there was a new treaty.
My family’s experience shows how easily Greeks and Germans forget what they have in common
I recently bumped into a cousin in Switzerland. I hadn’t known she even existed – she and I never moved in the same family circles when I visited relatives in Athens. But since the start of the crisis, Greeks abroad have become more aware of their family trees. My relative completed a degree in Germany 25 years ago and returned to Greece to get a job in the food industry. Two years ago she was made redundant. For 18 months she tried to find work, then gave up and begged her mother to call her contacts in Germany – such as my father, her cousin once removed, who helped her move to Germany, and from thereon to Switzerland.
Although the German parliament should on Friday pass a deal that eases the pressure on the Greek economy, many Greeks have gone back to doing what they have always been good at: they activating networks of relatives in the diaspora and moving abroad. Statistics released this month show that Greek migration to Germany has shot up almost 80% in the past few years. They are a different breed to the unqualified workers from rural areas who moved abroad in the 1960s, however: the new migrant comes from one of the crisis-hit cities and has a bagful of degrees and qualifications.
In this respect, the Greek disaster is a German boon: the brain drain from the Mediterranean is helping to plug Germany’s chronic lack of qualified workers. And yet Greeks who arrive are rarely welcomed with open arms at German borders. A large part of the population still insists that “we” will end up having to cough up for “their” welfare. Out come all the old cliches: haven’t “those Greeks” always been feckless layabouts? People empathise with the situation in Greece but often wouldn’t want to go as far as letting out their flat to a Greek family.
Accepting that migration is once again part of the Greek experience isn’t easy for Greeks, either. Expectations are higher than they used to be. In the 90s, Greece had managed to turn itself from an emigration into an immigration country (even if not a particularly welcoming one, as the rise of Golden Dawn shows). In 2004, when Athens hosted the Olympics and the Greek football team won the European Championship, it briefly looked like the country had finally arrived in Europe. That dream has now come to a sudden end: in the eyes of most Europeans, we’ve been pegged back to “oriental” levels.
I grew up in Germany with a Greek father and a German mother, and I find it relatively easy to look at the situation from both sides of the divide. But for Greeks in Greece to accept partial responsibility in their downfall isn’t easy. Greece experienced modernisation, but no real reforms. Mentally, it never kept up with economic progress. The EU and the euro arrived and living standards rose, but in politics the same old family structures remained intact, tourists were served the same old souvlakis and moussakas for notched-up prices, and the country continued to consume, “Balkans-style” – as if the whole dream could be over by tomorrow.
Analysing what really happened during the boom years is much harder than blaming the big bad Germans, those heartless, work-obsessed robots. Of course you can question Angela Merkel’s austerity politics. And there’s no question that some Germans – much like many Greeks – have simply failed to grasp where the European project is at: there’s a widespread and enormously inflexible fixation with savings, wage restraint and fighting inflation that is simply outdated.
But ultimately Germany and Greece are simply opposite poles at a new phase of European integration. If you look at the relationship between the two countries from a distance, the overwhelming impression is not of a culture clash but a historical enmeshing. You only have to remember that the blue-and-white Greek flag is based on the colours of the state of Bavaria – whose Prince Otto became the first king of independent Greece. These shared links and influences – all too quickly forgotten – should be the starting point for solving Europe’s problems.
Europeans are currently going through an astonishing learning curve: Greeks are coming to terms with the fact that the European Union isn’t just the friendly aunt from the distant west that sorts out our infrastructure but that it can make demands too. And Germany is slowly starting to grasp that the EU can’t just be an export market with a stable currency. A union also has to involve solidarity with people who don’t speak the same language as you.
In that respect, the crisis could be an opportunity to complete European integration. But that chance will come and go if we don’t get a glimpse of a light at the end of the tunnel. I am pleased that the Bundestag will, in all likelihood, pass a measure on Friday to cut Greek’s debt mountain by €40bn. For the short term such measures are important, but in the long run “rescue packages” are no recipe for a Europe in which Greece and Germany can coexist happily.
Translated by Philip Oltermann
The debate over neonicotinoid insecticides has reached a crucial point, with MPs grilling chemical firms, out-of-date rules failing to protect nature and a row over scientific research
Fifty years ago, Rachel Carson published Silent Spring, a stunning revelation of the death of swaths of birds and insects that had been poisoned by pesticides in farmers’ fields. Half a century on, a fast-growing group of scientists, politicians and campaigners fear a second, more subtle silent spring is killing the bees and other insects that pollinate one-third of everything we eat.
On Wednesday, executives from the agrochemical giants that make insecticides face a public grilling from MPs over accusations of secrecy and out-of-date rules that are failing to protect nature. They are certain to fight back, saying that the crop protection offered by the multibillion dollar industry is vital in producing cheap, plentiful food and that the science remains uncertain. Both sides accuse the other of scaremongering, but with the European authorities accepting that current “simplistic” regulations contain “major weaknesses” and the UK government being forced to accelerate its deliberations, the debate has reached a crucial point.
“The government claims it is adopting a precautionary approach to protect bees and other pollinators, while at the same time demanding ‘unequivocal’ evidence before taking action,” said Joan Walley, chair of the environmental audit committee, which is conducting the inquiry. “We will explore this contradiction, because up until now ministers appeared to have taken the pesticide companies’ word for it that their products are not that bad for bees.”
The stakes are high and the issue is complex. The neonicitinoid insecticides being investigated by MPs are used in scores of countries across the world, including more than 1m hectares in the UK.
“But wild bees and other pollinating insects are known to be declining in the UK and elsewhere,” said Lynn Dicks, at the University of Cambridge, with up to three-quarters of species declining by more than one-third each decade. The total loss of pollinators would cost the UK hundreds of millions of pounds a year, according to parliamentary research. The insects also suffer from starvation as meadows and other habitats are ploughed up, and from diseases and parasites, such as the varroa mite.
A flurry of peer-reviewed studies in 2012 have singled out the harmful effects of neonicitinoids, from making bees lose their way home to failing to produce enough queens. But a scientific row has blown up, with the chemical companies and UK government questioning whether the studies were realistic.
“The response is focused on trying to pick small holes and then using them as a justification for inaction,” said Prof David Goulson, at the University of Stirling, who published one of the key studies. “But in practice it is impossible to carry out the ideal study: there are no areas without neonicotinoids in Europe. If the government is waiting for the perfect experiment, they will be waiting a very long time.”
Criticism that laboratory-based studies are unrealistic is wrong, according to Christopher Connolly, a molecular biologist at the University of Dundee: “I consider this claim totally unprofessional and lacking all scientific credibility. Laboratory studies … identify real and quantified threats.”
The chemical companies say they have data to show the safety of their products, but it remains secret. “There is a lack of transparency,” said Dicks.
James Cresswell, a scientist at the University of Exeter and part-funded by pesticide maker Syngenta, argues that there is not enough evidence currently to change neonicitinoid rules, but agrees transparency is a problem. He was only permitted to see some regulatory data under supervision and was not allowed to make any copies.
Syngenta said the problem is “very limited protection” to prevent data being exploited for commercial gain by competitors, although it admitted the data does not contain secret chemical formulas. Bayer told MPs that a study of 1,200 hives in Germany demonstrated the safety of neonicitinoids, but Goulson pointed out that only 215 of these were screened for pesticides and that the study was industry-funded.
“The potential inadequacy of the regulatory process is the thing that worries me the most,” said Tim Lovett, director of public affairs and former president of the British Bee Keepers Association (BBKA). “I think all the regulators have been remarkably silent.”
The BBKA has been attacked for not taking a stance on neonicitnoids, but Lovett said: “We adopt a very difficult position in truth – sitting on the fence – and it is very uncomfortable. But we don’t have the scientific expertise. We just want the regulators to do their job. They are paid to do this and we are trying to keep them honest.”
Evidence submitted to parliament cites a long list of failings in current regulations. Perhaps most serious is that it is only the effects on honeybees that are considered, despite 90% of pollination being performed by different species, such as solitary or bumblebees, hoverflies, butterflies, moths and others. Another is that the regime was set up for pesticide sprays, not systemic chemicals like neonicitinoids that are used to treat seeds.
Even the National Farmers Union (NFU), which argues that there is no need for change, admitted: “It is very well known that the current pesticide risk assessment systems for bees were not developed to assess systemic pesticides.”
Nigel Raine, at Royal Holloway, University of London, highlighted other failings in a recent study. First, insecticides are tested singly, despite the European regulator reporting that “pesticides are often applied in tank mixes (two to nine active ingredients at the same time)”.
Tests also wrongly focus on individual insects, according to Connolly: “For social insects, it is the colony that is the breeding unit and the most important.”
Goulson said as little as 2% of the neonicitinoids applied to the seeds actually ends up in the plants. “There is an urgent need to establish the fate of the other 98% and to find out what impacts they might be having on the environment,” he said.
However, if the government was persuaded to suspend the use of some neonicitinoids, as has happened in France, Italy, Germany and Slovenia, the question is raised of what should take its place in protecting crops. In Bayer’s submission, the company praises the promise of genetically modified plants, while the NFU raises the prospect of a return to more damaging sprays.
Nick Mole, at Pesticide Action Network, said that the Italian ban “has not led to any pest problems or any loss of yield or profit. It is alarmist scaremongering from the people profiting from treated seeds.”
There is rare agreement from all sides that natural predators of pest insects should be encouraged by growing flower-rich margins around fields.
The most recent assessment from the UK government concluded in September that the new studies do not give “unequivocal evidence that sub-lethal effects with serious implications for colonies are likely to arise from current uses of neonicotinoids”.
But now the environment secretary, Owen Paterson, has asked his experts to “speed up” the field studies being conducted. “The health of our bees is a real concern,” he said. “Once we have the full picture in the new year I will ask independent experts to give us an up-to-date view on the safety of neonicotinoids.”
Cresswell said the problem is far greater than a single study: “There is a dearth of fundamental knowledge. Strong lab knowledge can inform, but we don’t even have that. There is a virtual total lack of data on [neonicitinoid] residues in pollen and nectar.”
For Lovett, this is the silence that needs to end: “For god’s sake, let’s have some proper studies.”
Herman Van Rompuy postpones negotiations after member states fail to resolve differences
European leaders face a grinding round of negotiations over the next three months to agree a new seven-year budget after the EU summit collapsed in Brussels amid a clash between rich and poor nations.
Herman Van Rompuy, the president of the European council, threw in the towel after an alliance of the EU’s richest countries, led by Britain and Germany, declined to accept a €971bn (£786bn) budget for 2014-2020.
The decision to abandon the talks, which will lead to another emergency budget summit early in the New Year, will transform the position of David Cameron who arrived in Brussels amid criticism that he is wholly isolated in the EU.
The prime minister joined forces with Angela Merkel, the German chancellor, Mark Rutte, the Dutch prime minister, and Fredrik Reinfeldt, the Swedish prime minister, to say the proposed budget was too large.
Merkel was understood to have been furious with Van Rompuy and José Manuel Barroso, the European Commission president, for an attempt to try and isolate Britain.
Speaking after the summit broke up the prime minister said: “It has been very heartening that, as well as myself arguing for significant reductions and being on the side of taxpayers the Swedes and the Dutch have made very strong representations too.
“I think attempts there might have been to try and – ‘well, let’s just put the British in a box over there and try and do a deal without them’ – well that didn’t work.
“There were other countries I have worked with together were making sure that we were all standing up together for taxpayers and to make sure we have a fair outcome to this budget when we are cutting our budgets at home.”
Van Rompuy had informally proposed lowering his €971bn budget to €940bn according to the “payment ceiling” which covers the money the EU would distribute rather than the higher “commitment ceiling”. This is described by Britain as a credit card limit.
The prime minister argued for a further cut of €50bn in the proposed €940bn budget, taking it closer to the original British demand of a €885.6bn budget. The Dutch demanded an even bigger cut of €100bn. Merkel was keen to see further cuts on the Van Rompuy proposal, though she believed that the €50bn suggested by Britain went too far.
The summit highlighted deep splits between rich “contributor” nations and poorer “recipient” nations.
France was the key swing country. It is a net contributor but François Hollande was determined to protect billions of euros in agricultural payments. Van Rompuy proposed increasing the Common Agricultural Policy (CAP) budget by €8bn overnight. This was unacceptable to the Netherlands.
Cameron radiated satisfaction with the deadlock, but he was helped enormously and surprisingly by Merkel who blocked all attempts to isolate the veto-wielding prime minister and so prevent a much worse bust-up.
British and other senior officials said that Merkel, who saw her role as the central mediator in balancing the conflicting interests and crafting a compromise, came down strongly on Cameron’s side in pushing for greater spending cuts, and supported awarding him a symbolic victory by cutting the costs of EU administration and civil service.
The Merkel backing for Cameron brought French complaints of the surprise emergence of a “Berlin-London” axis. But if this appeared to have some foundation, the alliance was directed not against Paris but at Brussels.
Participants confirmed that Merkel concluded that Van Rompuy and Barroso, who were running the summit, were pursuing a deliberate strategy of trying to quarantine Britain in the budget battle and produce a 26 against one situation in which Cameron would have been forced to play his veto.
She told the summit yesterday afternoon that if there was going to be an agreement “it has to be at 27.”
The charge against the Van Rompuy-Barroso duo was that they were ignoring Cameron, acting as if he was not even in the room, engineering a situation where the British felt unwanted.
A Cameron veto would have torpedoed the seven-year spending programme, forcing EU leaders into messy negotiations every year over a new annual budget. Merkel was desperate to avoid that scenario.
“She’s been very supportive,” said a British official.
“People are unhappy with the way this summit was organised.”
There may, however, be a price to pay for the help. Next month’s summit is supposed to reach agreement on making the European Central Bank in Frankfurt the new banking supervisor for the eurozone, a policy to which Britain has serious objections and over which it is seeking concessions from the 17 countries of the eurozone led by Germany.
Cameron may find that Berlin will be less accommodating on British demands on the budget when they return to grapple with the issue in the new year unless he shows more flexibility on the banking union in three weeks time.
EU leaders will be keen to reach an agreement on the 2014-2020 budget because it will revert to more expensive annual budgets if no deal is reached.