Tag Archives: EU Budget

Today’s European Parliament budget move: a welcome alternative to austerity, or pissing in the wind?

The EU institutions are in the middle of their annual budget ping-pong. The European Commission proposes the annual budget, and then the European Parliament and Council of the European Union (where Member States are represented) decide on the budget.

The Commission’s opening shot for the 2012 budget, published in April this year, proposed a 4.9% increase over 2011. The Council rejected this in July, arguing for a 2% rise in line with inflation. The European Parliament has today hit back, trumping the Commission even, by proposing a whopping 5.2% increase.

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Tim Montgomerie needs some relationship with the facts before attacking the EU

Tim Montgomerie has written an astounding piece at Conservative Home, entitled “We need to address the abusive relationship rather than just stop the latest punch from Brussels“. For Tim, like many Tory bloggers, any notion of accurate reporting goes out of the window when it comes to the European Union, and foaming-at-the-mouth prejudice comes to the fore instead.

While I don’t do point by point rebuttals (for these sorts of reasons) very often, I’m going to have a go this time, as there is so much in what Montgomerie has written that’s wide of the mark.

The opening lines – that a 4.9% increase in the budget is unacceptable – is probably about the only thing that’s correct in the piece. There’s no way that is going to actually see the light of day anyway. The figure relates to a proposal for the increase in the 2012 annual budget of the European Union.

It’s worth pointing out that a real-terms (i.e. inflation not included) 1.3% increase between 2011 and 2012 has been known about anyway right since the 2007-2013 financial perspectives were agreed – see table towards the bottom here.

Montgomerie goes on, quoting George Osborne in Metro:

Unfortunately because the last Labour government signed away our veto on budgetary matters, it’s possible we won’t be able to stop all of the increase.

This is not true.

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The FT – the pin that can pop the Brussels bubble

The FT series this week looking at the EU’s structural funds is – with some caveats due to choice of words – decent investigative journalism. It takes a systematic approach to looking at where the EU’s structural funds go, and where the problems lie. For someone coming to this matter afresh it’s a decent account of the problems.

But for those of us that have been following the EU for years there’s little that’s groundbreaking here. The only new, substantive things I’ve found out are about the slow levels of spending so far for 2007-13 (although slow spending has beset all kinds of EU programmes for years), and the fact that local governments in Poland are running up debts in order to be able to release match funds from EU level.

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FT’s report on EU structural funds: some thoughts on vocabulary, openness and administrative structures


Thanks to a few tweets from @farmsubsidy and a chat with Nosemonkey yesterday I knew I had to look out for today’s FT. Their series, researched together with The Bureau for Investigative Journalism, is entitled Europe’s Hidden Billions and will look at the way the EU spends its structural funds. I’m writing this piece on the basis of only one part of the four part series, but there are some important conclusions nevertheless.

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State of Tory eurosceptic debate

Merkel, Cameron, Van Rompuy - CC / Flickr

Merkel, Cameron, Van Rompuy - CC / Flickr

There’s an interesting piece at Centre Right on Conservative Home that looks at Cameron’s posturing on the EU budget last week (making a similar point to mine about his ‘win’) but also looking more broadly at whether the EU is an important political issue for voters, and what that might mean for the future.

The main argument is that the EU is seen as such a monolithic, unchangeable beast that voters cease to care about it – it’s impossible to alter, impossible to fix, so henceforth impossible to care about. There’s an element of truth in this, but it’s exacerbated by the very sort of approach the Tories (including the author of the Conservative Home piece) advocate – that the way forward is for the UK to renegotiate, for the UK to leave the EU, or for the UK to in some way not cooperate.

The first line of the final paragraph is the important one: “Voters need politicians that lead them, that tell them what matters, what can be changed and what to simply sit back and accept” – yes, precisely, particularly at EU level. So isn’t it about time Cameron got together with Merkel, Sarko, Berlusconi and even Barroso to try to work that out? I suspect that would require a cooperative pragmatism that Cameron’s rather incapable of just now.

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The EU’s merry budget dance

EU Flag - CC / Flickr

EU Flag - CC / Flickr

The British press has been making a big thing of negotiations on the 2011 EU budget for the past couple of days. David Cameron was apparently telephoning EU leaders yesterday, and on the eve of today’s summit claimed victory that the budget would rise 2.9% rather than the 5.9% proposed. About the lower increase Cameron said “the key point is, it wouldn’t have happened without our action”. Not so.

Anyone who has ever looked at how the EU’s annual budget has been negotiated would have seen this pattern replicated loads of times. It’s a merry dance conducted between the institutions, and everyone knows the steps and the rhythm.

The European Commission proposes the budget for the coming year, and deliberately sets it high. The European Parliament likes to see the EU doing things, to generally agrees with the Commission. Then the Member States – the ones who pay 75% of the budget directly as contributions from national finance ministries – step in, and knock down the percentage rise. So everyone gets what they want, give or take a bit. Commission and Parliament get a bit more cash. Member States look like they are reigning in the Commission and Parliament.

And Cameron claims he managed that all on his own? Rubbish.

Merkel and Sarkozy have precisely the same incentives Cameron does and, you could indeed argue, incentives three times as high as Cameron’s. For 2/3 of any extra money the UK puts into the budget is going to come back to the UK in the form of the UK budget rebate anyway, and it’s not clear whether all the numbers Cameron and co are banding around take account of the rebate or not.

As for the crux of the issue – the EU budget itself – then there is a good case for proper reform, but that will all happen when the financial perspectives are negotiated for the years beyond 2013. There some sparks are going to fly for sure.

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An overview of the EU Budget (go on, give them some Youtube views)

The European Commission has put together the smart video above about the EU budget. Clearly professionally filmed and produced, I wonder whether it will it will convince anyone about the merits of the budget? Yes, OK, it’s 1% of EU GNI, that’s all very well. It’s decided in a transparent way. Good. But the problem is what the money is spent on (and the fact this this is so incredibly slow to change) – that’s down to administrative complexity.

Also isn’t a young woman doing some cooking a rather gender specific way to approach this?

Anyway, I am glad at least that the Commission is trying in part to set out how the budget works and using a reasonable video to do this. The video has only 1500 views at the time of writing – it should get more than that at least.

[UPDATE]
@erikwesselius on Twitter has pointed out this video – more balanced, but probably with a lower budget to film it.

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