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Posts tagged with: EU Budget

The EU spends 40.4% of its budget on agriculture. EU support for agriculture is 0.404% of GDP. Or €51.1 billion. Take your pick.

If you’re astute you will realise that all the numbers in the heading of this blog entry are the same. They are different ways of saying the same thing, namely the amount of money the EU spends on what is called in the Financial Perspectives “Agricultural price support and rural development”, i.e. the CAP. The numbers are for 2013 financial perspectives, and are taken from here.

Now think about how a national budget is debated. Do you hear phrases like “it’s unacceptable that welfare payments make up 17% of the UK budget”? No, because we do not talk about the budget in relative terms. We instead tend to argue for more or less spending in a particular area, according to need, and for a higher or lower budget (and correspondingly lower or higher taxes). A summary of UK public spending can be found here, also showing that the UK spends more on just healthcare than is the total size of the EU budget for the whole EU.

So then, rather than asking whether it is right that agriculture makes up an arbitrary percentage of a legally constrained number (40.4% of €126,646,000), how about asking an alternative question: is it right that €51.1 billion of EU funds are allocated to agriculture, and that EU plus national support for farmers together comes to under 1% of GDP (OECD figures, P 9 here, via @CraigJWilly)? And then ask whether how that money is spent, and whether it is spent correctly and appropriately?

[Two caveats to the above: I am just using numbers from the financial perspectives – due to GDP contraction, and difference between commitments and appropriations in the EU budget the numbers may vary a little. Second, I have no idea what farming policy the EU actually needs (I’m not a farming specialist), but that’s the first question we need to answer, not to look at the % of EU funds committed to farming]

Nicholas Watt falls for EU Fresh Start ruse from a report that’s not publicly available

On the Guardian website today there’s a piece entitled “David Cameron to warn François Hollande against challenging EU rebate” by Nicholas Watt. At the start it’s a bit of a ramble, essentially that Cameron will need to push François Hollande on the UK’s budget rebate to try to stick to the broad lines of an agreement supposedly struck with Sarkozy – that the UK rebate will remain intact if the UK does not challenge CAP spending to the anger the French. So far, so predictable.

Then – for reasons that are not altogether clear – Watt goes on to mention that Cameron is under pressure over the 2014-2021 financial perspectives. We’ll ignore that it will actually be the 2014-2020 perspective that a quick Google search would have revealed. The focus is particularly on a report by EU-sceptic Tory Andrea Leadsom MP that claims that £16.8bn could be reduced from EU structural funds, i.e. nothing to do with agriculture and the rebate which was initially the topic of the piece.

Further, the paper to which Watt refers does not seem to have been published yet – there is no word about it on the EU page of Leadsom’s website, nor on the Structural Funds page of the EU Fresh Start website. Indeed the link to a structural funds report there actually incorrectly links to a structural funds report by Open Europe, so – just to be sure – I looked at Open Europe’s Research page too, and at the time of writing there’s nothing there either.

So then, let’s have a look at the paragraph about Leadsom and structural funds written by Watt:

In a chapter of a new green paper, to be published by the Fresh Start group, Leadsom says that structural funds should only be distributed by the EU to countries whose gross national income is less than 90% of the EU average. Britain would have been handed back £13bn of the £33bn it contributed during the current budget period from 2007-2013 had the plans been in place then. The £9bn spent in Britain on structural funds would have been administered in Britain while a further £4bn, spent on relatively rich EU regions, would have been repatriated to Britain. The remaining £20bn would have remained with the EU to distribute to poorer regions.

The essential point is that structural funds would be determined on a country by country basis, instead of a region by region basis. This would mean that the UK would not receive any structural funds for its poor regions whatsoever. The £9bn that Leadsom refers to would then be administered in Britain, but I very much doubt poor regions in South Wales or the North West would have seen anything like the full amount of it. Further, the £4bn “spent on relatively rich EU regions” is not an accurate statement – it should be rephrased as “spent on poor regions of relatively rich Member States”. There is then the additional presentational problem here – by taking the structural funds alone, the figures above (as far as I can tell – but hell, the report is not available, so I can’t check) do not count in the UK’s budget rebate. The final line implies a net contribution of the UK to structural funds of £20bn but taken alone that’s a rather meaningless figure without seeing the UK’s net contribution to agriculture, foreign aid etc.

So well done Nicholas Watt. You win today’s prize for lazy EU journalism.

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.