The EU budget row - that isn't

The UK and France both know in advance the outcome of this ostensible 'row', and probably have quietly choreographed the whole ritual to that end

Are Cameron and Hollande really looking in different directions?
Charles Crawford
On 23 November 2012 10:20

OMG!!!! The European Union is having another massive Budget row over spending up to 2020. It is all going to end in disaster! The UK will be isolated!

Those of us who have taken part in these battles have a clear and principled answer to those wild headlines.


What is really happening?

The key negotiation-within-a-negotiation here is (as ever) the UK v France.

The UK calls for budget restraint. Partly because it has a strong point in objecting to more EU-level spending when having to make (or at least pretend to make) cuts at home. Partly because the EU Budget has inexorably grown over the years (albeit still to a small fraction of EU collective GDP), and sooner or later a time has to come when enough is deemed to be enough.

The problem is that countries want different things from the Budget. The Brits want far more EU money to go towards investing in the future (innovation, knowledge, hi-tech networks, energy infrastructure). The French like all that, but they like even more the Common Agricultural Policy (i.e. investing mainly in the past): who needs those mountains of turnips dumped in the Champs-Elysées?

Thus the problem; if the Budget is kept at something like its current level, we get no serious change in the balance between new and old spending as long as France refuses to budge on tough-love CAP reductions (i.e. indefinitely).

The European Commission of course tries to give everyone something – by increasing the Budget! The Commission argues its case craftily. The UK gets more EU good spending. France does not have to give up bad spending. A fair compromise? Mais oui! Victoire! Solidarity! Wild applause from the European Parliament and from lots of countries that hope to get free stuff.

This time round the UK is insisting on what passes for restraint in EU budget circles. So (says London) any 'good' new EU spending (innovation, knowledge) has to come at the expense of 'bad' old EU spending (mainly the CAP) and plump Eurocratic privileges.

France and other CAP nostalgistes (Note: including Germany to some extent) hoot in rage.

The Commission heaves a tragic sigh. It knows – as it has always known – that only way for the deal to be done is to cut most proposed good spending and tweak everything else. So they proclaim huge cuts in the budget to achieve a compromise, when in fact they are only ‘cutting’ a proposed budget (not the same thing at all, although it is amazing how many pundits gets this wrong).

The French and others noisily blame the UK for blocking EU growth and innovation and 'selfishly' guarding its rebate, when as they all know well the UK rebate is a vital lever in stopping the madness exploding.

The point here is that most EU members think that they can get away with whining at the UK, as the UK does not appear to mind that much. Whining at France (the real source of the problem) just leads to French vindictiveness and sulking on an undesirable scale.

Mass whining at the UK duly ensues.

Result? UK 'isolated'. But when the final deal is done the UK has kept the Budget at something like its current level, a significant achievement by the standard of judging such things – it has never happened previously.

David Cameron proclaims victory; UK voters briefly lift their blank eyes from trashy reality TV shows and nod surly acquiescence.

France pretends to hate the outcome but is pleased at safeguarding its farmers’ fat subsidies and at not having to pay more into the common pot. Nothing much changes, an outcome that suits a few large EU governments but further erodes EU global competitiveness.

The UK and France both know in advance that this is going to be the outcome anyway, and probably have quietly choreographed the whole ritual to that end, with some quiet support from Germany. The Big Three have a quiet celebratory drink of posh French champagne (never forget, the CAP has its good points) and move on to fight the next pseudo-battle.

Simple, really.

Charles Crawford is a Contributing Editor to The Commentator. A former British Ambassador in Sarajevo, Belgrade and Warsaw, he is now a private consultant and writer. Visit his website and follow him on Twitter: @charlescrawford

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