Saturday, February 09, 2013

Progress in Europe

The proposal by the European council of ministers to propose a new EU budget under which the EU's total spending limit would be reduced for the first time in the organisation's history is a significant achievement for David Cameron.

As the Daily Telegraph put it, under the headline

"Victory for David Cameron as EU budget faces cuts for first time in history.

"Europe's leaders are poised this morning to cut the European Union's budget for the first time in its 56 year history following a major victory for David Cameron."

David Cameron worked with Angela Merkel and the leaders of a number of Northern EU member countries to get the budget under control, in the face of fierce opposition from the French president and leaders of a number of other governments such as those of Italy, Spain, and Poland.

The proposal which eventually emerged from the Council of Ministers represented a significant victory for Cameron and Merkel as the proposed budget ceiling was trimmed by £30 billion from the equivalent of £830 billion to the equivalent of £800 million (the actual limit proposed is 904 billion Euros).

There are a couple of caveats. The first is that this deal still has to be approved by the European Parliament. Some members of the socialist group in the European Parliament (which includes Britain's Labour party) are threatening to veto the deal. It will be interesting to see whether Britain's Labour MEPs will vote the same way Labour MPs did when this vote comes up.

Since Labour MPs were whipped to vote for a British negotiating position of cutting the EU budget - which against all odds, is what a British Conservative Prime Minister managed to get the EU council of ministers to propose - it would be absolutely ridiculous if British Labour MEPs then voted to veto the cut which their Westminster colleagues had called for. Let's see how the Labour delegation, and indeed all Britain's Euro MPs, vote on this issue.

The second caveat is that, although it is proposed to cut the spending limit, and actual spending will almost certainly be lower than it would have been if this had not been done, the actual sum spent by the EU will not necessarily fall in proportion.

The reduced payments figure is a ceiling or cap, and historically so far, the real spending and national contributions have been  5% to 10% below it.

With the limit being reduced, it is possible that actual spending may be much closer to the actual limit than this 5% to 10% margin. It is even conceivable that spending and national contributions might rise slightly.

This absolutely does not mean that fighting for a lower cap and to keep the EU budget under control was a waste of time. Had this not been done the budget, actual expenditure, and Britain's conribution could have gone up a lot more than is now likely to be the case.

So this is progress. But there is a long way to go.

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