EU Money and Bullshit

by George_East on October 28, 2014

david-cameronAlthough you have to admire the mischief-making timing of the demand from the EU for a further £1.7 billion from the UK, David Cameron’s foot-stomping red in the face outrage is so overdone as to be laughable. If only we had a less credulous press.

Let’s take a run through the process. Contributions to EU budgets are set in advance based on a projected performance of each member state’s economy.   Once the actual performance becomes known then there are clearly going to be some states whose economy has done better than expected and some that have done worse.  As a result there are balancing adjustments.

George Osborne has been crowing about his own economic genius pretty much all year, as the UK economy has indeed grown more quickly than was expected (average wages are still tanking, but that is for another day).   France and Germany have done less well than expected (as a result of the continued insanity of ECB monetary policy and Germany’s deflationary instincts).  This means that the UK is required to pay more in and France and Germany are due a bit of a refund.  There is nothing inherently unfair about this as the revised contributions are neutral relative to economic performance.  As the country facing the second largest upwards adjustment, the Netherlands, recognises, this is just how the rules work.  It is a mechanical exercise not a case of targeting.

Now, if one imagines a scenario in which the British economy did less well that had been predicted when the budget was set, then the UK would be about to get the payment back. What would the chances have been in that scenario of David Cameron saying that it is outrageous that other countries in the EU were being expected to pay more and that our contribution had already been fixed.  Exactly.  None.

Which brings us on to the bullshit parts of this.   One would have thought from reading the papers over the last week that the Treasury was taken completely by surprise by the existence of this adjustment process.  This is, of course, as Ken Clarke pointed out in the House of Commons yesterday,  nonsense.  The Treasury is well aware of the rules and you can be damn sure had already done their own arithmetic.   It follows that George Osborne’s department were well aware that this was coming down the line.

Is it really credible if this is the case, that George Osborne himself was not briefed on it? If he did, are we really to believe that the tin pot Machiavelli who fancies himself as the greatest political player of his age, did not appreciate the political consequences.  David Cameron claims he knew nothing about it – and gave an absurdly red-faced press conference about it (with a lot of that frowny serious face he wheels out for such occasions).   Was he really kept in the dark by his right hand man?    Really?  Shouldn’t some probing questions about this at least be asked?

Or is it possible that there was a decision to make a choreographed political issue out of this in order to allow David Cameron to look all big and macho in taking on the nasty Europeans, in order to help with the fight against UKIP in Rochester.   We have seen it all before remember with the non-veto veto which got a brief bump in the polls for the Prime Minister, as he vetoed an EU treaty (which was then passed without us anyway) for not including an opt out for British banks of a measure which was not part of it in the first place.   The press, as I am sure you all remember, lapped that up like a litter of 8 week old kittens.

As The Guardian noted in its editorial on the subject, the most generous interpretation is that the UK government has been hopelessly negligent in not seeing this coming.   The more likely interpretation I suggest is that they have been (once again) utterly cynical.

 

{ 1 comment… read it below or add one }

Mike Killingworth October 29, 2014 at 4:46 pm

I suppose the sunny side up is that if Cameron gets to hold his 2017 referendum, it may well tear the Tories further apart than Robert Peel ever managed to do (and he did it over a trade issue, too).

I was talking to a Jewish friend earlier to-day and chanced to describe the current political scene as “Weimarization”. He wished he thought of the notion first.

Be afraid. Be very afraid.

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