EU budget: adding to the gaiety of nations!

Was it only on 27^th October that I wrote about the EU being back on the political front-page after being verboten for years as a topic for polite conversation?

 

Well, it was back with a vengeance last night when Cameron got hammered over the EU budget vote.

 

So what’s it all about?

 

For starters, it’s about €3 trillion (that’s right – trillion). That’s the size of the7-year budget proposal. The cost to the UK is £144 for every man, woman and child. Of this no less than 40% is spent on agriculture, the lion’s share going to wealthy agro-business, rather than to small farmers.

 

Winners include Poland, Hungary, the Baltic states, and the East Europeans. Losers are Germany, France, the UK and Italy. Italy in particular is between a rock and a hard place, since its economy and public finances are dire at a time when it could be facing a very large increase in its contribution.

 

The European Parliament is another player in this trillion euro poker game.

 

It wants more of its ‘own’ money to spend, independent of member states. It says that it will veto the whole budget if it doesn’t get its own way. But the reality is that they wouldn’t have the bottle – they are not overly-popular as it is.

 

Then there is the European Commission wanting its own large slice of the pie. Its proposal stacks up to €1091 billion, an inflation-busting 6%.

 

If Dave gets the ‘freeze’ he wants the UK contribution could actually rise by €2.4 billion over the 7-year budget period.

 

If the budget is vetoed, the existing budget would be carried over, plus  2% inflation allowance. The next step could be to present a completely new budget, and under the EU’s arcane procedures this could be carried by a majority vote.

 

So Dave’s veto would be ineffective. Actually, not quite. Getting a new budget through would take forever and a day. They would have to decide no less than 55 separate spending areas. The new member states could lose out badly, as the current budget proposals would give them proportionately more money.

 

Expect this story to run and run.

 

Meanwhile we must sit back and enjoy watching the whole politically and financially unsustainable monster tear itself apart.

 

As Confucius said ‘ few things are more agreeable than seeing your neighbour fall off his roof’.