Politics: Show Me The Money

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Our political correspondent Catherine Feore takes a step back and asks if the EU is value for money.

Over the past couple of years, prime ministers have lined up in the European Parliament to lay out their vision for the ‘Future of Europe’. The very same people have elaborated a Strategic Agenda with financial consequences: strengthened border and migration enforcement, a super-charged Erasmus+, our very own European Defence Fund, and a significant boost to research and innovation to improve the EU’s competitiveness. In July, Ursula von der Leyen won the support of the European Parliament based on an ambitious programme, including the idea of a Sustainable Europe Investment Plan supported by €1 trillion of investment. What’s not to like?

Reality bites: As any politician knows, it is more difficult to find money than to think of ways to spend it. Which brings us to the seven-yearly battle of the budget for the 2021-2027 period. The European Commission blew the bugle-horn in May 2018 with its proposal, and there have been a few skirmishes since then. However, the real combat begins at the December Council, when the Finnish Presidency will add figures to the ‘negotiating box’, and at this point the debate turns from lofty aspirations to brass tacks.

In 2020 we will witness the unedifying spectacle of leaders taking out their ready- reckoners and brutally fighting to the early hours of the morning for what is in it for them. If you lob a few percentage points off the Common Agricultural Policy (CAP), what will it mean for your farmers? And could it be compensated for by a concession elsewhere? It’s not pretty and it has resulted in some frankly odd ‘solutions’.

There are a range of diverging views from the ‘Frugal Five’ who want to cap the budget at 1% GNI, a group that includes Germany, the Netherlands, Sweden, Denmark and Austria, to the European Parliament, which says that nothing less than 1.3% GNI will do.

Less than a cup of coffee – a lot less: What will it mean for the man in the street? Well, the Commission estimates that it will cost the EU citizen on average €0.79 per day, compared to the 2014-2020 sum of €0.66 per day. Seriously! Are we really not prepared to fork out this tiny amount for things that collectively make our lives so much better, and where there are massive efficiencies in acting together? Where literally every country benefits to the tune of on average 6% GNI from the Single Market? Where else can you get this sort of return on your investment? Please bear this in mind the next time you are buying a €2 coffee, and blush for your government.

The additional budget items will improve our climate, security, defence and competitiveness. Leaders should nonchalantly wink over their shoulders, while flicking their hair and saying to their citizens: “I’m backing this budget, because Sweden/ Austria/Denmark is worth it!”

‘I want my money back!’: One of the dilemmas the EU has faced in its proposal is how to take account of the loss of the UK contribution to the budget, the ‘Brexit gap’. This will be met by significant cuts to the percentage of funding that goes to agricultural policy and cohesion funding, an increase in own resources, a small increase in the contribution of EU countries and the phasing out of the palpably unfair rebates enjoyed by the ‘Frugal Five’, the very same.