Friday, 10 June 2011

Confusion from the Commission....

We have bitter battles every year trying to rein in EU budget, but these are minor compared to the battle over the next Medium Term Financial Framework. This 7 year plan will fix the EU spending parameters from 2014 to 2021.

The good news is that David Cameron has found friends with 8 other leaders who want to keep the budget down.

The bad news is that the European Parliament voted this week to take an opposite approach, MEPs voted to limits on EU spending by 5%, to stop the rebate and for “own resources” ie EU taxes. Furthermore the European Commission is arguing for a 4.9% increase in the 2012 budget and no doubt will be weighing in with demands for more in the following years

For months we UK Conservatives have been trying to persuade MEPs that whilst national governments are forced to reduce spending at home back it seems only reasonable to also reduce. or at the very least contain, the EU budget.

It appears the Parliament is full of deficit deniers. One of my colleagues even heard the President of the Parliament claiming that only 4 European Countries are cutting back.

This week another part of the European Commission published its advice to Member States on their fiscal plans. On the long slow train back from Strasbourg I decided to read what they said.

There are 27 countries in the EU, 24 when you strip out those that have needed bailout countries (Greece, Ireland, and Portugal). The commission has not categorised the others but this is my interpretation of their words.

Seven Countries are correcting excess deficits and the Commission thinks they need to reduce yet more (Austria, Bulgaria, Cyprus, Hungary, Latvia, Slovakia, Slovenia),

Four Countries are correcting excess deficits and the Commission thinks they may need to do more or are exposed to some element of high risk (France, Poland, Spain, UK)

Nine Countries are correcting excess deficits but the Commission thinks that they should be able to meet their correction targets (Belgium, Czech, Denmark, Germany, Italy, Lithuania, Malta¸Netherlands and Romania)

Indeed there are only 4 countries where the Commission seems quite relaxed about the public finances. Estonia, Finland, Luxembourg and Sweden.

To conclude, the European Commission, which is asking for higher EU spending, is also arguing that 23 of 27 European Countries are already spending outside their means. No wonder people are frustrated and confused.

1 comment:

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