In Defence of Europe, In Defence of the EU Budget

The mix of deceit and incompetence of the government isn’t the worst aspect of the recent imbroglio over the EU budget. Tory troubles may make many partisan Labourites beam, but these same people – and no one else – have made a defence of EU budget, what it’s for and why we should invest in it more than we do.

The recent request by the European Commission for £1.7bn from the United Kingdom has been controversial to say the least. The most unpleasant aspect? That the consensus in Westminster has been overwhelmingly negative towards the EU. No one has dared to break ranks with the rabidly Eurosceptic media and defend the claim, but a serious attempt to make a defence for the EU budget, what it’s for, and why Britain should contribute to it, has yet to be made.

To be a member of a club, you must pay a fee, and the EU is no different. The contributions demanded are based on the growth and overall wealth of the member states. These contributions are pooled into the EU budget, and every country has a say, and a stake, in the outcome of the budget negotiations. The EU budget is not very big. In fact, it’s tiny and now amounts to just over 1% of total EU GDP. It used to be a whopping 2% prior to the 2004 enla rgement! For context Britain and Germany’s governments occupy around 45% of their respective country’s GDP, France about 55%.

There are difficult (or even indefensible) budget elements such as the Common Agricultural Policy (CAP) which pays Farmers across the Union, such as Prince Charles, vast sums to shore up their businesses. But the Budget’s social (ESF) and regional development funds (ERDF) have huge successes of the European project – and this success would have been magnified many times over if the budget was endowed further than it has been since enlargement. It is true that the socio-economic balance of the EU with 28 members is radically different than it was under the EU-15 before 2004 enlargement, meaning that wealthier countries may have to become net contributors to make the budget effective. But is this not what pooling sovereignty according to principles of solidarity is meant to provide? The requirements of NATO membership for the British cost more (a minimum of 2% of national GDP) than the cost of European Union membership of 0.37%. The EU is arguably a more powerful normative force in the stabilisation of the region than NATO. Recent Russian proclamations regarding the Ukraine have focused on the encroachment of NATO rather than the EU.

The changes that have lead to the bill from the EU are, like many aspects of EU governance, technical and full of acronyms. To calculate their contribution, the UK uses Gross Domestic Product (GDP). The rest of Europe, and the Commission, have long used Gross National Income (GNI) instead which encompasses a much broader range of economic activity (including the ‘Black Market’ trade in drugs and prostitution, for instance!). With the UK finally making a change to GNI in 2014, the bill is due to the difference between the GDP and GNI figures, and backdated to 1995.

Naysayers therefore declare “How dare the Commission force this upon these bills upon the EU member states when they are responsible for changing the statistics!” But this is not the case! The European Council passed their judgement in support of the change to GNI as a method of statistical calculation on the 15^th July 2003 (regulation 1287/2003) to which the UK was of course party. This was later reinforced by the Council’s decision of 7th June 2007 relating to the use of GNI for Community resource calculations (budgets!). Indeed, the agenda for the meeting at which David Cameron was ‘ambushed’ highlighted this as a major issue for discussion (the agenda is publicly available as part of the Council’s working papers).

So the UK government was aware, had participated in the decisions leading up to this recalculation. There is a case for criticism against this statistical format used by the Commission. Namely that the inclusions in GNI are not necessarily factors that will lead to a direct taxable income for the exchequer. In which case, it is arguable that asking the state to make a contribution to the EU on the basis of economic activity for which it has not benefitted is unfair. However, the Black Market is a fraction of the total economic activity in the UK when compared to ‘legitimate’ business activity which avoids paying a fair proportion of tax. The abhorrent behaviour of Facebook ,Amazon, and non-domicile status registered individuals cost the exchequer vast amounts. At least drug dealers use local grocery stores. Tax avoiding leviathans instead drain our country for their own benefit.

There are positives and negatives to ever club membership, but for the pro-european left, there are clear cut advantages to Britain’s continued relationship with the Union. It is a shame that a defensive posture been adopted with Tory bashing the only response we hear, rather than an actual defence of the European budget being put forth. The conservative (small and large C) forces in this country would say something obvious and probably obnoxious to the idea of investing more into the EU budget. For there to be no reasoned challenge to that anti-EU sentiment is sad.

Greg Barnes is a Doctoral researcher specialising in EU public policy and has written for CHARTIST on numerous occasions on issues European integration