» Wednesday, June 15, 2005

EU Finance

Asked if we were expecting more proposals to come out of either the Luxembourg or Brussels meetings, the PMOS said that was a matter for the Presidency. Our working assumption was that we would not receive any further proposals today, but rather that we would find out from the Council if the Presidency had new proposals to put out.

Asked if it was safe to assume that agriculture had "been dealt with" as a result of Bulgaria and others being accommodated within the existing agricultural pot, the PMOS said he would not get into the detail of the negotiations, as there were issues about Bulgaria, Romania and other countries. In terms of our overall case for the need for reform, as the Prime Minister said at the press conference last night, we had a situation at the moment where forty per cent of the EU budget went to meet the needs of five per cent of the EU population and two per cent of jobs in Europe. That was a distortion of the EU budget. However, it was also ten times more than was spent on Research and Development (R&D) and skills training. Therefore, what we needed was a situation which equipped Europe for the demands of the twenty first century with regards to meeting the challenges of globalisation, especially the challenge of China and India and other emerging countries and the competition that they would pose for Europe in the future.

Asked if we had put forward proposals to the Presidency, in terms of the idea that accession countries might have their contribution to rebate "knocked off", the PMOS replied that it was the Presidency’s job to put forward proposals. Regarding suggestions, there would be many contributions to the discussions and debate as we moved into the meetings later in the week. We were not going to give a running commentary on any of the suggestions, but rather we would talk to the Presidency and our colleagues in Europe and see where we went from there.

Put to him that the Prime Minister had said he thought that forty per cent on agriculture was too much, was there instead a "rough ball park figure" he could give instead, the PMOS replied that the journalist had started at the wrong end of the telescope. The PMOS said that as we faced an era of globalisation, Europe’s needs had to be accessed, and then the budget priorities assessed.

Asked why the Prime Minister had not raised the issue of the agricultural settlement as part of the enlargement proceedings two years ago, instead of now when the budget was settled, the PMOS replied that the Prime Minister made it clear at the time that the balance of the budget was too much in favour of agriculture. Equally, however, the challenges of globalisation had become clearer in the interim period, but also there was more chance of winning the debate and discussion within Europe. This was partly because the challenges had become clearer, but also in the aftermath of two votes such as there were in the Netherlands and France, people were starting to recognise that there was a question facing Europe. That question was "what direction were we going in"? Therefore, as we discovered in Paris and Berlin, there was a real discussion to be had, but that did not mean, however, that there was an agreement. The other key factor to be considered was what enlargement had done; it had brought in countries who were much more in line with our thinking in terms of their view of being competitive, and highlighted what Europe needed to do to become even more competitive. The nature of the debate was changing and had changed.

Asked what the point was of re-opening agreements that were made two years ago, the PMOS said there was the ability within the agreement to re-open the issue. The important thing was that agreements were there to serve the needs of Europe, which were evolving and changing, not the other way round.

Asked to name any country out of the twenty four who supported Britain, the PMOS said he was not going to checklist other countries’ positions as that was for them to do. What we were doing in terms of the rebate was to point out that the rebate was a symptom of the problem, not the problem. It was only necessary to correct the imbalance in the budget, and to ensure fairness. Instead, the underlying problem needed to be addressed.

Asked why it had to be the EU who "poured money" into aspects such as R&D and should national governments instead be spending money on what they thought were priorities, the PMOS said there were areas where EU co-operation on R&D etc. could move things forward. It was also important to direct money to areas which find it difficult to attract the necessary finance. The important thing was that as the Prime Minister said in the press conference that we focussed money where it would produce results in the current world. We were not addressing the same challenges that we had to address in the 1950’s and 1960’s, and we must therefore be agile enough to switch our standing to meet those challenges.

Asked if we now accepted there was a direct link between what we got in the rebate and the overall budget, in the sense that we would accept a change in the rebate as long as there was a commensurate change in the overall budget, the PMOS said that what the Prime Minister had made clear was that this was not a dogmatic defence of the rebate per se. Rather, it was a defence of the rebate as a mechanism to ensure fairness. The Prime Minister had also made clear that the rebate was a symptom, but not the problem. The PMOS said the rebate was only necessary because of the distortion within the budget.

Asked if the Prime Minister would accept any increase in our net contribution, the PMOS said that what the Prime Minister wanted to ensure was that the UK paid its fair share – no more and no less.

Asked if there was a strict deadline when the budget had to be settled, and if not, was the Prime Minister relaxed about taking longer that this particular summit, the PMOS replied that we were not up against an immediate deadline as that was in 2007. As the Prime Minister said in Paris yesterday, he believed we were facing a difficult situation, and the comments from Mr. Junker this morning seemed to agree with that. It was for the Presidency to decide whether a deal was possible or not, and it would be better for people to wait and see what happened.

Asked if it was possible for a temporary one year budget to be agreed, instead of for the 2007-2013 period budget, the PMOS said he had heard no suggestion of that, but the important point was we were not at the stage where that was necessary.

Briefing took place at 11:00 | Search for related news


  1. So, what direction *are* we going in? Who’s driving? Who’s reading the map? This whole issue reflects a history of poor management, little grasp of strategic short, medium or long-term thinking skills – oh yes, and an arrant disregard for the groundswell of public dissatisfaction with the standard of leadership in this country. In a school, this situation leads straight to the dreaded "Special Measures" – ie when an outside authority takes over; in commerce, it ends up in financial failure; in marriage, the inevitable is divorce. I could give many more straightforward analogies, but it’s just too depressing… anyone remember the massive emigration in the early 80s of our brightest and best talent to other countries as an expression of disgust with the Government? Guess what – it’s happening all over again. If this country is going to play an active part in the EU structure, we need a change of thinking. Could this possibly mean a change of leadership? (rhetorical)

    Comment by auntyq — 15 Jun 2005 on 4:49 pm | Link
  2. No, because the only viable alternative is worse: the perpetrators of those disasters in the ’80s that you mentioned.

    One thing that is needed is an electoral system that properly represents the people – e.g. one of the better forms of PR. I know all the cliched arguments against it, but at least it would reduce the likelihood of whichever bunch are in power from simply becoming the new establishment and finding that it is more in their interest to perpetuate past iniquities than change them.

    "If this country is going to play an active part in the E.U…" Well that’s a big IF. The current government is no better than all the previous ones – it has realised that the E.U. does represent a real challenge to its power, and is therefore actively making sure that this doesn’t happen. That is what they mean when they say that they are ‘actively engaged in Europe’.

    What they haven’t done is enact any domestic reforms to enable a better interface between Westminster and Brussels in the interest of better government or a more effective delivery of E.U. matters in the U.K. The E.U. is still dealt with by the Foreign Office, can you believe? (What greater expresion of the true outlook could there be?); the Minister for Europe is not a full cabinet member; M.E.P.’s do not have equal recognition with M.P.’s; there is virtually no mechanism for communication with other nations on E.U. matters at domestic parliamentary level, and there is evidence that most M.P.’s know little and care less about Europe.

    It’s hardly surprising that most people feel’see that we get a bad deal from Brussels, but that is because our beloved national parliament has not seen fit to make it otherwise.

    If you ask me, the E.U. ought to place our clowns in Westminster under "Special Measures".

    Comment by I Stock — 16 Jun 2005 on 10:33 am | Link

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