EU Budget: The Plot Thickens

Perhaps better said, the crisis deepens. Jaques Chirac started things off:

The time has come for our British friends to understand that they must now make a gesture of solidarity

and Tony Blair, of course, rose to the bait:

Britain has been making a gesture, because over the past 10 years, even with the British rebate, we have been making a contribution into Europe two and half times that of France.”

“Without the rebate, it would have been 15 times as much as France. That is our gesture,

It doesn’t look like there’s too much understanding going on here. Then there’s the nub of the matter.

According to Blair, the reason the rebate exists is because otherwise there would be a ‘quite unfair’ proportion of British contribution and:

The reason for the unfairness is because the spending of Europe is so geared to the Common Agricultural Policy. My view is that if we want a debate on future financing, one part of that has got to be what Europe needs to spend its money on to prepare Europe for the 21st Century, which is not the same as Europe 30 or 40 years ago.

I think at this stage it is really hard to say how this will work out at the summit. At this moment in time there seems to be little love lost between the French President and his ‘British friends’. Of course a lot of this could change when they get down to the negotiating table, but at this moment in time it isn’t easy to see how.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

45 thoughts on “EU Budget: The Plot Thickens

  1. Interesting to see how the referenda have brought this fighting out into the open (where actually it belongs).

    A real EU political process would look like this, all the time.

  2. If the debate drags into the british term what leverage will that give Tony?? Anyone have any thoughts on this.

  3. Do you have the real numbers of participation/inhab of each country and evolutions for the next years with and without rebate ???

  4. “Where did you get Blair’s gesture quote from?”

    It comes from the linked article, which is Agence France Press. A little trade secret, yahoo news really has quite a good thread in the ‘europe’ section these days. A wide variety of news I mean.

    “if the debate drags into the british term”

    Well this is what we really have to wait and see. The coming summit will be important. It is important to note that while Chirac is strong on rhetoric, he is pretty mortally wounded by the referendum result. I don’t accept the ‘Tony Scapegoat’ thesis on these grounds. If Chirac was coming with a big victory in his back pocket things would be different. Many of the other EU leaders are relatively quiet at the moment. I think we should wait and see before jumping to conclusions. But of course, the rhetoric is entertaining.

    Remember the EU badly needs some credible successes at the moment. If they come away from the summit with a big row, this will be an important failure. I think Blair is going to emerge as Master and Commander. He has a favouable wind, and the other ships are too big and unwieldy :).

    “Do you have the real numbers of participation/inhab of each country and evolutions for the next years with and without rebate ???”

    No, I’m afraid I don’t. Maybe another of our readers knows more about this than I do. Ever since my father told me, when I was still young and impressionable that ‘Edward Heath accepted a cheque for betraying his country’, I have tended to steer clear of all this. I have no idea what would be a ‘fair’ budget allocation. I am simply willing to listen to others on this.

    What I think Blair *is* right about is the need to structure EU finances with a view to the future not the past. For reasons associated with the Doha round, and fairness for the third world, I am opposed to the extent to which we use agricultural subsidies in the CAP.

    Obviously this means ‘information society’ related topics: education, training, R&D etc.

    Clearly one of the areas I do know more about would be another case in point: ageing. If you want to talk about solidarity, maybe you should be thinking of helping those societies where ageing related problems will be most serious. Also the Central European societies generally will be amongst the most rapidly ageing, and they enter the process with the least accumulated resources, so there is something to think about here.

    On another aspect: the euro. Many comparisons are made with the US. Well, the level of ‘solidarity’ internally in the US is much greater: transfers of up to 40% of the GDP of federated states take place. We are talking about a budget which is only slightly over 1% of EU GDP. This detail should give food for thought.

  5. The French are good at bringing up solidarity when it’s to their benefit. Why don’t they show some solidarity and stop blocking reform of the horrible, regressive CAP?

    Tha CAP is a system where we pay taxes in order to raise prices on our basic food stuffs and then dump the resultant surplusses on the world market. The costs of the CAP fall almost entirely on poor people, because of food prices, and 80% of the benefits go to the wealthiest 20% of farmers. That’s solidarity? Chirac is one of those wealthy farmers, by the way!

    Abandoning the UK subsidy would simply allow the French to carry on blocking reform of this travesty of a policy.

  6. Incidentally, the FT certainly doesn’t seem to back me up:

    “Tony Blair, Britain’s prime minister, was on Thursday facing total isolation at next week’s European Union summit, as he fights to save the UK’s controversial rebate from the EU budget.”

    If we go down this road the risks for the EU are high. I still say, ‘we’ll see’.

  7. Chirac and Schroeder are meeting again today. Expect more grandstanding and bellicose rhetoric designed to “enmerde” Tony Blair.

    This odd couple of lame duck leaders are most certainly going to put the finishing touches to their plan to put Britain firmly in the spotlight at the coming EU summit. This diverts attention away from the Constitutional Treay issue, diverts attention from their deliberate trashing of the Growth and Stability Pact, and is an opportunity to try and diminish their unpopularity with their respective electorates. Personally I think the sooner these two “eurowreckers” are gone the better the EU will be able to make some progress.
    It is largely thanks to Chirac and Schroeder that the EU has spent much of the past few years lurching from one crisis to another.

    Raking over the muck where the EU budget is concerned is simply going to create more ill feeling towards the EU. The spectacle of political leaders enagaged in a war of words has become the normal state of affairs in the EU …. and then they wonder why EU citizens are becoming less enthusiastic about the EU and voting against its treaties in referendums! They are simply following the example of their leaders.

    I am no fan of Tony Blair but I sincerely hope that he firmly exposes Chirac and Schroeder for the charlatans that they are.

  8. I have no idea what would be a ‘fair’ budget allocation.

    There is no such thing. The budget is a question of political priorities.

    Clearly one of the areas I do know more about would be another case in point: ageing. If you want to talk about solidarity, maybe you should be thinking of helping those societies where ageing related problems will be most serious.

    That would come out as helping those who doomed themselves. It will never fly politically.

    We are talking about a budget which is only slightly over 1% of EU GDP. This detail should give food for thought.

    It means that there’s no fiscal policy either. We have an interest rate ill fitting everybody, no way to devaluate, no fiscal policy for the whole currency area and common market rules that in tendency hinder national fiscal policies.

  9. Can I tell you all just how much I would love to see T Blair, or one of his minions, show up at the summit with a very conspicuous handbag?

  10. Actually I have got one constructive proposal. I have just posted on Afem about Chinese and Vietnamese bicycles. Now it does seem to me that some of the money which could be raised by a drastic ‘pruning’ of CAP, could usefully be made available to those countries who are experiencing special problems with China’s entry into the European market for slippers, T-shirts and push bikes. Adjustment costs. This would be OK with me.

  11. Budgeting is famously opaque and, as Oliver says, ‘fairness’ is an inherently political question.

    Terry Wynn (MEP, UK Labour) has something of a primer here. At first glance, it’s full of tasty details including bits about member states collecting taxes on behalf of the EU, and whether those funds can really be counted as member state “contributions.”

    He nets out to say that the only per-capita net recipients of the EU-15 are Ireland, Greece, Portugal and Spain (in that order). Biggest per-capita net contributors are Netherlands, Luxembourg, Sweden and Germany. The German contribution being, of course, quite the largest in absolute terms.

    It’ll certainly be interesting to see what Schroeder wants and gets from both the Chirac meeting and the EU summit. Germany has been paying the piper for a long time, and it’s getting less shy about calling the tune. And of course if Gerhard brings a handbag, watch out!

  12. By this report on Friday, Blair has softened about the rebate on Britain’s contribution to the EU budget but there is one big caveat – and that must mean the present high level of funding for the Common Agricultural Policy in the budget would be on the table, something Chirac must avoid for reasons of domestic politics in France:

    “The UK rebate could be up for negotiation if there is a fundamental review of the way the European Union is funded, Tony Blair has said.”
    http://news.bbc.co.uk/2/hi/uk_news/politics/4079246.stm

  13. Well according to LeMonde, Chirac has completed his analysis of the vote, and drawn his conclusions:

    “M. Chirac a reconnu que ce non fran?ais du 29 mais, suivi du non n?erlandais, provenaient d'”hommes et de femmes qui incontestablement ont des inqui?tudes sur un certain nombre de probl?mes dans leur vie quotidienne, qu’il s’agisse du ch?mage, des effets de la mondialisation, des d?localisations, du respect de l’identit? culturelle, des probl?mes li?s ? l’immigration clandestine”.”

    So the people are worried: about unemplyment, globalisation, outsourcing, cultural identity, illegal immigration.

    Funny I don’t see any mention about ageing and the sustainability of the welfare state, structural reforms, the way EU politics have been managed…funny isn’t it.

  14. “The level of ‘solidarity’ internally in the US is much greater: transfers of up to 40% of the GDP of federated states take place.”

    Can that be right? Alabama, say, receives subsidies from the other states worth 40% of its GDP? Or do you mean something else?

  15. Yes, this number is correct. Shocking isn’t it, when we think of the measly level of solidairy amonsgt EU states. The number comes from this paper by Marty Feldstein (President of the NBER and one of the candidates to succeed Greenspan):

    http://www.nber.org/feldstein/eurostabilitypact.pdf

    The paper was his address to the American Economics Association, and he cites the number to back up his argument that without this sort of thing the euro can’t work.

  16. I may not be too clear about France’s election calendar but I’ve picked up from various places that Chirac and associates face a huge prospective problem about what political themes to focus on to revive flagging support for their cause.

    If France’s electorate is largely moved by concerns about unemployment, globalization and Anglo-Saxon economics then the auguries seem to foretell of populist sentiments shifting towards either dirigiste socialism or the national front, rather like a replay of the terminal years of the Weimar Republic. Should we be looking towards France’s Sixth Republic?

    The flagged nostalgia of De Villepin for restoring Napoleonic glory is beginning to look increasingly ominous – remember that interview he did for the Washington Post two years back?

    “BRUSSELS [24 February 2003] — Was Napoleon’s defeat at Waterloo a glorious moment in France’s history? In a best-selling account of Napoleon’s final days published two years ago, France’s multi-talented foreign minister, Dominique Galouzeau de Villepin, argues that, yes, even today, Napoleon’s defeat ‘shines with an aura worthy of victory.’ . . ”
    http://www.washingtonpost.com/ac2/wp-dyn/A55843-2003Feb23?language=printer

    Please reassure us. Perhaps we should be focusing, as c. 200 years back, on measures to repluse an invasion or circumvent a new Continental System. Come to think on it, there are some official preparations underway to commemorate the bicentenary of the Battle of Traflagar this coming October:
    http://www.nelsonsnavy.co.uk/battle-of-trafalgar.html

    In these times of gesture politics to demonstrate solidarity, we should be contemplating the renaming of the Waterloo rail terminus and replacing the statue on Nelson’s column with one of Tony Blair: I’m sure he would like that.

  17. The word “inside the house” earlier this week was that there would be a deal. There was a surprising degree of optimism. Europe needs a “success” (ie agreeing on something). And the practical problems of not reaching agreement are also big. But there are no guarantees of course.

    Chirac, of course, is playing to the crowd as usual, and showing himself (once again) to be the biggest hypocrite around. I didn’t notice the French making too many gestures on the CAP when they stitched up a deal two years back to keep the CAP budget fixed in nominal terms till 2013.

    It’s an utter scandal of course. As a result of that deal we foresee 40% of the EU budget going to the CAP for the next seven year financial period. While at the same time Europe is supposed to be implementing the Lisbon strategy and getting itself in shape for the 21 st century.

    It’s ludicrous.

    In effect, Chirac managed – 2 years ago – and with german connivance (what the hell was schroeder thinking?) to put the CAP “off limits” – to protect a stream of wasteful spending for no good reason other than France benefits from it.

    How communautaire, Mr Chirac.

    Now he is asking the UK to “make a gesture” in the interests of european “solidarity”. So I fully understand Blair’s ire. I can think of a few appropriate gestures that Blair might want to make.

    The fact is that Blair is totally isolated on the rebate simply because only the Brits get it. On the other hand, Blair has a good case, and some useful allies on the general issue of the budget. But when you’re on your own you have to make some concession. The question is one of balance between symbolism and substance.

    But clearly it is not going to vanish overnight -perhaps a freeze in the rebate in nominal terms.

    On the issue of who gets what – I can probably help here. I’ll see what I can dig out.

  18. “The word “inside the house” earlier this week was that there would be a deal. There was a surprising degree of optimism”

    Yes, and this may be justified. I’ve just watched Chirac on TV. What he may be doing is drawing attention away from the fact that he is about to give major concessions on CAP. The Spanish have already accepted in principal a lot of important things.

    What no-one could do is give in without seeming to put up a fight. So Bob may well be right about Blair, maybe he will back-off if the concessions on the CAP are substantial, and there is some agreement over the future direction. We really don’t know if Schroder has been meeting with Chirac to plan, or to put pressure on him. He’s certainly been giving him some hard looks in some of the TV clips.

    Btw Bob, the Presidential elections in France are 2007. At the moment it appears that Sarkozy will walk it. So by 2008 we could have a Europe lead by Merkel, Sarkozy and Gordon Brown. A complete change of faces at least.

  19. I don’t know if people are noticing, but the euro is dropping again today at a fair clip.

    Ok, now I understand why, the US trade deficit has just come in at rising, but less than expected. Following what Greenspan said yesterday, the general drift will be euro negative.

  20. Edward, I follow the ?/$ rate of exchange for fun, trying to understand which news causes which changes. Sometime it is only that Greenspan has insinuated, or not, the rates could go up, and suddenly exchange rates jump. Then after a few days things return to where they were before.

    DSW

  21. “Then after a few days things return to where they were before.”

    Yea, well at the moment the euro’s been dropping for about a month.

    (Incidentally, those of you who want to join the game of ‘watching’, this si the best page I’ve found:

    http://money.cnn.com/markets/currencies/

    the number in the bottom left of the top left box is the one you want, and wow… it just dropped to 1.2155. Just refresh from time to time and you can see for yourself. )

    Ok on antoni’s point, it is a fair one. If the currency is balanced then it will keep rverting.

    But this is not where we are, the euro at the moment is assymetrically balanced, what I mean by this is that good news doesn’t help too much, and bad news sends it down, while… bad news from the US maintains the value, and good news sends it down.

    I think I’m posting this :).

  22. what the hell was schroeder thinking?

    If that is what it takes to get secure access to a large common market, so be it.

    Inoffical German National Motto

  23. Navarro in today’s FT said spain will take big regional aid cuts if the UK moves on the rebate.

    But I’ve heard nothing on reopening the CAP deal. Juncker has consistently stated that is not on the table. I will be very surprised if it happens (though delighted)

    What they probably will do is include bulgaria and romania under the brussels CAP ceiling without adding more money. But that is hardly a big concession.

  24. “Thanks for the charts Antoni, and look at them now!”

    I do. Sadly I must let it up now, I’ve got some work to do.

    DSW

  25. “The level of ‘solidarity’ internally in the US is much greater: transfers of up to 40% of the GDP of federated states take place.”

    I don’t think the Feldstein paper backs up this point (unless I read it wrong). The net transfer (higher transfers, lower taxes) is 40% of any *decline* in a state’s GDP – not 40% of the GDP itself.

    The relevant point (given current debates on the budget) is not – I think – whether this equates to a greater level of ‘solidarity’ – but that contributions to, and receipts from, the EU are not tied to short term economic performance.

    Thus no fiscal stimulus when the economy contracts.

  26. “unless I read it wrong).”

    No, I read it wrong. I just checked. You were right to be sceptical, and thank you for correcting. This difference is important. I thought it might be true for a small, not very densly populated state with small GDP. Obviously I read the thing too quickly.

    “The relevant point (given current debates on the budget) is not – I think – whether this equates to a greater level of ‘solidarity’ – but that contributions to, and receipts from, the EU are not tied to short term economic performance.”

    This is right, and I think is the key point. I simply used the expression ‘solidarity’ as a kind of provocation, since I think it is an emotive expression that doesn’t have too much meaning in practice in this kind of issue. Like someone saying ‘I am virtuous’. I think here in Europe we like to think that ‘we’ are ‘virtuous’ and that ‘they’ in the US are not. I don’t think life is anything like that simple.

    The issue is whether there are ‘automatic stabilisers or not’. In the US there are, in the EU there aren’t, and in the Eurozone there ought to be if they want it to work.

  27. From which two points arise…

    First, that the EU budget should be renegotiated on a rational basis – reflecting differences in relative wealth in the long-term, while being flexible to economic performance in the short.

    (The kind of fundamental reforms that would lead to the end of the British rebate, as Blair admitted yesterday.)

    Second, that this result is especially important to those within the Eurozone, for whom lack of flexibility presents a threat to the viability of their currency.

  28. “First, that the EU budget should be renegotiated on a rational basis – reflecting differences in relative wealth in the long-term, while being flexible to economic performance in the short.”

    Yes,I agree with this.

    “Second, that this result is especially important to those within the Eurozone, for whom lack of flexibility presents a threat to the viability of their currency.”

    And with this. I think basically I had ‘my cables crossed’ as we say in Spanish on two separate topics here. One is regional policy, which wec are in the process of moving from a national to an EU level, and obviously the budget debate is in large part to do with this.

    Here the 40% number may not be far short of the order of magnitude sometimes involved. In Spain (I am guessing because I can’t remember the exact numbers offhand) maybe 9% of the GDP from Catalunya goes as solidarity (net) to the rest of Spain. They want to renegotiate, and put a maximum limit of about 5% net transfer. So if we take a recipient like Extremadura (and count govt employees, health and education, the lot) they may well have net transfers not far short of 40% of their GDP. Logically, a Federal Europe, with a common currency, would imply something similar in some cases.

    But this is not the same issue as that of the SGP and automatic stabilisers. Here you may be talking about compensating a 2% drop in GDP in a recession, and funding this up to 40%. What I am not clear on is the mechanism which might be used to do this, or the relation of this item with the substantive budget.

    Thanks to another commenter here I am looking through the work of Peter Bofinger:

    http://www.wifak.uni-wuerzburg.de/wilan/wifak/vwl/vwl1/mitbofinger.htm

    He seems to have proposals about the stabilisers. He was also nearly proposed by Schr?der for the EBC board I think.

    Really I realise I have been remiss in another important sense. I have long assumed that in fact the decision to reduce deficits was taken due to the coming fiscal pressure from ageing. This certainly was the background to the discussion. However now I look at the details of the SPG this area is not mentioned (as far as I can see) and the other – the free rider and associated – is the principal consideration.

    So those who criticize the bureaucratic and infexible nature of the ECB are in the right to this extent. Of course the underlying demographics *should* be part of the pact, but that is another story.

    I find myself in a tricky situation, since I am deeply sceptical that the euro can work, and now after the French vote even more so, but since it has been set in motion, the best thing is obviously to try and make it work (even while doubting). So I am thinking about all this. Obviously I should try and write a longer post making this clearer. Thank you once more for your persistence.

  29. I note that aid for Africa is much in the news these days. Let’s not forget that one of the most important things that can be done for people in much of the impoverished world is eliminating agricultural subsidies. Since, as Mr. Blair points out, the EU is, in large measure, a device for giving out agricultural subsidies, this will be both a political and an economic challenge.

  30. But this is not the same issue as that of the SGP and automatic stabilisers. Here you may be talking about compensating a 2% drop in GDP in a recession, and funding this up to 40%. What I am not clear on is the mechanism which might be used to do this, or the relation of this item with the substantive budget.

    YOu are talking about a budget increase of up to 50%. This isn’t going to happen.

  31. “YOu are talking about a budget increase of up to 50%.”

    Or a reduction in someones contributions, or something like that.

    This isn’t going to happen.”

    Of course it isn’t going to happen, I never imagined it was. This was, a , what do you call the thing, gedanken-experiment. To see what you would need to do if you were serious about trying to make the euro work. But we don’t get even this….

    See Bofinger:

    http://www.wifak.uni-wuerzburg.de/vwl1/downloads/bofinger040205.pdf

    and skip the model, read the intro and the conclusions.

  32. The CAP is in interesting example of institutional inertia, but it has changed in the past and will continue to do so. It was started at a time when Europe was not self-sufficient in food. 45% of the budget may seem high now but in the 1980?s it accounted for 90%. It was originally mostly linked to production and thus actually favoured large-scale enterprises. In 2003 it was reformed, and became a kind of charity, handed out on a per production unit basis. It now also serves more as a social policy instrument, since payments are conditional on meeting food safety, environmental and animal welfare norms. There?s more emphasis on funds for rural development too. The late relatively lamented European Constitution would have continued this evolution, putting many areas bearing on the CAP in the hands, partly at any rate, of the European Parliament and member States, rather than in those of Brussels.

    I?m not sure what kind of concessions Blair is after and in whose interests they really are. In the end, it should be about what kind of countryside Europeans want rather than about how we can best negotiate with the Americans at the WTO or how the supermarket chains can maximise their profits. Few Brit?s retain any family or other links with the countryside apart from a weekend cottage, but perhaps we can afford measures that promote something other than a monoculture landscape. After all, apart from the sun, isn?t that partly why so many of us choose to go to rural Italy or France for our holidays?

  33. I’m not sure what kind of concessions Blair is after and in whose interests they really are. In the end, it should be about what kind of countryside Europeans want rather than about how we can best negotiate with the Americans at the WTO or how the supermarket chains can maximise their profits.

    If this is about landscaping, instead of securing a food supply, there is really no need to get the EU involved. A decision on landscaping is much better made on a local level.
    Furthermore, food prices are important. There is widespread agreement that Europe needs to adopt free market policies which will cut benefits and increase income inequalities. Now these are necessary. But there’s something morally wrong in maintaining high food prices for a special interest’s sake while cutting unemployment benefits even for families with children.

    perhaps we can afford measures that promote something other than a monoculture landscape.

    Abolishing the CAP would allow a lot of land the fall into disuse and enormously benefit nature. Agriculture in much of Europe is the main negative impact on the enviroment. Policy on this is nonsensical. We pass always stricter limits on sewage and care about nitrogen getting into lakes and rivers through nitric oxides while you may dump pig shit on fields.

  34. “After all, apart from the sun, isn?t that partly why so many of us choose to go to rural Italy or France for our holidays?”

    Well I live in Spain, and spend a lot of time in the country, and I can tell you the only thing that ‘stinks’ around here isn’t the political corruption.

    “We pass always stricter limits on sewage and care about nitrogen getting into lakes and rivers through nitric oxides while you may dump pig shit on fields.”

    Oh how I agree with you. There is also the question of water use, and its relative scarcity. We’re back to the days of turning off the tap while you brush your teeth here in Spain, as this year’s drought is very important, meantime the agricultural consumption is enormous.

  35. Our European food supply is pretty secure already, I?d say. No. it?s not primarily about landscape ? something tourists are perhaps more sentimental about than farmers. I?m pretty keen on English style love-of-nature myself, but the countryside has been a human product since we started burning down forests as hunter-gatherers. Letting the land fall into disuse is not a conservation measure, it needs management. Question is, what management ?

    (BTW, my personal impression is that the non-EU Swiss are the greatest pigshit-spreaders in Europe, today as much as in my distant childhood, and I agree it?s unattractive.)

    I agree that there would be no need to get the EU involved if the countryside were not a social environment, with voters and relatives of voters in it, as in France, Italy, etc, rather than agribiz country estates and holiday homes, as in much of England. The Luxemburg-agreed reforms of the CAP (very slowly being applied) steer a path between the creation of larger surpluses, to be dumped on easily destabilsed countries like Albania, and turning ?les pecnauds?into charity cases. That delicate navigation requires funding ? and possibly retraining for conservation objectives – as much as the redevelopment of cities like Liverpool.

    Brits (under Thatcher anyway) used to go on about inefficient (read small) European farms, and that?s Blair?s point too, in less abrasive language. This ?special interest? as you call it, is not seen as such in parts of the continent where the industrial and agricultural revolutions were not so sudden and drastic as in pioneering Britain. People in towns have rural family there, quite often in some ancestral village. The problems of French wine growers in the Rousillion are identified with far more than the average Londoner identified with, say, Hull fishermen. I don?t see what is morally wrong with treating this concern as something democratic governments should respond to, just as they respond to urban unemployment through EU regional cohesion funding.

    I agree the proportion of EU funds that goes to agriculture is too high given the percentage of the population involved. But we need better food more than we need cheap food, and we?re more likely to get that through EU policies ( especially if they became parliamentary matters and much more imaginative about directing farming practices towards that end) than through the sort of food production we have in Britain, which is about supermarket profit, not sustenance and taste.

    http://www.oxfaminternational.org/eng/story_Albania_dumping.htm

  36. I think John, in some ways, we’re all kicking at open doors here:

    “Brits (under Thatcher anyway) used to go on about inefficient (read small) European farms, and that?s Blair?s point too, in less abrasive language”.

    I think the issue isn’t so much whether some of them are efficient or not, but that we need to move away from simply retaining what is. The CAP made a lot of sense as a transitional measure, but has become the norm. In Spain hundreds of thousands of ‘indocumented’ immigrants have been sucked in to work land that was being returned to nature, simply because with a combination of subsidies and bra?eros wages, it becomes profitable so to do.

    We need a ‘territorial’ policy, just as they do in the US. The countryside does bring ‘externalities’ that town and city dwellers benefit from. But the money needs to be put into preserving and maintaining the countryside, sprucing up the villages, providing rural tourism outlets in keeping with the environment, and not on generating a bigger market for the petro-chemical industry.

  37. I agree with all of that – but my point was that the CAP may be slow to change but it does change, and would have done so more if the Constitution had passed. Reforming it in the way you envisage is hardly Blair’s – or Lord Sainsbury’s – agenda though.

  38. Letting the land fall into disuse is not a conservation measure, it needs management.

    The land would change drastically. If you are content to let the forests grow, all you need to do is to keep your hands off.

    BTW, my personal impression is that the non-EU Swiss are the greatest pigshit-spreaders in Europe, today as much as in my distant childhood, and I agree it’s unattractive.

    It is not a question of attraction. People are paying a lot more for sewage treatment in water fees to connect the last houses to the processing plants at a vanishingly small benefit while the sanest thing would be to have less livestock.

    I agree that there would be no need to get the EU involved if the countryside were not a social environment, with voters and relatives of voters in it, as in France, Italy, etc, rather than agribiz country estates and holiday homes, as in much of England.

    You may be making a case for national subsidies. If the French want to be foolish, fine by me. But what should the EU care?

    I don’t see what is morally wrong with treating this concern as something democratic governments should respond to, just as they respond to urban unemployment through EU regional cohesion funding.

    Because they are not told what these subsidies mean to their food bill.

    But we need better food more than we need cheap food

    I disagree. The EU food supply is safe to a very high degree. Quality is ensured in as far as high standards of health are met. If anybody wants super high quality food, fine, it’s a free union, let him pay for it. And the days of a people caring about food prices are not past.

    The countryside does bring ‘externalities’ that town and city dwellers benefit from

    Then they shall pay. Should they want the olde country from days of long begone level a surcharge on visitors.
    There is an externality to preserving biodiversity and clean water and air. Agriculture is a detriment to that.
    Furthermore, this kind of hyperregulation is killing us by the death of a thousand cuts. This is a fine example of a body of regulations each single of which can be made a case for in its entirety is detrimental to the common good.

  39. If you are content to let the forests grow, all you need to do is to keep your hands off.

    But I?m not. The forest is in fact a rather sterile environment, most interesting only at it?s edges and along cuts such as woodland rides. Things like heaths, peat bogs, marshes, usually originating from human action like burning or grazing sheep, all need the kind of active conservation that promotes species diversity; the very species diversity that is threatened by monocultures.

    I think Brits probably feel as strongly about this sort of thing than anybody in Europe. Look at the membership of the RSPB ? enormous. Yet charity organizations can only touch the surface. The key is farming practices, and the real special interest is agribiz. Dealing with this special interest is at least as much on the French agenda as on the British one.

    I?m not sure how the number of livestock computes here, but let?s just say that Swiss farmers get even more subsidies than EU ones. Norway?s do too.

    I?m not disagreeing with you about the volume of production. Luxemburg was precisely aimed at delinking production levels from subsidies. I?m saying that the countryside is a social issue ? and in many parts of the EU it?s where there is the greatest poverty and the greatest need for regional cohesion and other funds. The point is that Britain?s agricultural model is rather exceptional, and that to propose it as a model of rationality is special pleading.

    What should the EU care ? Depends what it?s for, which I agree is a political issue. I want it to be for the harmonization and satisfaction of EU citizen?s economic and social interests. I don?t see it as primarily about securing the best return on capital, although that?s important. Sounds high-blown, OK, but ideologies do play a part in decision-making.

    The EU food supply is safe to a very high degree ? That is not the perception of French and German consumers, who for different reasons have almost religious views on food purity. People do care about food prices, of course, but the key to better nutrition is education about dietary choice. The supermarkets have been getting away with appalling pressure on farmers. If people only saw how most of what they consume is produced ? Even the wealthy are offered little real choice. The way the CAP favours big producers and a whole shtick of minor EU regulations ? what tomatoes you?re allowed to grow ? are absurd, but it is precisely those aspects of the CAP that must be reformed, not the idea of a living countryside.

  40. What should the EU care ? Depends what it’s for, which I agree is a political issue. I want it to be for the harmonization and satisfaction of EU citizen’s economic and social interests.

    These are two entirely different things. There is no harmony in the interests of a land spanning so much area with differences in climate and history. Agriculture that is sensible in Spain is madness in Scotland.

    The EU food supply is safe to a very high degree ? That is not the perception of French and German consumers, who for different reasons have almost religious views on food purity.

    That is the point. If it is religious there will never be agreement and putting it on EU level is a recipe for eternal trouble.

    not the idea of a living countryside

    Why? Is the EU an institution that does social engineering in its members? Or put a different way, if the French want it, fine, but why have everybody pay?

  41. Or put it yet another way: if everybody else wants it, or understands the need for it, aren’t Brits being a little obtuse ?

    “There is no harmony in the interests of a land spanning so much area with differences in climate and history”

    If Britain’s policy is truly based on such a premise, then its membership is a fraud perpetrated both on the other members when it joined, and on its own people, who were never informed of the explicit nature of the project. You surely cannot claim that Heath did not understand the European perspective, though his FO advisers may have misled him about the speed at which it would progress and its chances of success.

  42. if everybody else wants it, or understands the need for it,

    That’s an illusion. The French want it very badly and nobody but the British has the nerve to go up against that.

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