Returning to the history of those 2005 EU Budget negotiations.

 

It was clear from the outset to anyone in the know (a) that there would be an increased EU budget, and (b) that those who Give and not those who Get would determine just how much bigger.

 

Since the large number of EU member states wanting to Get were in a relatively weak position, they had to make a vast amount of noise to try to intimidate those who Give into being more generous.

 

Among the Getters, Poland was well placed in a ‘fairness’ sense. It was a new member state, a large new member state, and (unlike eg Spain/Italy) had not benefited from EU largesse on a massive scale previously. So if any country was to do well in relative and absolute terms, it should be Poland.

 

The UK position was … complicated.

 

This time round, following the French/Dutch referenda fiasco Prime Minister Blair had a uniquely favourable position to give the EU a firm dose of UK leadership. Would the EU now lying gasping on the floor be grateful and penitent when we pulled it back on its feet? Or would it gracelessly, greedily try to pick our pocket as we hauled away?

 

On the substance:

 

  • We did not want to see an inordinate increase in the total EU Budget, as much of the money would be wasted in CAP payments to wealthy farmers, plus UK taxpayers would be paying a large slice of any increase.
  • We did want to see the new member states do well – much better to invest EU funds in countries which were relatively poor than absolutely rich.
  • But we had the Presidency. This was good, because it enabled us to set the overall agenda and drive the process – and indeed end it, if things were going badly wrong.
  • But it also was bad, because the Presidency must play its own national hand and represent the EU as a whole in finding Compromises and Consensus. Plus every Presidency wants to be Successful.
  • NB too that we were bound to be attacked flat-out on the UK Rebate issue by everyone else.
  • Should we simply say No, playing the national card? If so, others could collapse the process, howling at British selfishness at the hour of Europe’s greatest need.
  • Or should we say Maybe, ceding a really important national principle and opening up the way to subsequent salami slicing aimed at increasing our already generous share of the pot?

 

Thus the familiar pseudo-haggling, bluffing, hypocrisy and game-playing started.

 

The European Commission quickly threw into the ring their proposal: an Outlandish Increase in the EU Budget. It did not sound much – an increase of the Budget to 1.26% of the newly enlarged Union’s Gross National (sic) Income.

 

The UK opened its bidding at 1.00% of EU GNI. The difference? Some 200 billion Euros.

 

The Commission, bent on Much More Europe, knew very well that their bid was absurd and doomed to fail. But, hey, aim for the stars and you might hit the moon. Plus the more extravagant the opening bid, the easier it would be to present the Givers as being selfish and ‘un-European’.

 

This facile ploy worked as expected.

 

The Givers laughed heartily at Commission temerity.

 

The Getters, especially the new member states and Poland in particular, seized on this Commission figure as some sort of new entitlement, to the point of complaining bitterly (or to be precise pretending to complain bitterly) that UK/Giver positions represented a massive cut in ‘their’ money for which they had to be ‘compensated’ in other ways.

 

And so we come at last to the heart of the issue.

 

It would have been possible to give Poland most of what it wanted even under the much less ambitious UK/Giver offer, if the Givers themselves took less money from the EU Budget in 2007-2013, primarily through reduced CAP payments.

 

But France, humiliated by its referendum result, of course would not accept that.

 

So we in London faced a hard choice.

 

Should we refuse to accept French and other Giver intransigence and risk letting the EU Budget not be agreed in our Presidency, having fun blaming the French but adding even more stress to an EU already in real disarray?

 

Or should we accept that, to get what we wanted (ie a final Budget much closer to 1.00% than to 1.26%) French intransigence was an Immovable Object, and instead juggle the sums to offer the new member states a lot less than they reasonably had hoped for but still a goodly whack?

 

To be continued …