Friday, September 10, 2004

Have you heard the latest one about the budget?

No? Well, you haven’t missed much. The finance ministers are meeting tomorrow in a place called Scheveningen, near the Hague. What is on the agenda? Well, there is the British rebate, for one. Gerrit Zalm, the Dutch Finance Minister and current President of the Council has announced that the famous rebate for which Mrs Thatcher had swung her handbag in 1984 is now out of date and should be given up. As our readers will remember, what is being proposed is a system whereby all countries who pay in large sums of money will get a rebate. Or something like that. The calculations are so complicated that only a top level mathematician could even begin to understand them. Yawn.

Then there is corporation tax. France and Germany are pushing for harmonization. The Commission prefers to be cicumspect about it, announcing that there is not the slightest intention to harmonize corporate taxes while looking round for way of bringing the tax rates closer. This one is likely to feature that well-loved show: the battle between Old Europe and New. The new intake have lower corporation tax rates and will not want to give that up. However, they will not want to lose any structural fund aid from Old Europe either. Yawn again.

Thirdly, there is the question of how much the individual members will pay into the EU coffers. The incoming President of Commission, Barroso, that well-known free-marketeer, wants to increase the EU budget in order to have more grandiose EU policies. The member states, particularly net contributors Austria, France, Germany, the Netherlands, Sweden and the UK, say they will not give more than 1 per cent of GDP. At a time of recession, that will not run to too many grandiose European plans. Presumably, in this, too, there will be something of a battle between New Europe and Old, with Poland’s Danuta Hübner, the Commissioner-Designate for Regional Policy, demanding that the older members give more for the benefit of the newer ones. Free economy and dynamism goes only so far, after all. Double yawn.

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