Thursday, June 23, 2005

Quotes from the Budget Wars

On and on it goes, the sniping in the name of European unity. Such a joy to see all those politicians snarl at each other in order to preserve their own countries’ goodies. Not that I have any problems with politicians wanting to do the best for their countries, as they see it (i.e. getting themselves re-elected) but I do object to us paying for their little games.

Needless to say, Chirac, Villepin and Schröder portray Blair as the one to whom the whiff of sulphur clings. It is all so selfish and out of date, moans the new French Prime Minister:
"The British cheque – and I say this with all the friendship I carry for the British people – is truly an expense from the Old Regime."
The rebate, he added, was "a legacy of the past, an obsolete legacy, no longer with any purpose".

I wouldn't put it quite like that. The purpose is for Britain to get the money it overpays into the coffers of the Euro-monster.

What of the billions that get sunk into French agriculture (and other European agriculture) at the expense of the taxpayer, the consumer, the rest of the Continent and the developing world?

Mais non, that is different. That is "a major asset for Europe and for France".

Nice one, M de Villepin. A truly gargantuan (if I may use an expression from French literature) piece of hypocrisy. Tartuffe (if I may refer to another character from French literature) had nothing on you.

President Chirac, whose approval rating in France seems to be in free-fall, described at a news conference the system of subsidies as being "modern" and "dynamic".

Give these people their due. They realized that their opponents are going to claim the modern high ground and are rushing to get there first.

Chancellor Schröder decided to broaden the front. Not only he did not like Prime Minister Blair standing up for the rebate (kind of) but he does not like what he perceives as the British view of where Europe should be heading. In his overheated imagination the British economy is powering forward on free-market principles. And that is not the European way, he sniffed.
There is a special European social model to protect that has developed on the Continent.
We can probably give it a name: permanent economic recession.

Schröder went on:
Those who want to destroy this model due to national egoism of populist motives do a terrible disservice to the desires and rights of the next generation.
What next generation? Most of Europe is not reproducing itself. But, in any case, is the next generation going to be all that well served with a sclerotic economic system full of huge subsidies and hand-outs?

Meanwhile, others have been joining in the mud-slinging.

Swedish Prime Minister, Göran Persson, weighed in against the structural funds, stating that it was not fair that Sweden should pay for richer countries like Ireland and Spain, and saying the unsayable: "They can do it on their own."

That is an interesting problem. Ireland has, for some time, been boasting of its economic achievement, parading itself as the "green tiger". This has nothing to do with the vast amount of EU money that pours into the country but is the result of its sensible tax policy, we are told.

Maybe so. But the fact is that most governments shy away from tax cuts because they have to make tough political decisions. A government who can command huge subsidies from other member states does not. So, it is time for Ireland to prove that, indeed, it is the tax cuts that have created the economic boom. This blog will be among the first to cheer.

Spain, on the other hand, despite the feverish construction of buildings, remains a rather despondent economy. All the structural funds in the world do not seem to be able to do anything about it. Instead, ever larger areas of the country are designated as worthy recipients of various funds.

Either way, Persson is right. There is no point in pumping money into those countries.

The Dutch are not too happy either, as they, too, are being blamed for all sorts of problems. Prime Minister Balkenende described Chancellor's Schröder’s attack on Dutch "national egoism" as "unhelpful and unfair".

Foreign Minister Bernard Bot said Chirac was even nastier. (Surely not?)
He talked about fat bloated countries that are not ready to do something for poor countries and looked at us. That is obviously not the way to get others to make concessions.
No, but it is a good way to make people laugh their heads off. The French calling other countries fat and bloated? Crikey!

Not to be outdone, Danuta Hübner, Commissar for Regional Development has joined the bunfight. She used to be Poland's Europe Minister and led the negotiations for the country’s membership of the EU. She then campaigned hard to prove to her countrymen and women that Poland would benefit from that membership.

Well, she has certainly benefited by becoming a Commissioner. But with a Polish referendum still a possibility, she needs to take home the bacon (so to speak).

She has accused the west European member states of not being generous enough towards the new members and for sending the wrong signals by not settling the budget in time to send large amounts over to the poorer areas for spectacular new projects.

According to her, it was already too late for the money to be allocated in January 2007 and that is a terrible tragedy. As the International Herald Tribune puts it:
She said the delay would seriously undermine the EU's plans to pour resources into new programmes to improve Europe’s competitiveness and growth, especially in poorer regions in the new member states. The EU has been promoting these new programmes, focusing on new technologies and innovation, as crucial to Europe's catching up with the fast-growing economies of Asia and with the United States.
What a curious view of economic development: higher taxation and enormous government spending on huge programmes is the way to develop economically and compete with countries that try to reduce taxes and regulations.

So much for the free-market new member states from Eastern Europe. Show them or, at least, their representatives a hand-out and they become old-fashioned socialist redistributionists. They will fit in very well, indeed.

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