The European budget, or how democracy suffer when the givers are outnumbered by the takers

[Adar]

The issues regarding the EU budget is a rather straightforward. Countries who benefit the most from EU wish to increase the size of the EU budget while the net contributors want to reduce the fiscal burden (source).

After spending the last few years working in/with several EU funded projects I've become incredibly hawkish against EU budget increases as EU projects tend to be carrying huge administrative overhead costs compared to national projects. Actually achieving the targets is also almost impossibe as EU projects tend to be stretched to include as many nations as possible even if they are unable to contribute with experts within the project.

In the last year we've seen a situation where both Eurocrats and British politicians have benefited a lot from making Britain look like a lone crusader against EU spending. It's popular on a national level in Britain and especially Sarkozy was very good at making Britain look like an external threat to unite the population against. But in reality managing the EU budget is almost exactly like national taxation and social welfare which is shown by the latest round of EU budget negotiations.

Member States’ positions on cross-cutting issues
The total amount for the MFF 2014-2020 (EU budget)
On 29 June 2011, the European Commission (EC) presented the Communication ‘A budget for Europe 2020’ (EC 2011) to the European Parliament (EP), the Council, the European Economic and Social Committee and the Committee of the Regions. In tough economic times, seven Member States have recently taken the position that the EC’s proposed overall amount for the EU budget should be reduced by €100 billion, or in the case of Sweden, by more than €100 billion . The countries arguing for a decrease in the proposed EU budget are presented in the left column of the table. The Member States who support the EC’s proposal for the overall amount for the MFF 2014-2020 are presented in the right column. The Member States that are not listed in any of the two columns did not publicly state their position during the th 26 of March meeting

In favour of a decrease in the proposed overall Support the EC’s proposed overall amount for the EU
amount for the EU budget
Austria
Czech Republic
Finland
Germany
Netherlands
Sweden
United Kingdom

Support the EC’s proposed overall amount for the EU budget
Belgium
Bulgaria
Croatia
Cyprus
Estonia
Hungary
Lithuania
Poland
Romania
Slovakia

It is perhaps unsurprising that the majority of those arguing for a reduction have been net contributors of the EU budget while the majority of those arguing for the proposals have been net recipients. Most of the countries noted in the left column have made their positions public prior to the 26 of March GAC meeting.

Personally I think the situation is disgusting as the EU budget negotiations essentially mean that Sweden pay 1 Euro, get 0.5 Euros in return, Romania (or equivalent) get 0.3 € for free and the rest is swallowed up by the bureaucrats and administration. At a national level I support universal suffrage but on international matters I think decisions should be based on merit rather than numbers as it is just too easy to abuse the system and blame someone else.

[eisenkopf]

I am not sure what point you are trying to make here. Is there anything in particular?

[Adar]

I am not sure what point you are trying to make here. Is there anything in particular?

Lets see here.

• Britain is not the only nation opposing increased EU costs.
• Current voting systems cause issues when the net takers outnumber the net givers.

Or in simplified Chinese

• 英国不是唯一的国家反对增加欧盟的成本
• 民主陷入困境时，考生超过净值的净度外。

[eisenkopf]

Lets see here.

• Britain is not the only nation opposing increased EU costs.
• Current voting systems cause issues when the net takers outnumber the net givers.

Let's see...

About Britain et al. - well, do you really consider that to be news? It's an old hat.

About the voting system and the number of net takers vs. net givers: I know it's difficult (no irony here!), but have you tried to understand how the system works?

The MFF, which is you OP about, is passed by unanimous (!) vote in the Council of the European Union. While the number of representatives there is not directly proportional to the number of inhabitants or the gross national income, there is no way the MFF can pass anything against dedicated resistance from the "net givers".

As for the annual budget, this is much more complicated. Simply said, it Commission makes a proposal that the Council has to pass, before the European Parliament has its say. This time, the Council has to pass it with qualified majority, which currently means:

- at least half of the member states
- at least 255 out of the 345 votes
- on request by a single memberstate, the majority also has to represent at least 62% of the EU population.

As of 2014 (if no one objects) or 2017 (in any case), the qualified majority will be:

- 55% of the memberstates
- representing 65% of the population

Based on these numbers, it seems unlikely to me that the net takers can dictate the size of the budget. It seems more likely to me that the governments of the net givers choose the easy way out: Give in to a larger budget although they could have prevented it, and then blame the EU for it.

Or in simplified Chinese

• 英国不是唯一的国家反对增加欧盟的成本
• 民主陷入困境时，考生超过净值的净度外。

Cute.

[Adar]

Let's see...

About Britain et al. - well, do you really consider that to be news? It's an old hat.

If you want to whine about something not being new enough. Then theres the perfect place for you called "Political Mudpit" and I know you've been there before.

Based on these numbers, it seems unlikely to me that the net takers can dictate the size of the budget. It seems more likely to me that the governments of the net givers choose the easy way out: Give in to a larger budget although they could have prevented it, and then blame the EU for it.

And it would be really nice if things actually worked like that. The problem is that vetoes goes both ways (excellent example) and at the end of they day you still get down to legitimacy and who's got the most buddies. So national vetoes become of limited use as the most Europhile nations regularily teams up to create new and more complex structures to do things the've never succeded with before (example).

Forgive me for the off-topic post, but I have a quick question and the current discussion doesn't seem to be going anywhere, so I'll broaden it a bit if you all don't mind: Why are many Europeans resentful of Germany? The latter literally carries the EU pretty much singlehandedly. She bails out less productive nations like Spain, Portugal, Italy and Greece when the latter try to fund socialist utopia without regard for cost. Yet, as I understand it, the common European sentiment is that they are "German vassals." Is this true, and if so, why? Is it merely because Germany has a policy of conditional bailouts? Honestly, if not for the EU, I wouldn't be surprised if Germany owned the Continent and Britain owned everything else. Seems like the EU is a godsend for smaller and less productive countries, and it is Britain and Germany who should be opposed to the idea. Somehow Germany is the most ardent supporter of the EU when she's the one paying all the bills. I'm missing something here.......

The biggest problem is that Germany isn't carrying the EU singlehandedly but is almost singlehandedly pushing the net givers into a position where we have to carry a failing Southern Europe.

They started the slide to disaster by abolishing the former stability pact and currently they are allowing themselves to be manhandled by Italy and Spain. The first example linked to Eisenkopf is a good example of this. Finland, the Netherlands and Germany pushed for a hardline approach which would force Italy and Spain to live up to their promises. But as soon as Germany gave up Finland and the Netherlands were forced to give in as they would otherwise be small and isolated nations still stuck in the Eurozone.

Regarding why the Greeks hate Germany it's just a classical mob mentality. The EU lended them a lot of money (with Germany the largest giver in absolute numbers) and want them back. The Greeks doesn't care that they were lended the money and now get upset because they have to pay them back. You can of course obfuscate this core issue by discussing suffering, corruption etc but this is the core issue.

[Mangalore]

...
And it would be really nice if things actually worked like that. The problem is that vetoes goes both ways (excellent example) and at the end of they day you still get down to legitimacy and who's got the most buddies. So national vetoes become of limited use as the most Europhile nations regularily teams up to create new and more complex structures to do things the've never succeded with before (example).

...

You fail to explain how it is a bad thing that vetoes go both ways. What you describe is reality in any circumstance where a group of people discuss and decide a course of action. An absolute blockade will always isolate you.

A veto like any other measure is part of the negotiation, not some super weapon.

[Stavroforos]

Regarding why the Greeks hate Germany it's just a classical mob mentality. The EU lended them a lot of money (with Germany the largest giver in absolute numbers) and want them back. The Greeks doesn't care that they were lended the money and now get upset because they have to pay them back. You can of course obfuscate this core issue by discussing suffering, corruption etc but this is the core issue.

Yes, the core issue which angers Greeks is that we have to pay back our debts, not that we have 25% unemployment, 55% youth unemployment, and a sixth year of recession, with no hope in sight.

[Lord Thesaurian]

Forgive me for the off-topic post, but I have a quick question and the current discussion doesn't seem to be going anywhere, so I'll broaden it a bit if you all don't mind: Why are many Europeans resentful of Germany? The latter literally carries the EU pretty much singlehandedly. She bails out less productive nations like Spain, Portugal, Italy and Greece when the latter try to fund socialist utopia without regard for cost. Yet, as I understand it, the common European sentiment is that they are "German vassals." Is this true, and if so, why? Is it merely because Germany has a policy of conditional bailouts? Honestly, if not for the EU, I wouldn't be surprised if Germany owned the Continent and Britain owned everything else. Seems like the EU is a godsend for smaller and less productive countries, and it is Britain and Germany who should be opposed to the idea. Somehow Germany is the most ardent supporter of the EU when she's the one paying all the bills. I'm missing something here.......

[Dr. Croccer]

Because the EU rests upon Germany, and Germany can act a lot of influence through out. Most criticism of it is poorly directed though, especially Southern Europeans are more concerned with portraying Germany as the bad guy than trying to address the structural problems within the EU.

[The Last Varangian]

And because Germany gains massively from the Euro, as the presence of the weaker economies in the Euro keeps the Euro's value relatively low, allowing Germany a comparative advantage in selling their exports (which can be seen by Germany's superlative export performance since the adoption of the Euro, irregardless of economic circumstance). However, this in turn leaves the currency values of the weaker nations comparatively high compared to their national productivity, meaning their export earnings are relatively low (and import spending relatively high due to the relatively high value of the Euro).

[Col. Tartleton]

It's almost like they're still blaming Germany for something that happened almost a century ago.

[MathiasOfAthens]

It's almost like they're still blaming Germany for something that happened almost a century ago.

Yep because that is the entire idea behind the EU or the EEC. To punish Germany. One of the founding members of the federal union. I know you know the basis behind the union was to help the economy of Europe and prevent future wars in Europe through the integration of its members. To go some 60 years without a major war in Europe is a pretty big feat.

[Thorn777]

Yep because that is the entire idea behind the EU or the EEC. To punish Germany. One of the founding members of the federal union. I know you know the basis behind the union was to help the economy of Europe and prevent future wars in Europe through the integration of its members. To go some 60 years without a major war in Europe is a pretty big feat.

Well an aide to Mitterand quoted him calling the Euro project "Versailles without war", and if you look at the capital exports out of Germany for about the last 15 years before the crisis when the EMU was installed, it certainly took a minor shape of Versailles. Now with us supposedly benefitting overal from the crisis, that could turn into a full blown Versailles once the Euro breaks up and the southern Economies go down the crapper with their own inflated currencies. We can say goodbye to all the underwriting already going, which as it stands already amounts to twice the annual German budget.

And because Germany gains massively from the Euro, as the presence of the weaker economies in the Euro keeps the Euro's value relatively low, allowing Germany a comparative advantage in selling their exports (which can be seen by Germany's superlative export performance since the adoption of the Euro, irregardless of economic circumstance). However, this in turn leaves the currency values of the weaker nations comparatively high compared to their national productivity, meaning their export earnings are relatively low (and import spending relatively high due to the relatively high value of the Euro).

Its certain though, the German economy always faired well without a common currency and always faired well with a strong currency. Germany even appreciated the currency several times, even in the late 80's, and also then the British press was whining, as it is now, but for other reasons back then. Maybe look in your own backyard, that accounting fraud and tax evasion black hole, pushing and sucking surplus created everywhere on the globe towards those who seemingly cant get enough.

[Col. Tartleton]

Yep because that is the entire idea behind the EU or the EEC. To punish Germany. One of the founding members of the federal union. I know you know the basis behind the union was to help the economy of Europe and prevent future wars in Europe through the integration of its members. To go some 60 years without a major war in Europe is a pretty big feat.

[Knight of Heaven]

Because the EU rests upon Germany, and Germany can act a lot of influence through out. Most criticism of it is poorly directed though, especially Southern Europeans are more concerned with portraying Germany as the bad guy than trying to address the structural problems within the EU.

Yes im sure the german exports to South European countries has nothing to do with it. Wich is crucial to German economy.

[Mangalore]

Yes im sure the german exports to South European countries has nothing to do with it. Wich is crucial to German economy.

...

Erm..., Germany's trading partners 2011

Yes, Italy and Spain are important trading partners but barely at 6th and 11th they are still not primary trading partners. we are exporting more to Luxembourg than to Greece!

It seems their imports are more important to Germany while the vast majority of exports go to other countries which makes sense given Germany's export goods are mainly high pricing high tech products and not something you find buyers for in any consumer market. Thus Italy (and there probably mainly Northern Italy ) and some of Spain's industrial markets while most of the rest goes to other high tech countries.

[Dr. Croccer]

Yes im sure the german exports to South European countries has nothing to do with it. Wich is crucial to German economy.

No, they aren't, as Mangalore pointed out. All I see you and the other people who complain about it NOT being Southern Europe's fault that Southern Europe's a mess is make baseless claims. 'We're in trouble because the German exports screwed us over', 'we're in trouble because Dutch imports screwed us over', 'we're in trouble because of EU regulations', all absent of any facts, or statistics, or specific trade laws or regulations, all of which is readily available online for free. A cynical person might conclude that this is because you're pulling these accusations out of one of your orifices.

Again, I'm guessing that you think that the fact that Southern European economies in general are poorly balanced and diversified and very fragile to fluctuations in international finances and generally headed by corrupt populists who gave the population benefits which a far richer and more stable country wouldn't be able to afford.

[Xraider]

I remember an article on euobserver(a news website run by the wife of a danish eurosceptic MP, so i kinda trust its validity ) about how much Rajoy is hated in Spain and how 50% of the Spanish had a positive view of Merkel. I doubt the numbers are any different in Italy. So the whole anti-German sentiment is a rather over-inflate bubble. The real anger is against austerity,which is represented by Germany. Greece has been in recession for what, 5 years ? Portugal isn't doing all that well either. The people there know that things are horribly wrong,but when you see no light at the end of the tunnel, you can't help but feel mad. Unless you're Estonian/Latvian/Lithuanian. In that case you never had any hope in life, are a born pessimist,your cuisine is cheap and thus you can support anything life throws at you. Even if your salary gets slashed by 50%, its no big deal, just a part of life

[Stavroforos]

If there's a spec of truth in Knight's comment, it's that Greece is one of the largest, if not largest, importers of German and French arms.

[eisenkopf]

If there's a spec of truth in Knight's comment, it's that Greece is one of the largest, if not largest, importers of German and French arms.

Oh please, Stav, we have debunked that myth again and again and again. There was a period (a couple of years) in which Greece was amongst largest for Germany, but even during those peak years it was primus inter pares and a far cry from being decisice for the German arms industry. Which brings us to the next perspective: German arms exports are totally insignificant for the overall German export business. So insignificant, that a lot of people (me included) do not understand why we do this immoral business at all.