Summing up the EU

When politicians like John Major come out with phrases like “Britain in danger of stumbling into final EU divorce” I’m reminded of the problems that have accompanied membership.

When we entered the EEC under Heath, the big sell to the British public – membership was purely to join an economic club (don’t worry it’s just economics) – carefully smoothed over the fact that the EEC was was intended to be a political union. Heath (and Wilson) were well aware that natural public opinion then was 3 to 1 against. When the in / out referendum was held, it was heralded by an intense pro EEC campaign (a line followed by most papers). The EEC has, since then, inched towards ever closer union with projects like the ecu, the euro and rebranding (it is now called the EU).

A rarely publicized argument for joining was this: It offers publicly funded jobs for politicians who have been voted out of office. In effect it is a second life – you aren’t voted out of a job in Brussels. The perks are luxurious; all you have to do is toe the party line. Experience requirements are: Suitable for politicians from political parties. Politicians must love Brussels and its well-paid talking shops.

Auditing the EU
The fly in the ointment is that the EU has to have its annual accounts signed off. It’s normal for auditors to flag up their concerns in a management letter. I’d love to see what they say on the EU accounts. The problem is the accounts haven’t been signed off since 1994.

The annual EU budget is big – around £100bn – €130bn in EU money. Every so often glossy brochures come out showing spend. Where does spend go? A big area is the EU Common Agricultural Policy. This was a political hot potato when the UK joined the EU under Edward Heath. It still is.

Common Agricultural Policy (CAP)
Where does the EU CAP stand right now?
It takes 43% of the EU budget.

That seems a lot. Why?
For political reasons. Back in the 1960’s, Charles de Gaulle famously said ‘non’ to UK entry to the EEC. He wanted CAP to be generous to French farming; French farmers were vociferous. Good money from the EU kept them out of his hair. The UK would have derailed those plans if they’d joined too early.

Why is this a problem?
Agriculture is around 2% of the EU economy as a whole and represents less than 3% of French economic activity. Yet as things stand, this would result in wine lakes and food mountains. In order to do away with this surplus, produce is sold on world markets. To compete effectively against third world producers, it is heavily subsidised.

Agriculture in EU member states' economies - graphic

But it consumes 43% of the EU budget.

Who relies heavily on the agricultural sector?

Employment in rural economy - graph

Who benefits from it?

CAP allocations in 2009 - graph

It’s obvious from this that the funds from CAP favour France even though other members have greater need. French agriculture is subsidised to the tune of €10.5Bn each year, which represents about 8% of the total EU budget.

Reform of CAP has been stalled for 40 years. In 2010 the EU agreed to discuss it. By 2013 they’d talked enough to come up with a proposal: Spend wasn’t to increase before 2020.

So, by 2020 the CAP will be about… 40% of EU spend…
Some Big Reform.

If we leave the EU, we’ll miss charades like this.

Ref: BBC News Europe: Q&A: Reform of EU farm policy

About Terence Park

Board games, US Comic books, SF Paperbacks, Vinyl records; I've plenty of them all. I write SF (the serious sort). I also do spreadsheets.
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