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A draft of the
EU budget leaked today has revealed no change in a proposed significant rise in
the EU's administration costs.
The
latest draft, circulated by EU Council president Herman van Rompuy and
revealed by Open Europe, shows the
Administration budget at €62.6bn - a 12.8% increase over
the €55.5bn in the 2007-13
MFF - rather than falling with other public administration cuts in EU member
countries.
The
European Commission, supported by the European Parliament, originally proposed a 5.8% rise in the
overall budget framework to €1.033tr. This included a
6% share for Administration, taking the cost up to €62bn.
The EU's administration costs have become the focus of today's
negotiations in Brussels, with the Prime Minister taking aim in particular at
the pay and perks of EU officials. It would be particularly difficult for him
politically to return without securing a significant cut in the EU's admin
costs.
It is
also not clear to what extent discussion over direct EU taxes are forming part
of the EU budget negotiations.
Herman van Rompuy last week tried to turn the spotlight on Britain
by
proposing that proceeds from a new Financial
Transactions Tax - in which Britain will not participate - should be
contributed to Brussels and the amount offset against a country's contributions
to the EU budget.
Last
year, the European Commission also proposed replacing the
existing VAT-based contribution to the EU budget with a "modernized
VAT" to arise "directly from the citizen to the EU".
The
plan is thought to entail VAT levied at a fixed percentage by all member states
in addition to national rates - likely to be a 1% uniform rate, rather than the
0.3% share of UK revenues the EU collects currently - and then transferred
directly to the EU budget.
If no agreement
on the EU budget is reached in time to allow for legal ratification of the new
deal by the end of 2013 - under a political, rather than legal, Inter-Institutional Agreement - the
2013 budget will be rolled over year-by-year with a built-in 2% rise to cover
inflation.
EU Commissioner Viviane Reding has said that the EU should
take control of taxes from national governments.
Speaking at a debate in Berlin last week, the EU justice
commissioner said: "The veto right in the EU council has to be
scrapped. Qualified majority voting should be extended to more policy areas, for
instance taxation".
Such a move would prevent any single member country, or
even minority of countries, blocking Council of Ministers decisions to impose
new EU taxes.
Discussion of EU taxes is likely to form part of the EU
budget negotiations at a summit of leaders later this week (22-23 November),
sold as a way for member states to be 'unburdened' from contributions to the EU
budget.
However, the burden of funding the EU would simply be
passed to people and businesses directly and, most importantly for many in
Brussels, the EU's right to govern and increase those taxes in future would be
conceded.
Tax plans
EU taxes have come back on the agenda as a way for the
EU to raise more money in "own resources" and bypass the problematic task
of requesting ever-increasing amounts of money from national governments.
Member countries currently pay towards
the EU budget based on their gross national income, as well as VAT and customs
duties.
The EU has already benefited financially from recent rises
in VAT, imposed in many of its member countries as part of austerity programmes.
The Commission has also tried to drive through an EU
Financial Transactions Tax (FTT) on banks which, due to
opposition from a number of governments, is now only set to be adopted by ten
member states. Without a veto, the FTT could have been imposed on all EU members
by majority voting and particularly threatened the City of London's financial
sector if the UK were forced to participate.
Budget Commissioner Janus Lewandowski has also proposed
the EU collecting a climate tax on air traffic that would put
up the price of holiday flights and expressed interest in governing other areas of taxation, pressing
governments as a first step to agree to co-ordinate the way corporation tax is
calculated and to impose minimum rates of fuel taxes on energy
bills and road transport, linked to levels of carbon emissions.
Decision time
The right to directly tax businesses and citizens is one
of the few powers left exclusively to national governments within the EU. For the EU to gain this power would require a change to the EU
treaty, ratified by each member country.
It would be politically
impossible for David Cameron to agree to such a change. However, this latest
statement by Viviane Reding once again reveals the intentions of those driving
the EU to take further fundamental powers from member countries towards becoming
a fully-fledged pan-European government.
Advancing EU political integration brings
into sharper focus the fundamental decision about Britain's future we must soon
make between undiplomatically blocking political union if that is what other EU countries want or letting them go their own way and seeking for ourselves a new,
looser, more flexible relationship with our European neighbours that respects
democracy.
-------------------------------------------------------------
Read more ...
Summary - Revision of the Energy Taxation
Directive
Amid the entertaining political theatre of yesterday's EU budget vote lies a far more fundamental debate than whether the amount Britain's pays into the EU budget should be frozen or cut.
A debate that will soon come much more to the fore.
Much of the Westminster Village reaction to the government's defeat in Parliament last night by 13 votes is inevitably rotating around whether
David Cameron is in control of his party; whether he will wield his veto to
block a rise in the EU budget; whether Labour will support that veto and what will
happen if the Prime Minister tries to secure MPs' approval for a deal that does
not involve a budget cut.
Throw in some simplistic comparisons to John
Major's Maastricht woes in the early 1990s and a mixture of
the above is what the political commentariat are serving up for today's consumption.
But all that is a side show. Sure, a bit of discomfort for David Cameron and
the fate of a few billion pounds rests on one option or another and the Democracy
Movement, more than most, wants to see Britain's payments to the EU cut - in
fact, far more dramatically than anything currently being considered.
Back in 2005, when the EU's last 2007-2014 Multi-Annual Financial Framework
(MFF) was being debated, the DM launched its Stop the Cheques campaign,
contrasting the cost of the EU with various cuts being made then to public
services (see campaign postcards pictured above). A theme that is today, thanks
partly I'm sure to our efforts making the case to MPs over the years since - but no
doubt mostly due to the subsequent financial and debt crisis - a very strong
aspect of debate on the subject among MPs across the party divide.
Impossible freeze
No, the real punch to today's events will be delivered when the EU meets to
hammer out a deal on the EU budget on 22-23 November.
For David Cameron to deliver his policy he must very likely veto an
EU deal, but even then the EU budget will continue to rise with inflation anyway. It is certainly beyond his power to deliver Parliament's view that there should be real-terms cuts, as demonstrated by yesterday's vote.
Then, or soon
after, all the current chatter about EU budget vetoes, freezes and cuts will be shown to have been pointless. The various positions over which our
Goverment (freeze or veto), Labour opposition (cut but no veto) and Parliament (real terms cut) have so publicly clashed
this week will be revealed as a total waste of time due to the nature of the brave, new,
post-democratic EU in which we are currently embroiled.
Pointless veto
The domestic democratic agony we have just witnessed will have served
only make more glaring the reality: It is actually impossible to freeze, and certainly to cut, the EU budget. There is nothing our Government or Parliament can do - even if working in unison - to stop the amount we hand over to the EU rising without completely re-writing our treaty links.
Seventeen of the EU's twenty seven member countries are net recipients from
the EU budget, changes to which must be agreed unanimously. If no agreement is
reached, the budget reverts to a cut-and-paste, year-by-year agreement with an in-built increase in line with inflation.
It is blatantly in the interest of the vast majority of net recipient
countries to block any attempt to freeze the EU budget and certainly to cut it
since, if unanimous agreement is not reached, the budget rises anyway.
The system is loaded in favour of the budget recipients and a
perpetual increase. Both our Government and Parliament will be shown to be
completely impotent, their views on the changes that should be made to the budget over-ruled
and self-serving EU treaty clauses enacted to keep public cash flowing to Brussels at an ever-increasing
level.
Real question
Our financial exposure to the EU will be demonstrably out of control, regardless of the cuts being suffered by public services. Our
democratic institutions powerless to secure change. So what then? What does this say about democracy in today's EU-dominated Europe and is that powerlessness a future we wish to pursue?
Thanks to the brilliant work yesterday by MP Mark Reckless and supporters of his amendment,
this is the far more fundamental question that will shortly hit home about
Britain's relationship with the EU than would have hit the headlines through any fleeting
debate about whether we should hand over a bit more, or a bit less,
cash.
The soon-to-be-apparent real achievement of yesterday's events will be to have highlighted to a fuller extent the nature of the increasingly post-democratic state in
which EU member countries are currently confined.
So bring on the EU summit later this month and the start of the real debate - about how to secure a more democratic future for Britain and hopefully Europe too.
by Marc Glendening
David
Cameron might not exactly be in the Derren Brown class when it comes to
pulling off extraordinary illusions. But he did pour some cut price,
'70s magic act dry-ice over the issue of an EU referendum during the
week of the Tory conference.
He wanted to kick the EU referendum into
the long-grass and so he gave the
impression that, were he to win the next general election, he would
re-negotiate a new relationship with Brussels and then put this to a
popular vote at some unspecified point in the
lifetime of the next parliament.
The impression the
prime minister was trying to create in the minds of the 70% plus of
voters who want a referendum was that we would eventually have the
chance to either accept the deal he had struck, or, if we rejected it,
we would then leave the EU. He tried to sound unequivocal, and therefore
sincere, when he said that an EU referendum would be the "cleanest, neatest and simplest way" to decide the issue.
However,
when questioned by Labour MP and People's Pledge supporter, Natascha
Engel, at PM's questions (Wednesday October 16) on how Cameron would
vote in a referendum on EU membership, he said: "I
don't want an in/out referendum because I'm not happy with us leaving
the European Union, but I'm not happy with the status quo either. I
think what the vast majority of this country wants is a new settlement
with
Europe and then
that settlement being put to fresh consent. That's what will be going
in our manifesto."
Putting to one side the
disconcertingly undemocratic implication that referendums should not
enable people to vote for outcomes the prime minister does not
personally share, his response confirms that in the referendum he is
suggesting might one day take place, we will be presented with two
options: either we accept the deal that emerges from the re-negotiated
deal the government can strike with Brussels, or, if we reject it,
whatever the status quo will be at the time will persist. So, this will
only constitute, in reality, if it ever happens, an in/in referendum.
The trouble facing David Cameron is now several fold: First,
everyone who cares about the EU referendum issue no longer buys the
Cameron act. Remember, in 2007 he gave "a cast iron guarantee"
that he would hold a referendum
on
the Lisbon treaty. When challenged as to whether this promise would
hold if the treaty had already been ratified, Cameron refused to confirm
that he couldn't in that context give the British people a
retrospective referendum, which a straight-talking politician would have
done.
Second, he has just come to an agreement with Alex
Salmond on a straight in/out referendum on Scotland's relationship with
Westminster. The Scottish vote will not only result in increasing
numbers of people asking why the whole of the UK cannot have a similarly
existential poll regarding where ultimate political over their lives
resides, but it will also inevitably result in speculation north of the
border that there might be a need for a second, EU referendum. This is
because in the context of a vote for independence, the European
Commission has recently confirmed that Scotland would have to apply for
membership and sign up for the
euro.
Third, there is the outside possibility that Labour, under the astute
policy guidance of Jon Cruddas, might decide to promise us a real in/out
referendum. This would cause the Tory leadership the kind of acute
problem Harold Wilson's Common Market referendum gambit posed for
Edward Heath in the two 1974 elections.
Fourth, and most
importantly, events will probably overtake David Cameron and the
re-negotionatist faction. Within the next three years, two new EU
treaties establishing banking, fiscal and political union might well
have been ratified. These will have major implications for Britain,
Denmark, Sweden and the other countries outside the single currency. The
eurozone members will be able to caucus and vote as a block and so
impose a whole range of measures on the non-euro governments.
Ultimately, it will be up to the European Court of Justice to interpret
whatever treaty will emerge and what the supposed opt-outs David Cameron
has negotiated actually mean.
By being as disingenuous as he
has been, the prime minister's various statements on the referendum
question have served only to encourage a deconstruction of his magic act. More end of the Westminster pier than Penn and Teller in
Las Vegas.
-----------------------------------------------------------------
written by Marc Glendening
This article was first published on the ConservativeHome blog
Those looking for a quick, straight-talking update on the continuing financial turmoil in the eurozone could do little better than to read Ambrose Evans-Pritchard's pieces for the Daily Telegraph.
This extract below in particular from his latest article provides a perfect summary of recent developments and their implications:
---------------------------------------
Events in Europe are now moving fast. Portugal has been in havoc for
the last week. Spain is in ever greater havoc. Much of southern Europe
has become unpredictable.
Is it the fault of the monetary union and the euro? Yes, of course it
is. While large parts of the world are in deep economic crisis –
including Britain – the damage is concentrated with lethal intensity in
the EMU victim states. Spain’s unemployment rates is already 25pc, and
the full austerity has yet to bite.
It is made much worse by the unpleasant discovery that elected
governments can do nothing to escape the trap. They have lost control
over their own destinies.
Spain and Portugal are trapped in chronic slump with over-valued
currencies. While they have clawed back some lost labour competitiveness
by cutting wages, this has merely – and necessarily – compounded the
debt-deflation disaster. It has pushed them closer to bankruptcy.
The Draghi bond plan can certainly put off the day of reckoning. It
can lower borrowing costs across the board and cushion the slump. But it
cannot in itself stop the slow asphyxiation of these societies.
We are moving from the financial phase of this crisis to the
full-blown political phase. It really is playing out like the 1930s.
Final thought from recent media comment on the euro crisis, however, should go to Chris Morris, the BBC's correspondent in Athens, who says of Greece in his latest article:
So after three governments, two bailouts and an economic contraction of
Great Depression proportions, this country isn't out of the woods.
Time, then, to stop avoiding the heart of the problem and start planning an orderly restoration of a national currency? At this stage, there's no pain free solution and clearly no viable alternative to a Greek departure from the euro.
The Democracy Movement is now on Twitter, the
micro-blogging website.
For the latest EU-related news and DM comment, please follow us: @DemocracyMovemt
______________________
by Marc Glendening
David Cameron's vague statement last week that the government might hold an EU referendum at some unspecified point in the future, but not involving the option of us actually quitting membership, has been roundly ridiculed.
Deservedly so. This was the prime minister doing a traditional political 'taking you for a fool' act, reminiscent of his predecessors Tony Blair and Gordon Brown.
With so many mainstream politicians in this post-rational, post-modern era, political declarations are more about making mood music, creating vague impressions, conveying a sense of aesthetic well-being, rather than about actual, hard content.
However, those of us who really do want a in/out referendum should take some heart from the fact that DC felt the need to come out with the disingenuous statement he did.
Given that even a few weeks back the official No 10 line was that very few of us wanted the chance to vote on the EU and that the campaign for a referendum could be airily brushed aside, it is clear that Cameron, being the arch opportunist that he is, now appreciates the degree of momentum behind our democratic movement.
In part this is because of the number of Labour politicians now calling for a referendum or saying that one is inevitable: Peter Mandelson, Peter Hain, Alan Johnson, Natasha Engel, Keith Vaz among many others including, most significantly of all perhaps, Jon Cruddas, the MP now in charge of Labour's policy review and a signed up supporter of the People's Pledge EU referendum campaign.
This issue places the prime minister in a particularly difficult position as someone who says there is no alternative to being in the EU, but simultaneously tries to maintain his EU-sceptical credentials by claiming that he wants to see various powers re-negotiated back to Westminster from Brussels.
The reason he continues to rule out an in/out referendum is that he neither wants to be forced to campaign to stay in an unreformed EU (given that the EU cannot be fundamentally changed through negotiation), so blowing his EU-sceptical credentials for all time - but nor does he want, self-evidently, to associate himself with the out of the EU movement.
Within the next two to three years the EU will move towards a further centralisation of power - fiscal union - in order to save the euro from collapse. This will have huge implications for countries like Britain, Denmark and Sweden that are in the EU but outside the single currency.
Semi-detachment from the Pan-Europeanist project will simply not be an option. We will be confronted with an all or nothing scenario. The 'third way', re-negotiationist position rhetorically championed by Cameron and others will be finally exposed as impossibilist nonsense.
That moment has not yet arrived, but it soon will do.
_____________________________________
by Marc Glendening, DM campaign director
