EU Budget Laugh of the Day "No One Is Discussing Quality"

For now, the EU budget talks have collapsed. One major problem is cross agendas. All 27 nations have to agree to budget changes, and disputes are many.

The BBC reports hours of hard bargaining await.

Countries that rely heavily on EU funding, including Poland and its ex-communist neighbours, want current spending levels maintained or raised.

The UK and some other net contributors say cuts have to be made. At stake are 973bn euros (£782.5bn; $1,245bn).

France objects to the proposed cuts in agriculture, while countries in Central and Eastern Europe oppose cuts to cohesion spending - that is, EU money that helps to improve infrastructure in poorer regions.

They are the biggest budget items. The Van Rompuy plan envisages 309.5bn euros for cohesion (32% of total spending) and 364.5bn euros for agriculture (37.5%).

German Chancellor Angela Merkel says another summit may be necessary early next year if no deal can be reached in Brussels now.

In a speech to the European Parliament on Wednesday, the EU Commission President, Jose Manuel Barroso, complained, "No one is discussing the quality of investments, it's all cut, cut, cut."

UK Prime Minister David Cameron has warned that he may use his veto if other EU countries call for any rise in EU spending. The Netherlands and Sweden back his call for a freeze in spending, allowing for inflation.

Any of the 27 countries can veto a deal, and the European Parliament will also have to vote on the MFF even if a deal is reached.

Failure to agree would mean rolling over the 2013 budget into 2014 on a month-by-month basis, putting some long-term projects at risk.

If that were to happen it could leave Mr Cameron in a worse position, because the 2013 budget is bigger than the preceding years of the 2007-2013 MFF. So the UK government could end up with an EU budget higher than what it will accept now.

"No One Is Discussing Quality"

Barroso complains "No One Is Discussing Quality".

I for one am happy to discuss quality. There isn't any.

The agricultural subsidies are a joke, primarily aimed at propping up inefficient farms in France at the expense of higher costs for everyone. Those subsides should be cut to zero immediately.

And precisely why should the UK or anyone else contribute to infrastructure building in Poland? At what cost? Who determines quality?

Questions abound.

Pray tell, what is the basis for Barroso's statement "it's all cut, cut, cut"?

Point blank, there isn't any. There has never been a cut in the EU's budget in history and Barroso is actually bitching about a freeze at a time the Brussels' nannycrats are imposing huge austerity programs on Greece, Spain, Portugal, and Ireland.

Best Case Scenario

The best case scenario is the talks collapse, the EU raises the budget, and in response the UK tells the EU to go to hell and exits the EU.

We can hope.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com