Tuesday, 16 November 2010

David Cameron's lucky day

It's been a good day for UK Prime Minister David Cameron. This morning Britain's Prince William announced he will wed his long-time girlfriend Kate Middleton in a lavish royal wedding next year. Cameron was reportedly ecstatic when he announced the engagement to his cabinet, and it's not hard to see why. A royal wedding is exactly the sort of thing the Tories need to lift the spirits of the British public, who are suffering so much from the economic crisis and the budget cuts. In fact the engagement announcement already started fulfilling its role as a much-needed distraction today as it completely drowned out the simultaneous announcement from 10 Downing Street of a raft of new cuts including, ironically, the scrapping of legal aid for poor people getting a divorce. So while the royal family celebrates an upcoming wedding, their subjects learn it will now be harder for them to obtain an equitable separation.

Meanwhile over in Brussels, word came this morning that Cameron may get his wish for a complete freeze in the EU budget after all. Talks between member states and the European Parliament over the 2011 EU budget broke down last night. With no agreement in sight, it will mean that the 2010 budget will have to be used next year. Freezing the EU budget at 2010 levels was exactly what Cameron wanted, though this is probably not the way he wanted to get it. But Brussels was in despair today over the failure to reach an agreement, which will have very serious consequences for the EU. Both the commission and the parliament seemed to be shocked by the deliberate sabotaging of the budget that appears to have been led by the UK with the aid of their Dutch and Danish eurosceptic allies.

It was particularly shocking considering that parliament had broken precedent and completely capitulated to member states' demand that the budget not be raised by more than 3% (the parliament had originally called for a 6% raise). What appears to have happened is that certain member states are using the budget negotiations as a power play, seeking to sideline an increasingly assertive European Parliament that has sought to use the new powers it was granted by the Lisbon Treaty. The irony of the situation was lost on no one in Brussels today. The British Conservatives, who are constantly whining about the "democratic deficit" in the EU, are seeking to marginalise the only directly elected EU institution. And they are willing to play a dangerous game to do so.

The deadlock centres around the parliament's request for compensation in exchange for agreeing to the council's 3% budget cap. So they asked for member states to authorise some form of direct EU taxation, something the parliament has wanted for awhile. Right now the EU is entirely funded by contributions from member states, but the parliament has proposed that a direct EU tax on aviation, complex financial transactions or carbon would lessen the burden on member state budgets and allow the EU to have its own resources. So MEPs have said that in exchange for their concession on the budget, they want member states to agree that, in principle, the EU can levy its own taxes in these limited areas.

But the Eurosceptic states of Northern Europe are ideologically opposed to any EU tax, and they have reportedly refused to even consider any such idea. Sources involved in the discussions have said that Britain, Holland, Denmark and Sweden have stonewalled any attempt at negotiation over the budget. This has apparently exasperated other member states, who fear that the failure to agree on a budget could severely threaten the EU institutions next year - particularly the new EU foreign relations arm the EEAS. If the EU is forced to use the same budget program as 2010, using the same level of funding and with funds allocated in the same way, it could be a real disaster. After all the funding allocations for 2010 were tailored to 2010. Some programs that had funding allocated to them in 2010 could no longer exist, for instance.  And since the EEAS wasn't budgeted in 2010, where will the money come from for the new foreign EU missions to be set up next year?

In the end, it looks as if the breakdown of budget talks was not due to money but rather to a power struggle between member states and the parliament. The fact that the parliament was willing to cap the budget increase at exactly the level member states had asked for shows that David Cameron's austerity crusade may not be the only thing motivating his non-cooperation. Member states may have seen this as an opportunity to crack the whip over an increasingly assertive European Parliament that has been behaving like a thorn in the council's side ever since it was granted new powers under the Lisbon Treaty. Since its modern inception in 1979 the parliament has largely been an advisory body to the two real decision-making institutions: the European Commission which proposes legislation and the council of member states which approves it. Under the new treaty rules the members of the European Parliament, who are directly elected by EU citizens, must also approve most EU legislation (wheras before they only had co-legislative power over some areas).

The parliament now considers itself an equal legislative body to the council of member states. And so when MEPs agreed to meet member states' demands on the budget increase, they expected something in return. But member states seem to be signalling that they do not intend to negotiate with the parliament in these situations, and that MEPs should just do what they say. One diplomat told the Financial Times today that member states are concerned that the parliament is "just going to keep pushing and pushing for more power, so it’s better to confront them now."

Of course it's not clear if this is a sentiment shared by all member states or just the Brits and Scandinavians who have balked at the parliament's EU tax demands. It may be that Germany and France are happy to have the UK fight this battle with parliament for them at the moment so they don't come off looking like the bad guys (and let's face it, looking like a villain in Brussels can only help Cameron's popularity at home). But considering that it is these same Northern European countries that are constantly complaining that the EU is not democratic enough, this effort to undermine the only popularly elected EU body is looking nakedly hypocritical to a lot of people in Brussels.

So now we're stuck in a game of chicken. And as we wait to see who blinks first, the proper functioning of the EU hangs in the balance.


Anonymous said...

If they use the 2010 budget, will it mean they have to do all the things they did in 2010 again? How will it work?

Thomas said...

Our political leaders are such hypocrites. They sell is the Lisbon Treaty by telling us it increases democracy in the EU, then as soon as its passed they go about trying to chip away at the reform it had.

Stephan Dint said...

I might agree with the British on this one. Have you seen those people in the European Parliament? They're either washed-up politicians sent to pasture by their national governments or crazies who sneak in on wacky platforms (like the pirate party!). The people can't be trusted to vote in sensible people to the parliament. So maybe the people don't deserve a more powerful parliament.