Wednesday, December 14, 2005

Europe: No, no, no, no and no.

It's Europe's blackest year -- no to the constitution, no to economic reform, no to reform of the budget, almost a no to Turkey, a possible no to the world trade talks.

Europe is in a mess. People are dispirited.
So said Denis MacShane, Britain's former Europe Minister. The biggest dispute, and there are many, is between Britain and France. Britain enjoys a rebate, that is, Britain receives money back each year from the European Union to the tune of 3 billion euros annually. This deal was struck between Prime Minister Margaret Thatcher and French President Mitterrand and was granted to Britain because many of the European subsidies are skewed towards other EU members.

Jack Straw has floated the latest proposal from Britain that says, basically, if France gives up its farm subsidies Britain will give up its rebates. Chirac, knowing that enraged French farmers, 131,000 of whom receive some 20,000 euros annually in subsidies, would have his head on a pike if he were to agree, disagrees. In fact, Chirac says France will not consider any reduction whatsoever in its farm subsidies in spite of the fact that Britain has offered to forego 1.1 billion euros, or more than a third of its rebate. The EU, in keeping with its forward looking while marching backwards strategy, spends 40% of its total budget on farm subsidies which benefit 5% of its population. Imagine that; 40% of the budget to 5% of the population.

The debate is being carried on in civil terms, however, with the British calling Chirac's tactics "dumb" and "diversionary" as opposed to "moronic and a smoke screen", which might have really pissed him off.

Other countries involved have not been much more accommodating to the latest British proposal. Poland: "This proposal, if it stays as it is, will be met by a veto from Poland." Lithuania: "I am authorized to vote against the new proposal by Great Britain." Just a couple, for example.

The poorer Eastern European countries want the EU's budget increased to one trillion euros annually. The richer countries, like Britain, Germany and The Netherlands, don't. The British propose a budget growth of about 2.5 billion euros per year until 2007 when it would top out at 895 billion. The poorer countries want it jacked to a trillion euros, like, right now.

The real problem here for any agreement is that the agreement must be by consensus, which means that every voting member of the EU holds a veto. If anyone says "no," or "non," or "nein," it's over. An impossible situation. The British have the guts to put their rebate on the table but the French don't have the guts to reciprocate with their farm subsidies. The French lacking fortitude is kind of an old story, is it not?

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