Reason | Jan 17, 2021 | 0
No Confidence? EU Should Reinvent Itself Now Before the Inevitable Rot Sets In
No Confidence? EU Should Reinvent Itself Now Before the Inevitable Rot Sets In
Mon, 08/10/2020 – 05:00
The EU is facing a crisis like never before. Even its own fanatic supporters are talking about an end game after recent concessions over a corona rescue plan have exposed how little grip Brussels has left. It’s all hidden in the small print.
Failed talks with the UK over a Brexit deal are just one of a handful of examples of why now pro-EU experts are all sounding the alarm over the EU’s stability. Along with the Corona bailout, there is a new impetus of ‘euro-scepticism’ from many member states signalling the end of the EU as we know it.
Talks between EU negotiators and Britain’s Brexiteers might as well have collapsed. In fact, they haven’t, but in so many ways it would be better if they did. The EU is taking its largest gamble ever by playing a ‘last minute’ game of chance with Boris Johnson – a leader who has proven that he is determined not to be drawn into such a charade and will firmly stick to the December 2020 deadline of pulling the UK out, with or without a deal.
A big sticking point is fisheries of course. France is putting huge pressure on Michel Barnier to negotiate something for the French. Before joining the EU, Britain had more or less a monopoly of the seas surrounding its shores – which it lost when it joined the European Union with now other countries fishing six times more fish than the UK. The trade deal itself also has a number of difficult areas which neither side wants to concede.
Given the EU’s track record and what we know about its own style, everything points to a last-minute drama at the end of November this year when Barnier and his officials wake up to the reality that Britain really is going to adopt WTO rules and get out of the EU altogether with no deal.
Many hardcore Brexiteers even prefer this option to a present deal now – a point that Barnier seems to have not grasped – as they believe a second round of negotiations will put Britain in a much stronger position to cut a deal.
But in many respects a no deal Brexit is being shadowed now by an even bigger threat to the EU’s existence, which is how it has failed to nail a 2 trillion euro rescue package for its member states affected the most by the Covid-19 virus. In July, the EU agreed to a much smaller package which was a mixed bag of loans and grants. While Italy has been given a grant of 80bn euros and Greece 23bn, both these countries will be expected to pay part of a 750bn euro debt which is what some analysts like Yanis Varoufakis are calling a ‘Eurosceptic’s dream’. The recalcitrant former Greek finance minister reckons that Italy will only end up with 30bn euros after it has contributed to the bigger EU corona recovery debt, which guarantees that this country will become even more Eurosceptic in the future once Italians understand the small print of the ‘deal’.
Less money to go around
But the deal itself has driven a wedge between a number of northern European countries like Sweden and the Netherlands – and the rest – and, according to a number of pro-EU experts, is signalling the beginning of the end for the EU, which in reality is going to operate from 2021 with less money in its coffers than before, with Britain no longer contributing. Even BBC experts who are staunchly pro-EU, to the point of being fanatical, are pointing this out. Lyce Doucet, the BBC’s top international correspondent, speaking on a talk show, talked about the ‘breath-taking’ compromises which have been made in Brussels for the deal to get the green light and that break-away EU states like Hungary going rogue and new political/financial problems with Italy will play a real role in possibly the EU institutions having real difficulties in remaining in power of the European Union project.
With less money to go around, a big part of the EU breathing new life into itself – bigger projects like the environment, defence and even health funds – will all have to remain fanciful ideas on paper in Brussels.
And yet there’s no sign of the EU tightening its own belt on its own spending. Brussels simply doesn’t do austerity, unlike member states, which support it. What it prefers is to borrow money on international markets so that future generations are saddled with the debt and it can give off a veneer of normality and even stability. There is another cunning reason why it likes to always talk big figures. While talking hundreds of billions of euros, it makes it more or less impossible for any journalist in Brussels to suggest that the EU cuts its own operating costs – which by comparison to the huge numbers bandied about, looks very modest.
The EU’s entire operating budget for the last seven years – each year – is a modest 165 bn euros. No journalists in the Belgian capital like to point out that this figure has gone up every six years.
And no Brussels-based journalists like to admit that for the first time, despite appearances to the contrary, the actual EU budget for the next six years (2021 – 2027) is to remain the same at around a trillion euros.
This is because, in reality, no one has worked out how to paper over the cracks of the UK no longer sending 9bn euros to Brussels, which has to be paid by the larger contributors like France and Germany.
What is harder to grasp is how the EU is going to get much bigger funding for its international aid program, which it wants to boost by a massive 30%.
A good laugh
The EU has big plans to punch above its weight around the world in how much money it pumps into “developing economies”. It currently spends from its annual budget around 13bn euros in total propping up dictators who are happy to plaster EU aid boards all over the country and show mock reverence to Brussels’ artificially created hegemony. Some EU websites, although not mentioning the total new budget for the EU itself, refer to pumping this up by 30%. Given that the EU has a funding crisis, it’s hard to see how it will shuffle its present arrangements to meet this.
What the EU could do is scrap this entire aid project altogether and use the money for start up businesses in Europe as a way of offsetting crippling unemployment. But that’s unlikely to happen.
If you still have a sense of humour after leading EU supporters of the project talk about the beginning of the end, then here’s a howler for you. Buried deep in euro jargon is one minor detail which will indeed back up Varoufakis’ claim that the new blueprint is written by a eurosceptic who wants to bring the house down. Outside of the EU budget is the 750bn euro corona rescue package, which, wait for it, isn’t going to be paid back to its lenders, until the NEXT, EU budget period, starting 2028.
This is unprecedented as is the new rogue state of Hungary which is setting a new norm in how it regards Brussels’ so-called leadership. But the fact that most EU leaders or even Brussels officials may not be in employment in 2028 (or some may not even be alive) says a lot about how much confidence the EU has in itself as a serious long-term project. Expect biographies in years to come which claim corona was “killed” the EU by pensioners sitting in high-backed chairs talking to BBC journalists with softly spoken voice overs referring to Ursula and Angela and their care home tantrums. Will Angela Merkel in 2028 even be able to give TV interviews?
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