Growing rift? UK+Europe

[BeBMan]

Kudos to the 10 new members - they were ready to move, while much richer countries weren't at all. It's all quite depressing for now. Once again Europe does not get its **** together....

I can't tell if the US is happy about the current state of the EU - which is, honestly, in many ways pathetic. Some may be, but others may realize that a much weaker EU is not desirable for the US too.....

[Krill]

yep, you have to give kudos to the new countries for the offer.

One thing that would be nice to see is the Net givers and takers graph, but as a percentade of GDP instead of billions euros...

[Drogue]

The Netherlands would lead, Germany in second place, IIRC. The UK would be up there, France would not, and Spain would either be the biggest beneficiary or close to it. Italy would be roughly in the middle.

[Dauphin]

Originally posted by Krill
yep, you have to give kudos to the new countries for the offer.

One thing that would be nice to see is the Net givers and takers graph, but as a percentade of GDP instead of billions euros...

That's going to be skewed on the recipients side, as you would expect poorer countries to receive more. A country with a negligible GDP and is a large beneficiary will be off the map compared to a country with a large GDP but just as much aid/subsidy.

[child of Thor]

i noticed the little graph they use on the bbc site has germany as by far the largest 'giver' with spain as the biggest 'taker'.

I think its fair that the uk should review its rebate as our financial situation has changed. But thatshould apply to everyone as germany is probably suffering more than most with its still depressed economy.

Why is Chirac being so stubborn on this(as it will just encourage britain to use its veto)?

[Thorgal]

[kronic]

The British position is: get rid of the CAP, then we'll abandon the rebate.

In 2002, the CAP was frozen. Why can't the rebate be frozen in 2005? Juncker offered the UK the freeze the rebate at € 5,5bn (the UK never got more than € 5,5bn with the exception of 2003). I don't think the British refusal can be justified...

The same is with the Netherlands. The Dutch are the largest net payer per capita. So they demanded a change. That's understandable. Again, Juncker offered them a rebate of € 700 million. That is more than 1/3 of what they had to pay in 2003 (< € 2 bn). The Dutch wanted to have a rebate of € bn 1,5. That is ridicilous. You can't get a 75 % rebate.

Maybe, Germany should act like the UK or the Netherlands and let the others kiss our arse. It's really annoying, both countries got really good offers (and keep in mind that all other countries would have to pay for that, Germany in the first place) and they still refused them.



German, French and British net contributions in € bn:

[Drogue]

Originally posted by kronic
The British position is: get rid of the CAP, then we'll abandon the rebate.

In 2002, the CAP was frozen. Why can't the rebate be frozen in 2005? Juncker offered the UK the freeze the rebate at € 5,5bn (the UK never got more than € 5,5bn with the exception of 2005). I don't think the British refusal can be justified...

The French and German's didn't offer that. Moreover, the CAP hasn't been frozen IIRC, it's been frozen at a certain increase.

And yes, that is the British position. But that doesn't mean we equate it to freezing it. Though personally I'd be fine with freezing it. I just don't see why the German's support the CAP.

Originally posted by kronic
Maybe, Germany should act like the UK or the Netherlands and let the others kiss our arse. It's really annoying, both countries got really good offers (and keep in mind that all other countries would have to pay for that, Germany in the first place) and they still refused them.

The key issue is really good *in your opinion*. We refused them because they made us worse off than we are now. If the German's would let us reduce and reform the CAP, we'd lose the rebate and they'd pay a lot, lot less.

And that graph is very misleading. Compare GDP and payments, or GDP per capita and payments per capita. The German's have the largest economy in Europe, and while I agree they pay too much, they should have the largest net contribution because of that fact. The only reason they pay so much is that they support the CAP. If you stop supporting it, considering it costs you a lot of money, you'll save an awfully large amount.

[Dauphin]

Originally posted by kronic
Maybe, Germany should act like the UK or the Netherlands and let the others kiss our arse. It's really annoying, both countries got really good offers (and keep in mind that all other countries would have to pay for that, Germany in the first place) and they still refused them.

In the case of the British rebate, the biggest contributors to it are France and Italy, as Germany, Austria, Netherlands and Sweden have previously negotiated that they only pay 25% of 'their share' of the UK's rebate.

Or put another way, France will be by far the big winner if the UK lost its rebate.

[Colon™]

Originally posted by DanS
* DanS puts some popcorn in the microwave

I agree, let's stir things up a bit. Previous crises always have had a cleansing effect.

[kronic]

Originally posted by Drogue

The French and German's didn't offer that. Moreover, the CAP hasn't been frozen IIRC, it's been frozen at a certain increase.

It was the last proposal made by Juncker. From what I've heard both, Schröder and Chirac, agreed to it. And yes, there is a yearly increase of 1 % in the CAP. That's less than the inflation rate...

And yes, that is the British position. But that doesn't mean we equate it to freezing it. Though personally I'd be fine with freezing it. I just don't see why the German's support the CAP.

We don't support the CAP. Schröder wanted more in 2002 but couldn't get more from Chirac.

The key issue is really good *in your opinion*. We refused them because they made us worse off than we are now. If the German's would let us reduce and reform the CAP, we'd lose the rebate and they'd pay a lot, lot less.

Germany doesn't veto the reformation of the CAP. There are others, including France. France is not the only beneficiary of the CAP. They get less than 1/4 of the whole CAP money. So it's not about "if Germany would let us reduce it". Germany originally wanted more than the 2002 compromise but Schröder accepted the freezening in order to achieve at least anything. Schröder just said, he's not going to renegotiate the CAP agreement. And while I think the CAP should be abolished, he might be right, that it would be politically dumb to renegotiate it now. The EU already is in a deep crisis...

And that graph is very misleading. Compare GDP and payments, or GDP per capita and payments per capita. The German's have the largest economy in Europe, and while I agree they pay too much, they should have the largest net contribution because of that fact. The only reason they pay so much is that they support the CAP. If you stop supporting it, considering it costs you a lot of money, you'll save an awfully large amount.

See above.

The overall contribution is obviously according to the size of the economy. However, the point of the redistribution (i.e. the net contributions) within the EU, is that the rich countries shall support the poorer ones. And now, look at the first graph. In the EU15, we are only #11, but are the #3 payer.
And I posted the other graph to put it into another perspective. The German economy is not between 2 and 10 times the size of the British economy. In 2001, the UK even was a net beneficiary.

I don't see, why it is not acceptable for the UK to get € 5,5 bn. You can't get rid of the CAP in one day anway. Why would you be worse off with freezening the rebate? The UK never got more than € 5,5bn except 2001.

[Colon™]

Originally posted by Spiffor

I can grasp the possibility of such a thing. However, the current European model of development is not one where the development of Central and Eastern Europe is done at no expense of "old Europe". Once all countries will have a similarly high economic level, we will all be better off. But it'll take a generation to do so, and during this time, a good chunk of the growth of the CEE (not all of it) will be due to wealth transfer from the west, that will cost the west many jobs, and that will force the west to lower the protections it offered to its populations.

I wouldn't really call foreign investments "wealth transfers". Subsidies are "wealth transfers", they just shift money from one person to another without a return for the former. Relocating allows cheaper production, which is to the benefit of the consumers in the importing countries.

If your growth was entirely thanks to domestic economic dynamism, then why would you need truly open markets for investment and exports? When you sell something to the Italians that used to be produced in Italy, what do you think the Italian producers (I mean, the workers/employees) are doing?

It's exactly because economies are open that they tend to be dynamic, as they're exposed to foreign competition and as they receive an influx of technology and know-how from inward investments.

[Drogue]

Originally posted by kronic
It was the last proposal made by Juncker. From what I've heard both, Schröder and Chirac, agreed to it. And yes, there is a yearly increase of 1 % in the CAP. That's less than the inflation rate...

Then offer to increase our rebate by 1% per year

Originally posted by kronic
We don't support the CAP. Schröder wanted more in 2002 but couldn't get more from Chirac.

But the CAP would have been reduced without Schroder and Chirac's secret-ish pact to keep it increasing. If Germany joined the UK in calling for CAP reform we'd get it.

Originally posted by kronic
Germany doesn't veto the reformation of the CAP. There are others, including France. France is not the only beneficiary of the CAP. They get less than 1/4 of the whole CAP money. So it's not about "if Germany would let us reduce it". Germany originally wanted more than the 2002 compromise but Schröder accepted the freezening in order to achieve at least anything. Schröder just said, he's not going to renegotiate the CAP agreement. And while I think the CAP should be abolished, he might be right, that it would be politically dumb to renegotiate it now. The EU already is in a deep crisis...

The main crisis is because no-one can agree the budget.

The UK wants to keep the rebate and lose the CAP, but is prepared to accept reforming both together (ie. reducing both considerably).
France wants to lose the rebate and keep the CAP, but isn't prepared to reform both together.

If Germany said they want to reduce the CAP and the rebate, the UK would agree, and only France would oppose. That hasn't been offered.

If Germany wants the EU out of crisis, lets reduce and reform the CAP, and tie our rebate dropping to it.

Originally posted by kronic
And I posted the other graph to put it into another perspective. The German economy is not between 2 and 10 times the size of the British economy. In 2001, the UK even was a net beneficiary.

Yes, Germany is paying too much. Germany should be paying the most, being that it has the largest GDP, but nowhere near as much as it's paying currently. I agree completely. And that reduction should come from both a reduction in the rebate and the CAP.

Originally posted by kronic
I don't see, why it is not acceptable for the UK to get € 5,5 bn. You can't get rid of the CAP in one day anway. Why would you be worse off with freezening the rebate? The UK never got more than € 5,5bn except 2001.

As I said, the UK would in all likelyhood agree to reform of the rebate if it was tied to CAP reform. Until the offer involves reducing the CAP, we'll use our leverage with the rebate to demand as such. It's unacceptable because it legitimises the CAP rising each year.

The other reason it's unacceptable is the political climate in the UK. Eurosceptics won huge advances at the last euro elections. The UK needs a lot of convincing that it wants to be in the EU. Tony Blair isn't in the position to offer *any* consessions to the EU, as the Tories would slate him here for it. People in the UK know that we're net contributors, and don't understand why. You claim the EU is abotu wealth redistribution, but most of the UK population doesn't want that.

That's the crux of it. We don't have the same desire to be in Europe that the French and Germans have, it is an economic thing to us, largely. Being a net contributor of any sort is unpopular here, and any rise in the amount we contribute will be slated so much here that it'd be political suicide. Tony Blair can't compromise, as ideologically, the UK voters don't want a wealth transfer from the UK to the poorer nations in the EU.

[Thorgal]

Then both CAP and UK should be excluded from EU ASAP.

[DAVOUT]

One tragic error was to accept the Brits in the Common Market. The second tragic error was to grant them a rebate.

The PAC was not decided to please the French but to build productive capacities of foods for the whole Europe. If the members decide now that the european agriculture can be destroyed, they can do it; but this has nothing to do with the rebate.