David Cameron tells us that he has secured a deal which will ensure that the maximum the EU is allowed to spend between 2014 and 2020 is lower than in the previous seven years – that he has secured budget cuts. This is a lie. And here is why.
The headlines look impressive. The total number falls from £994 billion in commitments (how much the EU is allowed to spend) in the 2007-13 period to £952 billion next time around. Great. Well done Dave. But then look at the fine print and GNI ( essentially inflation since there is never any real terms growth in Europe) adjusted numbers. The last budget was originally set at 864 billion Euro. But each year there us an annual locked in GNI adjustment. And so that 994 billion Euro number is adjusted for 2011 prices.
And the 2014-20 numbers will also get adjusted as time goes along and thus you can bet your last pound that the total number by the time we reach 2020 will be way over a trillion and way over what is projected now. In other words when Call Me Dave talks about a cut what he in fact means is an almost slam dunk increase. And in absolute terms the proposed ceiling for the next seven years is in fact a 10.2% INCREASE over the proposed ceiling for the last term.
The number we use here is the maximum number the Evil Empire is allowed to spend. The amount each country has to commit is a different, lower number. But the EU cannot run a deficit. So what happens when the EU wishes to head up to its credit card limit. I suspect we will find out soon enough.
I chuck in a few other caveats.
1. Certain items fall outside this framework, i.e. there are budgeted items which are not er budgeted. This adds about 5% to the total. So when Call Me Dave says that the EU budget is less than 1% of EU GDP at 0.95% what he actually means is that it is 1%.
2. This budget is on the basis of current EU members plus Croatia. If Turkey or Albania or other countries which will be clear net takers not givers sign up to join the Evil Empire the number agreed by Call Me Dave will have to go up again.
3. Under a deal agreed by the war criminal Blair, the UK’s net payments to the Evil Empire will actually go up despite the “cut.”
4. In 2012 the Evil Empire managed to spend 129 billion Euro. The proposed ceiling for 2014 -2020 works out at 136 billion Euro a year. While the EU committed itself to being allowed to spend 150 billion euro in 2013 it is planning to spend only 132 billion Euro. You will note therefore that the 2014-20 number is actually an INCREASE on current spending ( in both absolute and real terms) and that it will be inflation protected by the GNI calculation each year.
This is a taster for what is to come ahead of Call Me Dave’s 2018 referendum. He will head off to the death star and come back claiming some great triumphs. The daily Mail will praise him as the next Churchill and the French will pretend to be annoyed with him. In reality we will get screwed again but CMD hopes that his spin will persuade us to carry on with this madness.
Call M Dave EU Newspeak
Cut = Increase
Getting a good deal for Britain = The UK pays more
Trust Me I’m Dave = Trust me I’m Tony