Tuesday, June 14, 2005

BBC NEWS | UK | UK Politics | Blair rejects rebate freeze plan

Background: I think we all know what a rebate is i.e. money paid back to defray the cost of a particular good (in this case, contribution to the EU). The UK won its rebate after Margaret Thatcher, then prime minister fought tooth and nail for during the negotiations back in 1984. One reason (and the major one at that) was that the UK was contributing disproportionately to the EU despite its relatively weak economy at that point in time (hence making it even more disproportionate). However, today the UK is one of the largest economies in the the EU and while being the 2nd largest net contributor to the EU at 2.8 billion (Germany first at 7.7 billion), nevertheless, by a per capita contribution, lags behind quite a few nations (5 I think, making it the sixth largest contributor).

It's worth noting that there is nearly no support whether domestically or politically amongst all the three major political parties to give ground on this issue. Not to mention, the famous Euroskepticism of your average Brit, making this perhaps the toughest sale that Tony Blair would ever have to make.

So Mr Blair's suggested compromise is really a stroke of political genuis. By linking talks on the rebate (and freezing the rebate of 3 billion over 2007-13) contingent on a wider discourse on the EU budget as a whole, and in particular, on the Common Agriculture Policy (CAP) he has effectively shifted the burden back to Mr Chirac to prove that he is not being an obstructionist.

Recall that France recently dealt a stunning blow to the referendum on the EU constitution by voting Non, this being France the Founder-State and one of the most gung ho over the 'ever closer union' of the EU. As such, Blair has some ground on which to accuse Jacque Chirac of attempting to create a diversion over the issue of the Constitution.

But what is nice about this proposed compromise is the manner in which it would seriously make the entire situation more equitable. While it is fair to accuse the UK of not paying its proper dues (this not being the 1980s anymore after all), nevertheless, any further reform of the CAP would go a long way towards the necessary slimming down of this mammoth.

To quote the EUROPA: "The aim of the common agricultural policy is to provide farmers with a reasonable standard of living and consumers with quality food at fair prices. The way these aims are met has changed over the years. Food safety, preservation of the rural environment and value for money are now all key concepts." To that ends, a major series of reforms was instituted in mid 2003 which attempted to reduce tarriffs and subsidies given by CAP which had the unfortunate effect of distorting trade. This is a very euphamistic manner in which to say the EU had screwed over the 3rd World country's and agriculture sectors by artificially deflating prices of products, keeping 3rd World agricultural products from entering the EU and by destroying 3rd World agricultural sectors when these 'cheap' products were exported elsewhere and 3rd World products simply could not compete on price.

But even so, the beast is still going strong, taking up a near 46% of the EU's budget. Admittedly, the inequitabilities of this situation is not as bad as had previously been the case prior to enlargement. As this 49 billion includes rural aid for development, we ought to seeing more money flow to the new EU states which much more deserve the money than do nations like France and Germany (particularly France). These two countries are seemingly hellbent on keeping the CAP as it is and Chirac has signalled that he would refuse to entertain any discussion about the budget of CAP.

Well, one can hope for a happy outcome to this scenario if both Chirac and Blair give in.


*Mr Fluffy makes a rare appearance due to the nature of his busy schedule. Mr Fluffy is still struggling with his Despotic *ahem* he means Corronation Address and has yet to decide how he wants the tone of the speech to be. In particular, he got into a fight with the chef on what to serve at his first Imperial Party. Although Mr FLuffy, being a stuffed bunny doesn't eat, he nevertheless feels a kindred tie and spirit with the other animals. As such, he had violently opposed the decision of the chef to serve various roasts and sushi at the party. A fight between the AK 47 totting Mr Fluffy and the pan wielding sous chef and knife wielding sushi chef was onyl avoided by the timely intervention of the egg timer signalling the readiness of the souffle. With sugar in their bellies they decided to compromise on faux protein (although the roast chef is still sulking at the decision).*


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