WEDNESDAY NIGHT’S mauling by the Commons of prime minister David Cameron over the EU budget will have added a most unwelcome, albeit not unexpected, dimension to yesterday’s meeting between Taoiseach Enda Kenny and Chancellor Angela Merkel. One can just see the chancellor shrugging her shoulders with a weary, wry smile as she explains that, budgetwise, “unfortunately, Herr Taoiseach, the tide is not with you. Your British friends are likely to be even more difficult than any grief you’ll get from Berlin. Another schnapps, perhaps?”
Yesterday’s visit to Berlin was predominantly about testing the waters on the big agenda items faced by the Irish presidency from January. And the water is hot. No one is under any illusion that the November 22nd summit will agree on the proposed seven-year budget, which will then be kicked forward to the Irish to secure a deal. A poisoned chalice – negotiations involve balancing vital Irish interests, not least in maintaining Common Agricultural Policy payments to us of €1.7 billion a year, while trying to play honest broker to achieve an acceptable EU-wide compromise. Then there’s the small matter of getting banking regulation in place.
But Mr Kenny will certainly also be concerned by the Commons vote from a longer-term perspective: another straw in the wind, more evidence of the slippery slope to Britain’s disengagement from the EU that Ireland dreads. Bad enough that Mr Cameron should be humiliatingly deserted by 52 MPs of his out-of-control party, with more ready to vote down any agreed budget, but that even the notionally pro-European Labour Party should gleefully join their bandwagon will have chilled Mr Kenny to the marrow. Labour’s opportunism will make it more difficult to resist siren calls for an in-out EU referendum in the next parliament. The result is scarcely in doubt. Little wonder Blairite europhiles were reported to have taken the whip with poor grace.
Not that Mr Cameron was exactly capitulating to Brussels in the first place. He has threatened to veto any budget deal that does not freeze current spending in real terms (the Commons non-binding vote mandates real cuts). Depending on interpretations of what he means that will require cutting between €80 billion and €200 billion from the commission’s initial €1 trillion proposal.
German proposals lie somewhere in between, with others like the Swedes, the Dutch and Danes also lining up to demand that the EU share the pain in terms of cuts that others face. Net-beneficiary states like Poland oppose cuts, warning that if no deal is agreed, the current EU budget will remain in force provisionally with 2 per cent added each year for inflation.
In the smoke and confusion, however, it is all too easily forgotten that the EU’s budget is in fact a relatively modest affair. At a mere 1 per cent of EU gross national income it is smaller than that of a medium-sized country like Austria. In these straitened times there is certainly an issue of cash being in short supply, but in Britain it has also become a proxy for the great Europe debate. A poisoned chalice, Herr Taoiseach.