Monday, June 20, 2005

Supranationalist 2

Concerning the European Budget

To the people of Europe:

The European Budget is very small (100 million euros annualy for 450 million citizens), and yet it raises so much controversy these days. The most simple explanation is that money is the meter of power relations in Europe. As far as money are concerned, there is little political compromise that can cover a defeat at the budgetary level: if you had 5 and you end up with 3, there is no clearer defeat.

Each member state thinks this way, thus it is particularly difficult to reach an agreeement. This is particularly the case when a conflict is taking place at the level of principles of organisation of a polity; to translate the conflict in economic terms is very easy, and it gives a neat impression as to who is the winner and who is the loser.

From the perspective of the Union, however, everyone is a loser if there is no agreement as to the repartition of the ressources for the sake of enhancing the progress of the whole. Hence, the conflict, be it between France and the UK, or between any other member state, is not a constructive tension; it can only point to a lack of a shared interest in the European project. Moreover, the European people fail to understand what are the principles of collection and expense of european money.

These tensions are bound to remain so long that the only actor in the creation of ressources of the Union are member states. By deciding alone what are the ressources to be attributed to the Union, they can only protect their national intersts, either by opposing any increase of ressources, or by allowing an increase only if this will be allocated to the benefit of national interests.

We are presently stuck with an anachronistic budget, which unduly favours States like France by heavily subsidizing agriculture.

A proper constitution should achieve two things. It should entrench the principle of no taxation without representation, and it should allow for a scope of innovation as far as expenses are concerned, since Europe is in a desperate need for the creation of new employments and not in the maintaning of archaic agricultural structures.

The first principle, no taxation without representation, create a link between european people and the creation of ressources at the european level. This way, the issue of money would not be a private question of national governments that decide those issues in the shadows, but it would be a open issue which concern the people and their representative ( at the European Parliament for instance).

The second principle, innovation in expenses, would carve out for the Union the power to allocate money where money are primarily needed. It is widely felt at the moment that, for example, european unemployment is plaguing citizens; it is, therefore, of very little advantage to know that agricultural expenses can be safeguarded at their very high level. Primacy should be given to more important issues, and where primacy lies should be, once again, decided by the representative of the people along with the representative of the executives of the states.

Hamilton, in the Federalist No. 30, said:

"Money is, with propriety, considered as the vital principle of the body politic; as that which sustains its life and motion, and enables it to perform its most essential functions. A complete power, therefore, to procure a regular and adequate supply of it, as far as the resources of the community will permit, may be regarded as an indispensable ingredient in every constitution. From a deficiency in this particular, one of two evils must ensue; either the people must be subjected to continual plunder, as a substitute for a more eligible mode of supplying the public wants, or the government must sink into a fatal atrophy, and, in a short course of time, perish."

Being unable to reach an agreement concerning the budget, the Union declared its weakness vis-a-vis political crisis. Even if it did manage to reach a compromise, however, it is not evident whether the citizens will be the beneficiary of that agreement. This can only be safeguarded by creating a direct control of the people over the expenses of the Union, that is by empowering the representatives of the European people to decide the allocation of expenses.


Raphaƫl Paour said...

Well done! I agree with Lorenzo's main point that the budget should not be decided by the States and that one State should impede any policy desired by a majority of the European population through the power to reject the budget that would finance it. Thus the first principle "no taxation without representation" seems uncontroversial to me. The second however I don't see the need for: "innovation in expenses". What domains should be financed is an important political question. It is very controversial, and rightfully so. This principle doesn't make it less so as remains the controversial question of "what is innovative?". In the current debates on the budget people seem to take for granted that agriculture is not whereas science is. I don't see why at all. That scientific research is underfinanced by the EU seems obvious, but that agriculture should be less financed because it would be a marginal and anachronous activity is a controversial statement. In many respects agriculture is a domain in which there is need of a massive attention by political actors (ecology, social equilibrium, health...) with a view to general interest. There is no reason however why the budget should favour France rather than any other country, that is for sure.

Finally Lorenzo wrote "The most simple explanation is that money is the meter of power relations in Europe. As far as money are concerned, there is little political compromise that can cover a defeat at the budgetary level: if you had 5 and you end up with 3, there is no clearer defeat. Each member state thinks this way, thus it is particularly difficult to reach an agreeement." This explains well the behaviour of the French representatives as well as that of Great Britain; countries such as Poland and Hungary, on the contrary, proposed to lower the level of the spending that benefit them in hope of inspiring richer countries to reach an agreement through compromise. With no success, unfortunately!

Lorenzo Zucca said...

Thanks Raphael, this is helpful as far as my second principle is concerned. It is still very unclear! When I talk about 'innovation in expenses', what I mean is that the European budget should reflect to a certain extent the present concerns of European people. For example, I think that one the biggest present concern is unemployment. European people should be able to see what Europe is doing in order to cope with this problem. To say the least, many unemployed people do not care at all about having a modern agricultural system if they can't afford a single carrot.

And if the agricultural policies are unavoidable, then the minimal necessary thing would be to explain to European people why this is so.

Anonymous said...

The size of the annual EU budget is actually 100 billion, not million...

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