Tuesday, December 20, 2005

If you actually wade through the details of the EU budget deal, there are some interesting points which make the deal look even better:
  • On agriculture, spending will actually fall by 7.3%. And the new member states will be fitted in under that ceiling - not just the ten who joined last year who are currently being phased in to the CAP, but also Romania and Bulgaria! This amounts to a large reduction (about 20%?) in agricultural spending in the 15 old member states.
  • Contrast this with the overall rise in spending in other areas: spending on research (to boost our economic competitiveness - part of what Tony Blair wanted in calling for a more future-oriented budget) will rise by 75% between 2006 and 2013.
  • Economic help to less prosperous regions (which will continue to include some UK regions) will rise by about 6%. This means that it, and not the CAP, will be the largest item in the EU budget. Spending on police and judicial cooperation will more than double. External aid will rise by about a third.

Meanwhile, the announcement in Hong Kong at the WTO talks that the EU has agreed to phase out all remainig agricultural export subsidies by 2013 is also welcome news. Coming straight after the summit, it shows that the commitment to further agricultural reform is indeed serious.

Finally, I see that the much-commented-on adjustment to the UK rebate will be phased in over two years in 2009-10, giving the Treasury plenty of time to plan ahead. And as to the equity of the UK's contribution, I note that it will increase by 63%, while French contributions will rise by 116% and those of Italy by 130%. These two countries have the same population as Britain, and the deal means we will henceforth make broadly equal net contributions. As they have slightly smaller economies than Britain, it means their net contribution will be a higher proportion of their economies than Britain's.