March 26, 2007
EU at 50: great party without the usual hangover
José Manuel Barroso raised a few titters in Berlin at the weekend with his assertion that "size matters" - a reference to the fact that the 480m people of the European Union made it a big player in the world.
I took away from the EU summit in Berlin a different impression: the little things matter. Strip away the speechifying and the Berlin declaration - a worthy enough attempt to mark the Union’s 50th birthday - and what will linger from the summit was the fact that 27 European leaders (and their spouses) actually seemed to have a good time.
That may sound trivial, but sometimes European Union leaders spend so much time slagging off Brussels or other national leaders that they forget that they are in this together, they have things in common, and they need to make it work.
As one seasoned diplomat told me, Angela Merkel is a natural at creating the right atmosphere. Down to earth, unfussy and not obviously out to steal the limelight herself, she removed any risk of confrontation from the weekend celebrations.
Apparently she doused down Vaclav Klaus, the Czech president, before the summit with a disarming phone call, which apparently began: "Hello Vaclav. I read you’re upset about something." Having moaned about the secretive way in which Merkel had drafted the declaration, he was the model of good behaviour at the summit.
Merkel’s human skills were evident throughout. She sat next to Klaus at dinner on Saturday night, and during a sun drenched walkabout on Sunday she made sure to stay close to Lech Kaczinski, the Polish president, who seems to be succumbing to her charms by the day.
This matters because Merkel needs people like Klaus and Kaczinski on board if she is going to agree a roadmap out of the EU’s constitutional mess in June. They are less likely to spend the next three months attacking her and raising the stakes after the weekend’s events.
"The summit was a bit like Hampton Court," said another diplomat, a reference to the surprisingly successful and innovative summit organised by Tony Blair during the British presidency in October 2005, which turned into a therapy session by the Thames.
Again the weather was unseasonably warm and the EU leaders seemed to rediscover some sense of comradeship in the Tudor palace. A few months later Blair was able to pull off a deal on the EU budget, against the odds.
Make no mistake, Ms Merkel’s task over the next few weeks will be highly complex, not least because of the impending change of leadership in France and Britain. Neither the new French president nor Gordon Brown, Britain’s prime minister-in-waiting, were there to feel the positive euro-vibe in Berlin.
But after the weekend’s bonding session in Berlin, I would say Ms Merkel’s chances of getting her way on the constitution in June have risen to better than evens.
If by “worthy” you mean “claimed credit for a load of things the EU had nothing to do with”, then I suppose you’re right about the Berlin Declaration.
But, Blair “able to pull off a deal on the EU budget, against the odds”?
Yes, how tricky it must have been to persuade colleagues to agree a deal while dangling billions of pounds more of public cash for the EU budget every year.
Can’t have been that - must’ve been the pleasant atmos.
Despite auditors not having been able to explain how the EU has spent the “majority” of the tens of billions we and other Europeans have handed over from our hard-earned cash during the last twelve years.
Just a few months worth of that money could otherwise have now been used to stop the NHS cuts. The amounts we’re paying the EU dwarf many spending pledges Brown flourishes in his Budgets.
Oh well. I know I can never co-operate with anyone without handing them my wallet first. Totally impossible!
“Having things in common” is one thing. And right. But that doesn’t necessarily mean we have to make the *EU* work. It’s not the only way.
Posted by: Stuart Coster | March 27th, 2007 at 3:54 pm | Report this commentReaders might like to examine Commissioner Wallstrom’s recent blog posting on the issue of the accounts. The House of Lords report on the matter is also illuminating.
But don’t let that all get in the way of a great sound-bite attack on the EU for “auditors not being able to explain how the EU has spent the majority of” its money.
http://blogs.ec.europa.eu/blog_wallstrom/page/wallstrom?entry=the_commission_s_accounts
http://www.publications.parliament.uk/pa/ld200506/ldselect/ldeucom/270/270i.pdf
Posted by: Chris Sherwood | March 28th, 2007 at 10:26 am | Report this commentBarroso is wrong that “size matters”. If it were true China and India would be the richest countries in the world but they are among the poorest. The richest country in Asia is tiny Singapore. The richest countries in Europe include Norway, Iceland and Switzerland (all outside the EU) and Luxembourg. With the gradual elimination of trade barriers worldwide and the emergence of a global market “size” becomes less and less important compared to quality of governance and open access to the world market which dwarves all national markets and the EU’s common market. The EU’s track record of producing heavy-handed and costly regulation and its protectionist instincts have become contrary to our real interests in the emerging global market. As trade barriers tend towards zero the advantage of being inside the EU’s custom’s union is vanishing like a morning mist and all we are left with is undemocratic politics and badly thought-out regulation.
Posted by: John | March 31st, 2007 at 2:54 am | Report this commentReaders might be interested to know that candidate countries like Croatia and Turkey were excluded from the celebrations. This might be a wrong message to the candidate and potential candidates in Balkan. Although they are not EU members, they belive in the EU vision. There is also another paradox: candidate countries signed the EU constitution, but they are not wanted to party with EU member states.
Posted by: Turkishpolitix | April 1st, 2007 at 4:22 pm | Report this commentHere is a link for those who want to read more: http://www.turkishpolitix.com/blog/2007/03/turkey-excluded-from-european-unions.html
According to wikipedia ( http://en.wikipedia.org/wiki/List_of_European_countries_by_GDP_per_capita ), the richest country in Europe per capita is Luxembourg, which is in the EU. The second is Norway, which is in EFTA (semi-detached from the EU). The third is now Ireland, which is in the EU.
Of the top 10, 6 are in the EU. Those that are not are Norway (massive oil reserves), Iceland, San Marino, and Switzerland (unique banking industry). All of these have a privileged relationship with the EU. Why do they want such a relationship? Because size matters. Doh!
It is true that the EU has produced an awful lot of badly thought out regulation. That is a problem that needs to be fixed, and soon. There are encouraging signs that the message has got through - industry has much more confidence now that proposed EU regulations will be a) subjected to scrutiny by national parliaments b) subjected to the “better regulation” and simplification tests, and c) subjected to impact assessments that are becoming increasingly professional (they have not always been worthy of the name). The rate of production of legislative proposals has slowed dramatically since Barroso came in, and for the first time there is a programme, with high level political backing, aiming at the repeal of obsolete or unhelpful EU legislation. This would have been unthinkable 10 years ago. There is a long way to go, but progress is being made.
Posted by: Chris Sherwood | April 2nd, 2007 at 11:05 am | Report this commentThe list of richest countries in the World shows that the three non-trivial West European countries that refuse to join the EU feature prominently in the world wealth league; Norway (2nd), Iceland (3rd) and Switzerland (4th in the world) are all outside the EU. Ireland (which stays outside Schengan) is 5th. Denmark (6th), Sweden (9th) and the UK (13th in the world) all refuse to use the Euro. The large Continental countries trail in behind these at 18th (France), 18th (Germany) and 19th (Italy) and of course trail the US (8th) and Canada (16th). It would seem that contrary to Barosso’s opinion size is not a factor in the wealth of nations. Indeed it appears that a refusal to join EU programs is actually a much better indicator of economic health.
The reason that size is not important in the 21st century is that low international tariffs are creating the biggest market of all - one encompassing the entire planet. Membership of the EU’s custom’s union has little advantage in such a world, and may even be a disadvantage when it introduces an obligation to comply with heavy-handed regulation that Commissioner Verheugan estimates costs European businesses 600 million a year (>3 times more than the Commission’s own estimate for any advantage that the Single market may bring). In a globalized world, the EU makes you poor because its lack of democratic accountability and central planning leads to bad and costly governance that the people cannot change through their votes. The richest countries in Europe refuse to be part of it and Britain should take note of their example.
Posted by: John | April 2nd, 2007 at 2:58 pm | Report this commentJohn are you trying to resurrect the old flogging horse of EFTA here?
Of the 10 members that EFTA has had, 6 have left to join the EU. Of the rich countries you mention that are not in the EU, it is interesting to note that they are all in EFTA. Why? To get access to the EU’s market. Why? Because it’s big. Ergo: size does matter.
According to your world view, might as well not be in any FTA, since “low international tariffs are creating the biggest market of all - one encompassing the entire planet”. But the very countries you hold up as examples of why size doesn’t matter are the very countries that are in EFTA as a half-way house to EU membership. If your view of the world were correct, EU members would be rushing for the door to join EFTA, and EFTA members would be rushing for the door to get out of that and stick with the WTO only. But that is not happening - in fact the trend is in the opposite direction, precisely because all the countries concerned see that size does matter.
The factoid you wheel out that the Commission’s own stats claim that the harm caused by red tape is greater than the benefits of the internal market is a well-known non-fact. It is made up and based on a very basic (and intentional) misunderstanding of the Commission’s numbers. Moreover, it ignores the fact that the single market, while too bureaucratic, is an awful lot less bureaucratic than it would be if 27 countries each had their own sets of rules.
Posted by: Chris Sherwood | April 2nd, 2007 at 3:20 pm | Report this commentBritain should most assuredly seek free trade with as many partners as possible. But you do not need to be in the EU or even EFTA to have free access to the European market. Mexico for example has a free trade agreement with the EU. It is also a member of NAFTA and has a free-trade agreement with Japan. The markets to which it has free access to dwarf those that Britain has free access to and it is not required to load up the bulk of its industry serving domestic demand with heavy-handed EU regulation. It remains a democracy whose people are not required to live under laws its people disagree with but must accept when outvoted by Qualified Majority Votes.
http://www.globalbritain.org/BNN/BN08.htm
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Posted by: John | April 2nd, 2007 at 4:14 pm | Report this comment“Of course, Britain could survive outside the EU…We could probably get access to the single market as Norway and Switzerland do…” - Tony Blair - Speech in Ghent, 23rd February 2000
John what happened to your argument that not being in the EU was good for GDP per capita? Surely you’re not claiming Mexico as an example?
Posted by: Chris | April 2nd, 2007 at 4:42 pm | Report this commentJohn coming back to your quote of the well-known myth that the Commission’s own stats point to greater costs than benefits of the internal market, I must say I find the FT’s Brussels blog an odd place to be reading such tosh. If you need to resort to totally baseless lies like this to advance your case, better to do it on a site where the readership is more easily duped. Doesn’t the Sun have a blog for you lot to play on?
Posted by: Chris Sherwood | April 2nd, 2007 at 4:46 pm | Report this commentThe Commission’s estimate for additional GDP due to the Single Market is from their report “The Internal Market – Ten Years without Frontiers” available on their website at the link below. On page 6 it says “The Commission estimates that EU GDP in 2002 is 1.8% or €164.5 billion higher thanks to the Internal Market”.
http://ec.europa.eu/internal_market/10years/docs/workingdoc/workingdoc_en.pdf
If you search you will find many references to this figure, including the following speech from the minister for Trade & Industry in the European Parliamnent.
http://www.dti.gov.uk/ministers/speeches/hewitt210103.html
You will find Verheugen’s estimate of 600m euro per year cost of EU Single regulation in … the FT.
http://www.ft.com/cms/s/101cf670-57fb-11db-be9f-0000779e2340.html
p.s. I’ve never read the Sun. What’s it like?
Posted by: John | April 2nd, 2007 at 6:27 pm | Report this commentJohn I suppose it never occurred to you that the NET benefit of the internal market could be E165 billion, AFTER taking into account all the costs? And that this benefit could be even greater if the costs (such as regulatory burden) were reduced?
Posted by: Chris Sherwood | April 3rd, 2007 at 8:19 am | Report this commentJohn, the cost of red tape rises exponentially as the burdrn rises. So a reduction of 25% of the red tape might reduce the costs by 75%. Nowhere in the Commission’s papers that I can see does it talk about 600 billion.
More importantly, the red tape burden discussed by the Commission is that imposed not by the EU alone. The FT article by George Parker talks about “EU” regulation, which is wrong if you read the Commission’s papers. Of course the whole point of the Internal Market is to reduce national regulation. And you thought the FT was biased in favour of the EU…
Posted by: Chris Sherwood | April 3rd, 2007 at 9:32 am | Report this commentThe Commission Paper is from 2002 and does not reveal whether the costs of EU regulation were taken into account or not in their estimate of €165bn increased GDP due to the Single Market. The regulatory costs only appears in Commissioner Verheugen’s 2006 interview with the FT where he estimates “the annual burden for business at up to €600bn ($756bn, £405bn) compared with the original estimate of €320bn”. So even if the original estimate of €320bn was taken into account in the 2002 paper, the additional €280bn costs in the more recent figure from Verheugen would still be enough to negate the benefit of the Single Market.
Posted by: John | April 3rd, 2007 at 9:43 am | Report this commentJohn are you ignoring the fact that we are not talking about EU red tape but European red tape here on purpose?
As for the cost of red tape not being included in the Commission’s study on the benefits of the IM to GDP, it would seem self-evident that if you want to know what the overall effects of the IM are, you look at a study of the overall effects of the IM, and not a study that looks at one element of the overall picture. Of course the benefit of the IM is net of all costs.
You are taking a company balance sheet and comparing the high HR costs to the small profit made on the bottom line. It’s sheer dishonesty.
Posted by: Chris Sherwood | April 3rd, 2007 at 10:29 am | Report this commentAll you discussing is by how much the cost of EU single market regulation exceeds the benefits. On your most optimistic scenario (for which there is no evidence) it is €165bn - €280bn = €115bn per year net cost to the combined EU economy. On a more literal reading it is €165bn-€600bn = €435bn net cost. Either way cost exceeds benefits.
Posted by: John | April 3rd, 2007 at 8:19 pm | Report this commentJohn 1.8% of GDP is the net benefit of the single market.
The figures quoted by Verheugen do not relate to EU red tape but to all red tape faced by companies in the EU - most of which is national.
Posted by: Chris Sherwood | April 4th, 2007 at 9:07 am | Report this commentYou are twisting in the wind again Chris. The 10/2006 report from the FT says “He (Commisioner Verheugen) said new evaluation methodology of the administrative costs of EU legislation - including “gold plating” of laws by some member states - put the annual burden for business at up to €600bn ($756bn, £405bn) compared with the original estimate of €320bn. That figure does not include the compliance costs of the laws”.
Even for a man like you who denies what 6 simple words in the Laeken declaration mean, it is a bit much to say he is talking about the administrative costs of anything other than EU legislation here.
Posted by: John | April 4th, 2007 at 12:12 pm | Report this commentJohn as I said before, the FT (George Parker) got it wrong. You might try reading the document before embarrassing yourself with such bloopers. It states quite explicitly that it addresses red tape at national and EU level.
I never thought I’d see you put such blind faith in the “pro-European” FT…
Posted by: Chris Sherwood | April 4th, 2007 at 12:24 pm | Report this commentYou haven’t got a leg to stand on Chris. What national “Single Market” legislation are you thinking of? ;-). The FT article does not refer to the 2002 report, which you can be sure I have read fully. The FT article is an interview with the responsible Commissioner who says the administrative costs of EU single market regulation were revised upwards in 2006 from €320bn to €600bn per annum (not even including compliance costs which must be hefty). The difference between those two figures alone is far higher than the Commission’s 2002 estimate of the benefit of the Single Market. You have no wiggle-room here. However you look at it, the costs exceed the benefits.
I suggest that if you want to see any red faces you should look in the mirror.
Posted by: John | April 4th, 2007 at 8:48 pm | Report this commentThis is really hilarious. John, the Commissioner wasn’t doing an interview apropos of nothing. He was presenting the study. The study talks about red tape at EU and national level. There’s no getting away from that however hard you try.
Posted by: Chris Sherwood | April 5th, 2007 at 1:14 pm | Report this commentAnd John of course the study that Verheugen was referring to was not the 2002 study on the benefits of the IM, which you say you have read, but the 2006 study on the costs of red tape, which you manifestly have not read.
Posted by: Chris Sherwood | April 5th, 2007 at 1:16 pm | Report this commentBluster gets you nowhere Chris. The British Chamber of Commerce estimates that 72.5% of the total administrative cost of ALL regulation on UK business is due to EU red tape. Furthermore, they doubt the EU’s proposed commitment to reduce regulation by 25% will translate into any noticeable reduction in the net burden for UK business because the most burdensome EU regulation will not be tackled. How do you square that with your claim that a reduction of 25% of the EU red tape might reduce costs by 75%?
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http://www.chamberonline.co.uk/YUsDyjBoarMi4g.html
The BCC’s annual Burdens Barometer calculates the cumulative cost of EU red tape to the UK economy since 1998 at an enormous £40,357 billion, more than 72.5 per cent of the £55.66 billion total cost.
Posted by: John | April 5th, 2007 at 11:05 pm | Report this commentWhilst the EU appears to be moving in the right direction with its proposed commitment of a 25 per cent reduction, this is actually merely a gross target instead of a net one. Until there is a net reduction in administrative burdens it is debatable if any businesses in the UK will notice any reduction
According to the Regulatory Impact Assessments that are published alongside the EU Regulations, amongst some of the most burdensome EU regulations are:
• The Working Time Regulations, introduced in 1999 has a recurring cost of £1,975 billion a year and has cost business £14,210 billion
• The Vehicle Excise Duty (Reduced Pollution Amendment) Regulations 2000 have a recurring cost of £1,225 billion a year, costing business £7,962 billion since its introduction.
• The Sale and Supply of Goods to Consumers Regulations 2002 has a £285 million recurring cost and has cost business £1,211 billion since its introduction.
Wasn’t my ’sound-bite’ Chris, but glad you thought it was ‘great’. I actually got it pretty much from the EU Court of Auditors press release.
eg. quotes like (and note the frequent occurence of the word “majority”):
“weak internal controls for the majority of EU expenditure, both within Member States and at the Commission”
-and-
“high incidence of errors in the underlying transactions”
-and-
“Overdeclarations and ineligible expenditure continue to go undetected within the majority of EU expenditure areas”
Enough already?
There’s plenty more. Read it for yourself here:
http://www.eca.eu.int/press/press_release/docs/2006/eca0629en.pdf
I’m not sure relying on Margot Wallström’s take - being employed at vast expense to sell us the benefits of the EU - is really the most responsible approach to getting to the reality of the serious problem of EU waste and fraud.
The EU isn’t playing with ’spare’ money that none of us needs. The folly of vast central budgets overseen by democratically remote institutions is inevitably a recipe for financial disaster.
And that’s daily depriving hard-pressed public services across Europe that actually serve those who need help the most.
Posted by: Stuart Coster | April 11th, 2007 at 4:43 pm | Report this commentStuart I am not sure I understand your objection to the EU budget. In what sense is it vast? It is 1% of GDP. It represents the willingness of the Member States to pay towards the achievement of certain well-defined common objectives. In that sense it is considerably fairer and less burdensome than a national budget - much vaster, also overseen by remote institutions, and also not being spent on public services that local people need most.
As for whose opinion on the Eu’s accounting problems is more valid, you takes your pick. Personally, I find the arguments advanced by the UK’s own auditor, the House of Lords, and the Commissioner far more convincing than those advanced by anti-European fanatics in the UK.
I would propose the following actions to resolve the issue:
Posted by: Chris Sherwood | April 16th, 2007 at 12:08 pm | Report this comment1. Make the EU’s accounts subject to exactly the same standards applied by all EU Member States’ own national governments.
2. Make EU and national governments’ accounts subject to public naming and shaming until the issues are fixed.
3. Explicitly remove from the Commission any responsibility for accounting for EU funds paid to national or sub-national authorities. The proper use of this money should be an issue for those who spend it, as long as the continued provision of such funds is sibject to an auditor’s sign-off.
John it may interest you know that Commissioner Verheugen confirmed to the EP this month that the cost of red tape he refers to is indeed overwhelmingly national red tape. He puts a figure on it - some 70% in fact.
Posted by: Chris Sherwood | April 27th, 2007 at 9:35 am | Report this commentEU at 50: great party without the usual hangover great article i read that and i love it without hangover good thing
Posted by: jackee | July 2nd, 2007 at 2:27 pm | Report this commentnice blogging party with hangover it good may be they restrict to drink two or three glasses of wine and thats good because more wine give u hangover and u feeling lnsulting in party
Posted by: tony | July 4th, 2007 at 4:30 am | Report this commentMost of the time blogs don’t carry alot of information and just made for time pass. But I think your blog is the one where I have learned many things with your practicles and experiences. Thanks
Posted by: penisa | August 21st, 2007 at 7:25 am | Report this commentit was very nice to go through this blog. usually we cant find that much informative blogs like this. thanks.
Posted by: abuy | August 27th, 2007 at 10:46 am | Report this commentEuropeans do indeed have a lot in common and possibly more than they think…Many Europeans share the unpleasant feeling that the EU integration is moving forward without their consent.
In an attempt to remedy the “democratic deficit” in the EU which most people agree it is not a myth but a reality, Notre Europe, the European think tank founded by Delors, is currently setting up a innovative project called “Tomorrow’s Europe”.
In the Fall of 2007, for the first time ever, Tomorrow’s Europe will bring together a representative microcosm of some 500 citizens from all 27 EU member states for a weekend of deliberation in Brussels. They will discuss the future of the EU.
Imagine ordinary European citizens in the same room—to what extent will they be able to talk to each other? Will they understand each other’s concerns?
I invite you to visit their website as I believe “Tomorrow’s Europe” promises to be an exciting and thought-provoking event for citizens and EU decision-makers alike.
Follow the link: http://www.tomorrowseurope.eu/
Posted by: eva | August 29th, 2007 at 2:16 pm | Report this commentVery nice post. I liked your writing style and the way you covered the topic.
Posted by: HGH | August 31st, 2007 at 1:14 pm | Report this commentGood advice. Another tip is to have some food in your stomach before drinking to help delay absorption of alcohol. Drinking
Posted by: Aaliya | January 28th, 2008 at 10:01 am | Report this commentslowly helps too. Women are affected by alcohol more than men.A good plan to help detoxify alcohol and prevent a hangover is to take 50 mgs each of B1, B2, B3, 400mcg folic acid,100mcg of
B12, 15-30 mg. of zinc and 300-500 mg of magnesium and a good antioxidant with food before drinking. Also taking 1000mg Vitamin C every 2 hours is helpful.
I know of someone who swears by 1 tbsp Brewer’s Yeast Powder to clear a hangover quickly should the demon stuff get the
better of you.