EU Subsidies Lost: Cameron Hijacks Summit with Rebate Spat

By in Brussels

British Prime Minister David Cameron wanted to talk about agricultural subsidies on Thursday. Zoom
REUTERS

British Prime Minister David Cameron wanted to talk about agricultural subsidies on Thursday.

The European Union summit on Thursday night was supposed to be a demonstration of European harmony -- until British Prime Minister David Cameron arrived. He insisted that the UK budget rebate go untouched, launching hours of pointless debate.

The British are nothing if not predictable. On Thursday evening, European leaders gathered in Brussels for an EU summit that was supposed to be dedicated to combating the economic crisis that has gripped the Continent. Appallingly high youth unemployment was on the agenda as was help for mid-sized companies in Europe, which have recently experienced difficulty in securing financing.

Controversial issues were nowhere to be found on the list of talking points. Europe wanted to go into the summer break on a harmonious note.

But even before the meeting got started, British Prime Minister David Cameron managed to find conflict where none was wanted. As he arrived in Brussels, he said he was going to focus on defending the so-called UK rebate -- the sum of money Britain gets back from it EU budget contributions due to the limited benefits it receives from European agricultural subsidies.

Other summit participants were less than impressed. Cameron is "never happy" when it comes to the EU budget, complained European Parliament President Martin Schulz.

The Cameron offensive was particularly surprising given that the European Council and Parliament on Thursday morning had finally reached an important agreement on the bloc's budget. Following months of at times acrimonious debate among EU member states, a deal was reached on the budget for the years from 2014 to 2020. And it largely reflected the demands made by Britain, namely that it would be capped at €980 billion ($1.28 trillion). Demands for improvements made by the Parliament were largely rejected. All that was left for EU leaders on Thursday night was to give the deal their thumbs up.

Defending the UK Rebate

But Cameron was able to find something that he didn't approve of. In addition to the budget, the EU also recently reached agreement on a reform to the bloc's agricultural budget and subsidies, a deal which changed the system of calculation used to determine the British rebate, negotiated by Margaret Thatcher in 1984. If the agricultural budget shrinks, so too does the rebate received by London -- and Cameron could easily imagine how that would be received in the euro-skeptic press back home. He insisted that the size of the rebate remain unchanged, as per the deal made at the European budget summit in February.

That, though, was something that French President François Hollande could not accept; the rebate, after all, is essentially financed by Britain's EU partners.

The sums involved in the conflict were relatively miniscule given the amounts often at stake in EU agreements. But both sides in the debate were more concerned with questions of principle and the summit devolved, as so many of them do, into a marathon of cooking the numbers.

In the end, a "satisfactory solution" was found, as Chancellor Angela Merkel said following the meeting without revealing any of the details. But many participants were left with the impression that the hours of discussion devoted to the question were little more than a waste of time.

Symbolism and Youth Unemployment

Aside from that debate, however, not much happened in Brussels on Thursday evening. The euro crisis has been quiet for some time now and the German general elections this autumn have put the brakes on decisions of substance. Indeed, many in Brussels have been complaining for months that Berlin is uninterested in addressing vital issues for fear of endangering Merkel's re-election. The chancellor herself has said that she knows of no European decision that has been delayed as a result of German elections. But European Council President Herman van Rompuy was originally scheduled to present proposals for the reform of the common currency on Thursday, but -- at the behest of the Germans -- his presentation has been pushed back until the next summit in October.

Instead, the 27 EU leaders focused on sending a positive message. The €6 billion earmarked for the fight against youth unemployment, for example, is now to be spent by the end of 2015 rather than by 2020 as originally planned. The hope is that a stronger effect will be the result. To further demonstrate that they were taking the issue seriously, leaders also invited labor union and employer representatives.

Still, European Parliament President Schulz said the measure was "but a drop in the ocean." And he wasn't alone. Both Italy and Spain demanded on Thursday night that more money be made available for the fight against unemployment, but Merkel rejected the request. We can't just keep focusing on "new funds," she said, adding that the money already committed "cannot be disregarded."

She also noted that the next summit focusing on youth unemployment is scheduled to take place in Berlin next Wednesday. Together with Hollande, Merkel is to lead a meeting of EU labor ministers and employment agency heads to discuss the best practices in dealing with soft labor markets.

Not everyone seemed particularly convinced by her optimism. Luxembourg Prime Minister Jean-Claude Juncker noted that, under his presidency in 1997, the European Council agreed on a guarantee to provide young jobseekers with work or training within six months. "Only very few countries actually did so," Juncker said. "I hope that we are more successful this time."

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1. EU Budget
BobUK 06/28/2013
'Cameron is never happy with EU budget', can anyone really say that they are happy with it?
2. Typical
peterboyle.4848 06/28/2013
Once England holds it's referendum on EU membership, England may well leave the Union anyway. But until then, British Exceptionalism (like American Exceptionalism) is something that is either tolerated as one would a toddlers antics or "Corrected" through diciplinary measures. GB has a history of only playing by the rules when they write the rules and the rules favor them. In truth, if GB left the Union (or was expelled), the City of London would move to the Continent for all intents and purposes. The US says it wants a Trade Deal with the EU, so they would likely support the EU, leave England to 'swing like a pendulum do' and not jeapordize negotiations by standing up for GB. (It remains to be seen why the EU would want to have America as a partner - its well earned reputation for considering itself another 'special case'.) Since neither GB nor the US has a good reputation for playing well with others, I'd say the EU would be better without them.
3. british politics
spon-facebook-10000139396 06/28/2013
The political systems of the Anglo-Saxon liberal democracies are confrontational not consensual. We have never lost our taste for public executions: in Britain when we kick our Prime Ministers out, we like to see them emerge from the doors of 10 Downing Street beaten, humiliated and chastened within 24 hours of the election. If you think the Brits are bad; try the Australians on for size. You'll be in for a shock.
4. EU talks
ephesian416 06/28/2013
This article is a joke when it comes to objective reporting. It states that the UK rebate was confirmed in February but the EU has now decided to apply a different method of calculation so that the UK looses the rebate. And the French and apparently the Germans complain when the British say 'no'? Just remind us, what did Merkel say when the EU proposed reducing emissions from cars, I think there was a nein in there somewhere! There is no such thing as community in the EU, it's a club where the strongest achieve their aims and they don't care if they damage the weak. The British must stand up for themselves, in this respect the French and Germans lead the way and it has absolutely nothing to do with exceptionalism or confrontation as suggested above; it's called self-interest.
5. It's not fair
Hoover 06/28/2013
Of course Cameron has recognised that an EU summit to cure youth unemployment is absurd. It amuses me to hear that Europe wanted harmony - there are serious differences of opinion in the EU, but they wanted the summit to pretend those differences don't exist. If they want to give away six billion euros, let them give away six billion euros. It's not that hard! All they need do is call one another on the telephone and decide how much the sum should be. Juncker seems to be getting the message: the EU often makes dramatic-sounding resolutions to solve problems, but in the end they achieve nothing. Instead, member states do or do not make the effort to address problems at home.
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