L'Ombre de l'Olivier

The Shadow of the Olive Tree

being the maunderings of an Englishman on the Côte d'Azur

30 September 2007 Blog Home : September 2007 : Permalink

Not Paying For EU

One thng that I've never really understood about British politicians post Mrs T is their deference to Brussels. Time and again we see the pol head off to Brussels with a bunch of red lines and non-negotiable demands which then crumble in the face of opposition from the rest, even if, as frequently happens, the UK has some allies for parts of what it wants. The deal here is that the UK is one of two (Germany being the other) major contributors to the EU budget and in almost all places appart from the corridors of power in Brussels the folk who pay hold the whip hand. In other words if the UK decides not to agree to something it could quite simply say it won't contribute to the EU until this particular item is resolved in a way that is acceptable to the UK. Take the CAP for example. A courageous UK government would simply say, if you don't reform the CAP the way we want we won't pay for any of it. Since, even with the rebate, the UK contributes rather a lot to the CAP budget this would get their attention, and of course if they didn't do what the UK wanted they would be free to make up the shortfall in subsidy on their own.

So what could the EU do if Britain (or any other contributor nation) acted this way? Clearly they could stop EU money going to the UK. But this probably wouldn't make much difference because the UK government could simply finance whatever shortfall from the money it would normally have paid.

What else could they do. Impose trade sanctions or tariffs? Well they could try. I think there would be a certain amount of blowback from EU manufacturers and traders. They'd also lose in any WTO hearing and the borders would be so porous that I doubt it would be enforceable anyway. Throw the UK out of certain development partnerships. Again more likely to hurt the EU than the UK who would simply concentrate on the US market. Close EU skies to lowcost UK based airlines. Watch the hoteliers, estate agents etc etc around the med howl in protest and watch the UK drunks fly to Croatia and Turkey. Remove the automatic right to residency for UK citizens in the rest of the EU. Watch the property market around the med collapse like a stone. etc. They might try and steer trade to the PAris and Frankfurt exchanges instead of London. All this would do would add to the costs because traders woudl take what they got at the Paris and Frankfurt exchanges and tradethem in London (and vice versa). Etc.

Similar arguments, it seems to me, would apply to countries such as the Netherlands, Denmark or Flanders if it were to split from the rest of Belgium. And of course if one country stops paying and gets away with it then others might too. We can always hope....