Notes on the EU Budget

The European Union budget discussion underway today is of no less importance than was the Treaty of Versailles back in 1919. Then as now, Europe was economically broken and lacking unity amid a cacophony of competing demands that ended with the pie shrinking for all.

The Treaty set Europe’s (catastrophic) economic and political course for the ensuing 20 years. Likewise, today’s debate will determine the chances of the European Union coping with the fall out of what has the potential to be an even worse economic period, if badly handled.

The Treaty caused turmoil by requiring Germany to go through a completely impossible economic trial. Likewise, increasing spending at the “federal” level today is a completely unrealistic challenge for the continent that is home to the world’s highest national tax rates, already going through a painful, forced downward spending adjustment.

The EU is a vitally important project, but it was designed to bring unity and common purpose, healing the scars of war and conflict. It has grown beyond that, and it seemed laudable to pursue convergence through inter-European structural funding as waves of less developed entrants joined the core. But, the sad and unavoidable conclusion of the financial crisis is that structural funds haven’t solved the problems they targeted. In the meanwhile, the net contributors have entered difficulties of their own.

To stand strong through this period of difficulty, Europe needs to remain cohesive and united. But, it is time for countries to assume responsibility for their own economic conditions. Increasing the union budget at a time when nations can’t finance themselves is absurd. Building a union on debt likewise.