Monday, October 21, 2013

EU "Shutdown"

Now that the US shutdown is over, it seems to be time to create our own little budget crisis in Europe. The EU Commission, the European Parliament, and the Council of the European Union (member states) agreed on a budget for 2013 in 2012 under the assumption that all payments due for 2012 would be paid 2012, which just did not happen. Additionally, the member states decided to start reducing the budget, which lead to a budget which was €2.9 billion below the 2012 one. So the 2013 budget needed amending, and since currently everybody in Europe is a big fan of paying in tranches, it was decided to use several installments for the needed sum of €14 billion. Everything went fine with the first and largest one, but now we seem to have a problem.

The second tranche amounting to €3.9 billion is still being negotiated, because the EU parliament wants to add €400 million needed for flood relief in Germany to this payment while the Council (member states) want it to be part of the total. Barroso called for the third installment to be paid earlier, and the budget committee will meet tomorrow to discuss this issue, since according to calculations done by the Commission the EU will otherwise start to miss payments by mid November.

Also, it turns out that in Europe we have our own version of the tea party. Spiegel offered the expertise of two members of the European Parliament. The Austrian Martin Ehrenhauser was surprised, and asked(my translation):

How can it be that the EU Commission finds out over the weekend that it will be broke shortly?[..] Here something is being rushed through, without us being able to control the items exactly.

So not being able to access 3.9 billion should not make a difference or something? On the speed and controlling issue, well, that would probably make sense if the original draft weren't from 27th of March. That should have been enough time for anybody to check all the items. Also, the flooding happened in July.

German CDU expert Ingeborg Gräßle offered the advice that instead "of going broke" the EU Commission could start missing payments for structure funds. I actually like the idea. Just instead of funds for farmers, or PHD students, or bridges, the Commission should pay some members of the EU Parliament later.

If it were a movie it would argue that it is a bad second part to the great US shutdown drama. None of the characters are likable, their one-liners are neither funny nor thoughtful, and instead of the whole world being in danger of falling into recession, the worst case scenario here is that the EU is making a fool of itself ... again.

No comments:

Post a Comment