•This blog piece will be slightly longer than usual because over the last couple of days in Strasbourg the European Parliament has been debating and voting in favour of two hugely significant proposals that fundamentally alter how the EU raises money.
I’m talking about the eurozone ‘two pack’ – proposals designed to deal with constant surveillance and assessment at EU level of member state budgets, and ‘own resources’, shorthand for tax raising powers, including the controversial Financial Transaction Tax.
First let’s deal with the ‘two pack’: These proposals are a classic case of “too little and too late” and miss some fundamental points.
Greece is under the water and Ireland and Portugal are barely treading water. Now Spain – a far larger economy – is having to bail out its own banks to the tune of 100 billion Euro.
I asked the question that should have been put at the outset of this crisis – Why should private debt be turned into public debt? And while we are it, why should taxpayers always be the ones to foot the bill?
Whether the money comes from the EU or from national treasuries the story remains the same: the people who are now suffering from severe belt tightening will be the ones who end up paying for the wrong decisions made by private companies.
I cannot understand how the European Parliament can underwrite such huge cheques without demanding a serious investigation into the banks in Spain, notably Bankia, to at least try and understand how a hole of 20 billion can suddenly emerge.
To my mind bailing out such banks without investigating how and where the money has gone is an act of irresponsibility and contempt towards europe’s citizens.
We need to call time on this approach. This latest bailout coupled with these proposals is further testament that victory for pro-Euro vanity over common sense economics is still very much in the ascendancy at the heart of European politics.
You can catch my comments in the plenary session on the outrage of unchecked bank bailouts here:
Moving to ‘own resources’, I pointed out to the President in the European Parliament the astronomical amount of taxpayers’ money that has been given to Greece, Ireland, Portugal and Spain by the EU over the last 10 years, with little to no effect as the financial crisis has proven.
285 Billion is more than a headline figure, its a huge amount of money that most of us can barely picture. So just like the Bankia black hole, the question has to be asked what happened to this money?
The sad reality is that the failure by the EU in keeping tabs on funding means that nobody can know for sure. And now the Commission and European Parliament want more money to waste on promoting deeper European Integration.
The Lisbon agenda was a disaster. Remember this was the plan to make Europe the most dynamic knowledge based economy in the world by 2010!
Well, having failed to learn from its mistake, the EU wants to pour Billions more into the new ’2020′ plan. Own resources also means that this money will be even more unaccountable as it is raised directly without negotiation or scrutiny from the member states. The sweetener for member states is a promise of a reduction in their direct contributions to the EU Budget. The UK, because it refused to sign up to these arrangements won’t get any reduction.
This Strasbourg session will be noted as the one that saw MEPs voting for a continuation of the last 10 wasteful years. I shudder at the thought of this.
You can watch my plenary speech on the 285 Billion here, also it is worth noting the intervention from a somewhat confused Portuguese MEP who mistook bail-out money for EU budget money!