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An EU bill bomb – but no one thought to tell the prime minister An EU bill bomb – but no one thought to tell the prime minister
(35 minutes later)
Seldom in the recent annals of the EU has a routine eurocratic exercise in number-crunching exploded with such political impact into the middle of a summit of Europe’s leaders.Seldom in the recent annals of the EU has a routine eurocratic exercise in number-crunching exploded with such political impact into the middle of a summit of Europe’s leaders.
On Thursday as David Cameron, Angela Merkel, François Hollande et al sat down to supper in the ghastly Justus Lipsius building that hosts Brussels summits, their minds were on greenhouse gases – and how to fight their national corners while delivering a world-beating position on climate change tied to targets for the year 2030.On Thursday as David Cameron, Angela Merkel, François Hollande et al sat down to supper in the ghastly Justus Lipsius building that hosts Brussels summits, their minds were on greenhouse gases – and how to fight their national corners while delivering a world-beating position on climate change tied to targets for the year 2030.
But as they argued over renewable energy quotas, carbon trading vouchers, and electricity interconnectors, Alex Barker, a Brussels-based Financial Times reporter, ruined Cameron’s meal.But as they argued over renewable energy quotas, carbon trading vouchers, and electricity interconnectors, Alex Barker, a Brussels-based Financial Times reporter, ruined Cameron’s meal.
Across the street from the summit venue in the Berlaymont headquarters of the European commission, officials from DG-Budg, the eurocrats who study VAT receipts figures and gross national income statistics from the 28 member states, had done the maths and decided the British government owed the EU budget a whopping extra €2.125bn. To be paid preferably within five weeks.Across the street from the summit venue in the Berlaymont headquarters of the European commission, officials from DG-Budg, the eurocrats who study VAT receipts figures and gross national income statistics from the 28 member states, had done the maths and decided the British government owed the EU budget a whopping extra €2.125bn. To be paid preferably within five weeks.
The three-page document that provided the basis for the FT report appeared to represent a recalibration of economic data between 1995 and 2013. But no one knew why those dates had been chosen, never mind why it should have been released now.The three-page document that provided the basis for the FT report appeared to represent a recalibration of economic data between 1995 and 2013. But no one knew why those dates had been chosen, never mind why it should have been released now.
Asked by the Guardian “why 1995?”, the commission’s budget spokesman said he had no idea.Asked by the Guardian “why 1995?”, the commission’s budget spokesman said he had no idea.
He later said the key date was 1993 but then admitted that he did not know why that was so either.He later said the key date was 1993 but then admitted that he did not know why that was so either.
Or was it 2010 when EU governments agreed a new accounting system for calculating budget contributions? Or perhaps 2007? Maybe 2002 or 2012? In any event the new regime, incorporating data from the shady drugs trade and sex industry sectors, was not supposed to kick in until 2016 although such data was already being used in Britain from 1 September this year. The incoherence was absolute.Or was it 2010 when EU governments agreed a new accounting system for calculating budget contributions? Or perhaps 2007? Maybe 2002 or 2012? In any event the new regime, incorporating data from the shady drugs trade and sex industry sectors, was not supposed to kick in until 2016 although such data was already being used in Britain from 1 September this year. The incoherence was absolute.
Then, the sense of confusion, ignorance, miscommunication, and ineptitude on all sides multiplied over the next 24 hours, resulting in a thick impenetrable euro-fog of technocratic data swirling around the heads of an angry Cameron, his baffled entourage, and sheepish commission officials.Then, the sense of confusion, ignorance, miscommunication, and ineptitude on all sides multiplied over the next 24 hours, resulting in a thick impenetrable euro-fog of technocratic data swirling around the heads of an angry Cameron, his baffled entourage, and sheepish commission officials.
Perhaps the eurocrats had strayed unwittingly into a political minefield. Or maybe the current European commission, with literally a week left in office, was making its exit in style, deliberately detonating a device under what many of them view as the EU’s spoiler-in-chief, Downing Street. There were plenty of questions in Brussels on Friday. And no convincing answers.Perhaps the eurocrats had strayed unwittingly into a political minefield. Or maybe the current European commission, with literally a week left in office, was making its exit in style, deliberately detonating a device under what many of them view as the EU’s spoiler-in-chief, Downing Street. There were plenty of questions in Brussels on Friday. And no convincing answers.
The €2.1bn euro invoice sent to the UK Treasury, in any case, could not have come at a worse time for Cameron, adding fuel to the Ukip bonfire and confirming the darkest conspiracy theories of the Conservative europhobes hammering on the prime ministerial door.The €2.1bn euro invoice sent to the UK Treasury, in any case, could not have come at a worse time for Cameron, adding fuel to the Ukip bonfire and confirming the darkest conspiracy theories of the Conservative europhobes hammering on the prime ministerial door.
But the British as well as all other EU governments are fully aware of and completely responsible for the arcane methodology that is the basis for calculating how taxpayers fund the European Union. The Treasury and the UK mission in Brussels are deeply involved in the decision-taking. Some of them, at least, must have been aware of the bomb being primed in DG-Budg.But the British as well as all other EU governments are fully aware of and completely responsible for the arcane methodology that is the basis for calculating how taxpayers fund the European Union. The Treasury and the UK mission in Brussels are deeply involved in the decision-taking. Some of them, at least, must have been aware of the bomb being primed in DG-Budg.
Under a scheme agreed not by the European commission but by the national governments in 2003, EU capitals are obliged to supply to Brussels dense sets of statistics on the gross national income every September in order to recalibrate and adjust the routine working of the EU budget system.Under a scheme agreed not by the European commission but by the national governments in 2003, EU capitals are obliged to supply to Brussels dense sets of statistics on the gross national income every September in order to recalibrate and adjust the routine working of the EU budget system.
Eurostat, the EU statistics agency, crunches the numbers and then passes them to the national governments in the form of the GNI committee in Brussels. The committee has to endorse the analysis before the results are passed to the commission’s budget directorate.Eurostat, the EU statistics agency, crunches the numbers and then passes them to the national governments in the form of the GNI committee in Brussels. The committee has to endorse the analysis before the results are passed to the commission’s budget directorate.
This happened in September although the GNI committee is to meet again next week. British civil servants were fully aware of the workings and of the likely conclusions for Britain since the rationale for the top-up payments request is the improving dynamism and recovery of the UK economy relative to the rest of mainly stagnant Europe.This happened in September although the GNI committee is to meet again next week. British civil servants were fully aware of the workings and of the likely conclusions for Britain since the rationale for the top-up payments request is the improving dynamism and recovery of the UK economy relative to the rest of mainly stagnant Europe.
The dynamite document is entitled “Information Note for Member States on VAT and GNI Balances”.The dynamite document is entitled “Information Note for Member States on VAT and GNI Balances”.
It is a curious basis for a hefty bill since it admits the data represents a “provisional estimate.”It is a curious basis for a hefty bill since it admits the data represents a “provisional estimate.”
Laconically, the document notes “the commission services are aware that in some cases this might have a significant budgetary impact in terms of cash-flow.” The impact was, of course, more than budgetary.Laconically, the document notes “the commission services are aware that in some cases this might have a significant budgetary impact in terms of cash-flow.” The impact was, of course, more than budgetary.
The penultimate line of the three-page document, which ironically identifies budget revenue reduced by €42m overall this year, stipulated that the UK owed €2.125bn. No one, it seems, told the prime minister. The penultimate line of the three-page document, which ironically identifies budget revenue reduced by €420m overall this year, stipulated that the UK owed €2.125bn. No one, it seems, told the prime minister.