Saturday, December 17, 2005

Blair Folds

After promising Brits he'd never give up the "rebate" they get in their financing of the EU, which keeps the Brits as number 2 funder of the EU after Germany, he's folded. Winners are the heavily corrupt EU institutions and states that feed off the Brit payments, Brown, Blair's opponent, and possibly the opposition Tories. Losers are Blair who'll have to resign, Brit taxpayers, and ultimately the EU if the Brits pull out.

This was Blair in June::

Mr Blair has made a cut in farm payments a precondition for any renegotiation of the rebate, which was secured by Mrs Thatcher 21 years ago.

Mr Blair publicly rebuffed Mr Chirac, saying that without the rebate Britain would be paying a "quite unfair -proportion" of the EU's budget.


"Britain has been making a gesture, because over the past 10 years, even with the British rebate, we have been making a contribution into Europe two and half times that of France. Without the rebate, it would have been 15 times as much. That is our gesture," he said at 10 Downing Street.


Here's Blair today:

Tony Blair has sacrificed an extra £2.7 billion to salvage an EU budget deal which he insists is in Britain's interests. The Prime Minister had already surrendered £5.5 billion in rebate cash ahead of a crucial summit in Brussels. During fraught negotiations he offered up a further £1.7 billion from the rebate which was won by Margaret Thatcher in 1984. And increases agreed in the 2007-2013 budget after 17 hours of talks will cost Britain another £1 billion.

"This is an agreement that allows Europe to move forward," the Prime Minister said.

Thats £10.9 billion, and all he got in return is an agreement to a review in 2008 of the French snout in the EU trough, with any changes delayed until 2014.

With the Brit public finances in heavy deficit and growth diving to continental levels, it won't be possible for it to fund this out of borrowing. So taxes will rise.


Blair's replacement, Brown, will use the EU deal as cover for a general tax increase. Then everything depends on the economy. If it quickly recovers, the Brits will probably accept with bad grace their financing of the EU. If it moves into recession, the next government will be Tory and the Brits will head for the EU exit.

I think Blair's deal makes the Brits the biggest paymasters of the EU, and will post the numbers when more details emerge.