EU budget: a victory for engagement

http://www.guardian.co.uk/commentisfree/2013/feb/08/eu-victory-engagement-cameron-editorial

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Seen from Britain, two days of bargaining in Brussels on the European Union budget have produced two winners, one score-draw and one loser. The winners are British engagement in Europe and David Cameron, both significantly strengthened by the summit. The score-draw is the effectiveness and coherence of the European Union as the eurozone crisis plays out, where budget reform opportunities have been missed. The loser is the Conservative party.

Let us start with the EU itself, because it is the big picture, and is liable to be overlooked in the domestic self-absorption of most UK accounts. Compared with the spending of its member states, the EU budget is relatively small. Even the sum of €908bn over seven years that was agreed in Brussels only equates to around 2% of total public spending in the EU as a whole and less than 1% of the EU economy. It is therefore misleading to pretend that EU spending can, by itself, drive growth in the EU to the extent that co-ordinated strategies by the member states could do. It follows that claims that the deal has been either a triumph for austerity economics or a disaster for a growth strategy should not be exaggerated. In this context the European parliament should keep its frustrations in proportion and not use its annoyance as an excuse to flex its muscles.

Yet the EU budget matters very much at the margins. It makes a big difference in sectors like research, education and, most infamously, agriculture. It also makes a big difference when its funds, mainly paid in by the rich countries, including the UK, are transferred to support the poorer ones. EU administrative costs matter too, though they are a tiny part of the whole, because this is public money and should not be squandered in ways that play badly with public opinion, especially in hard times. By these tests, the Brussels deal is very disappointing. A bit more funding for research is more than counterbalanced by another failure to tackle agricultural subsidies. The EU is better off for making a budget agreement, but worse off for the failure to reform it in a modern way.

For Britain, the past 48 hours are very significant indeed. Britain played a leading role in restraining the EU budget, pulling it back from where the commission and the net recipient nations originally wanted it to be. But Britain did not do this alone. It did it by making alliances and by negotiating with other member states. In other words, it did what an engaged member state of the EU ought to do. We do not agree with everything Mr Cameron did. But the wider lesson is momentous in the context of current UK politics. We are better off in Europe, playing our role, than by walking away. Domestically, that is the great lesson of this summit.

Mr Cameron deserves credit for this. Some of his budget objectives – reform of the common agricultural policy, tighter control over costs, support for research – are rightly shared in other parties. Others – scepticism about growth or aid initiatives, refusal to discuss the UK rebate or boost structural funds – are more dubious. Mr Cameron has been true to the better parts of his Europe speech last month. He engaged. He was a partner. He therefore got a deal. But he needs to remember that Europe is give as well as take. Germany, which was a crucial ally this week, is owed one by Britain.

Everything that happened in Brussels is proof of the bankruptcy of the anti-Europe obsession of the Tory party. The irresponsibility of the anti-Europeans has never been more obvious. Tory MPs will cheer Mr Cameron when he reports to the Commons on Monday, but they cannot hide the fact that lots of them want no EU budget rather than a sensible one. They and Mr Cameron are pulling in different directions. They have set the Tory party on a one-way ride to Little England irrelevance. He is pursuing a policy of pragmatic engagement in Europe. It is an unstable cocktail and the public will be right to mistrust them for it.