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When is a Budget Cut Not?

Posted on the 23 November 2012 by Charlescrawford @charlescrawford

My latest piece over at Telegraph Blogs looks at how far if at all we can fathom out whether any given EU Budget outcome represents a 'cut', and if so a cut of precisely what:

The key thing to look for this time is (a) the baseline used for any percentage increase (or not) in the budget framework ceiling, and (b) the likelihood of the EU spending anything close to that ceiling. Is the EU using the previous 2007-2013 budget ceiling as the baseline for this framework period’s budget calculations? Or the likely 2007-2013 actual spend as the baseline? Or something else. These numbers can be very different, so working out what they are likely to mean in both presentational terms now and then in substantive terms up until 2020 is genuinely tricky.

One other gloss. It’s possible for the EU Budget to be frozen and the likely overall UK net contribution to stay the same, but the UK rebate is cut as part of the deal. We lose some money there, but get it back elsewhere. How damaging that is to the rebate thereafter depends on precisely what has been agreed as the basis for cutting it now.

All of which said, if David Cameron can pull off something like the 2007-2013 budget ceiling rolled over to serve for 2014-2020 without the silly increase proposed by the commission and European Parliament, he will have done well by any standard of measuring these things. It will be the first time ever that the EU budget’s real growth has slowed right down to almost nothing.

And with that new discipline in place, over the period as a whole up to 2020 the actual spend may turn out to be lower than took place in 2007-2013 – a remarkable change of course.

A funny story, as told to me by a senior French diplomat who was part of the French team at the time. Back in the early 1990s the budget was again up for discussion. As the discussions dragged on, the French delegation were in awe of the perfidious Brits who turned up with, gasp, small computers to run the permutations. The French had only a pocket calculator that ran out of battery – and it was no one’s responsibility to run out to buy new batteries.

Never underestimate the role of operational technique in these matters.

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