The UK, Italy and The Netherlands got ‘punished’ by the European Commission for better than expected economic results, through a massive after-tax to the tune of (combinedly) billions of Euros. To the ears of many inhabitants of these countries, this after-tax sounded unfair and perhaps it was?!
The whole soap opera about the unexpectedness of these payments, however, complete with the whining and jawboning by the government leaders, was pathetic and for the domestic political stages alone. Still, it sheds an unfavourable light on the impopularity of European Union payments.
Perhaps it was one of the most embarrasing and pathetic European political events of 2014.
About one week ago, the United Kingdom, Italy and The Netherlands received a massive after-tax bill from the European Commission, with a staggering total of over €3 billion euro‘s, 'for better than earlier forecasted’ economic results. On top of that, a number of other countries – including Greece(!) – received a relatively small after-tax bill for the same economic results.
"Invoice payable before December 1st, 2014! Kind regards, the European Commission".
On the other hand, other countries – like especially France, Denmark and Germany – received (considerable) rebates on their earlier paid EU premiums, to the tune of hundreds of billions of Euro’s, for ‘worse than expected’ economic results.
This is visible in the following two charts; data courtesy of the European Commission:
|Annex 1: VAT - GNP/GNI own resources |
adjustments for years 1995 - 2013
Data courtesy of European Commission
Click to enlarge
|Annex 2: Financial impact of the VAT-|
GNP/GNI adjustments for the memberstates
Data courtesy of European Commission
Click to enlarge
While the rebate receivers silently counted their blessings and disguisedly opened a bottle of real French Champagne, the 'losers' of this verdict (i.e. the economic winners of the pack) screamed, whined and jawboned, like a tourist in the centre of Amsterdam after being robbed by a pickpocket.
According to PM David Cameron, the Italian Prime Minister Matteo Renzi had screamed that this after-tax was ‘not just a number, but a lethal weapon’, while Cameron himself stated, ‘that he would only pay this bill when hell froze over’! Or something like that.
Dutch PM Mark Rutte and chairman of the Euro group, annex Finance Minister Jeroen Dijsselbloem played the murdered innocence and told the media that they didn’t see this one coming, at all. They were shocked…, really, SHOCKED to the bone… by this insult, coming from the European Union!
Britain has been told to pay an extra €2.1bn to the EU budget within weeks because of its relative prosperity, a hefty surcharge that will further add to David Cameron’s domestic woes over Europe.
To compensate for its economy performing better than other EU countries since 1995, the UK will have to make a top-up payment on December 1 representing almost a fifth of the country’s net contribution last year. France, meanwhile, will receive a €1bn rebate, according to Brussels calculations seen by the Financial Times.
The one-off bill will infuriate eurosceptic MPs at an awkward moment for the prime minister, who is wrestling with strong anti-EU currents in British politics that are buffeting his party and prompting a rethink of the UK’s place in Europe.
Mr Cameron is determined to challenge the additional fee and on Thursday night met Mark Rutte, the Netherlands premier, to discuss the issue. His country is also being required to make a top-up payment, although it is smaller than the UK’s at €642m.
George Osborne, chancellor, on Friday denounced the decision as having been made by “junior officials” in the “bowels” of the commission. Interviewed on Sky News, he said that once he had learned of it, Mr Cameron was “immediately” on the phone to other European prime ministers presented with demands who were “similarly surprised”. “It speaks to the wider complaint about Europe,” he said of the process. “It’s relationship with Britain is not right at the moment.”
Mr Rutte said he was considering possible legal action to reverse the ruling.
“This is an unpleasant surprise and raises many questions,” he said. “We will get to the bottom of this and of course will be asking for detailed clarifications from the commission.”
A few days later, the European Commission replied drily, with a sub-zero tone of voice, that the financial data had been sent to the government leaders more than a week earlier and nobody had responded to it, until then.
The European Commission should not be blamed for an after-tax, which has been charged to certain member states. The after-tax has been calculated, based on data coming from the member states themselves. This was stated by European Commissioner Jacek Dominik (Budget Issues), during a special press conference with respect to the after-tax charge. In his opinion, the member states had no other option than to pay their dues.
Commissioner Dominik explained the high after-tax for certain countries by pointing out that some pending questions and disputes had finally been settled, after – sometimes – many years. Such disputes concerned f.i. the settlement upon the question, which financial data exactly belonged to the gross domestic product. ”We don’t want to be accused of abuse, when we simply want to improve the national statistics”.
Dominik told that he was genuinely surprised by the extremely critical response from PM David Cameron to the after-tax. ‘Until now, there was no signal whatsoever from the United Kingdom, that the government had a problem with the after-tax’.
Cameron and Rutte made a big show of it, during the EU summit of last Thursday and Friday, in spite of the fact that they had been informed one week earlier. ‘The member states have all been informed on October 17, in Brussels as well as in the residences of these countries. Everybody knew about it’.
The whole pathetic media show by Renze, Cameron, Rutte and Dijsselbloem was worth four Oscar’s for best leading and supporting performances.
It was all barkin’ and no bitin’ by these four government ‘leaders’ and it was totally meant for domestic purposes, at the political stage and in the local media:
“Look fellows. We battled for you and we did our utmost to prevent our country from having to pay this money, but well uhm… contract is contract, y’know. We can’t help but paying it. Always the same ol’ same ol’ with those darn commissioners in that darn European Union.”
Because that is what will happen eventually, when the gunsmoke has drifted away: these countries will have to pay their dues!
Commissioner Jacek Dominik was totally right, when he countered that the government leaders had been informed in advance, at least one week earlier.
In the meantime since this Volkskrant article, this has already been admitted by Dutch Finance Minister and Chairman of the Euro-group Jeroen Dijsselbloem. Although he did not admit to have known these data himself one week earlier, he stated that his officials had indeed heard these numbers before.
As far as Dutch PM Mark Rutte himself is concerned and especially what and when he knew about this after-tax and the amounts mentioned in it, I happily quote former US minister of Defence, Donald Rumsfeld:”There are known unknowns. That is to say, there are things that we know we don’t know”.
I dare to add to this legendary quote, that I strongly believe that PM Mark Rutte did know these after-tax data in advance, but he didn’t want to spoil his Oscar-worthy performance in the Second Chamber of Dutch Parliament. Can I be wrong? I can be wrong!
What bothers me even more about this pathetic after-tax show of the last two weeks, however, is that all countries are still treating the European Union as a big slot machine: everybody wants to get more money out of it, than they have thrown in.
The events of the last weeks show that the EU countries still keep their mouths shut, when they receive substantial rebates from the EU, but immediately start to whine and jawbone, when they have to pay more money for it; even when this is justified by their own financial/economic data.
This sheds a very stinging light on the impopularity of these very necessary – and probably well-spent – EU payments and especially on the abuse of European politicians, with respect to these payments, when this is in their political interests.
You can’t see the EU and the European Commission as the aforementioned slot machine: the EU does not deserve that. Most things that the EU does are in the interest of all European countries and help to make the European Union as a whole a better and more stable place. Such contributions are a necessary means to let the EU survive as a political and executive apparatus.
Of course, the EU is far from perfect in many aspects, but frankly, I have been more annoyed by local politics and local government in The Netherlands lately than by the European apparatchiks.
And the European Commission does especially not deserve to be treated in the cowardish and offensive way, that it has been by British PM David Cameron of the BUTP (i.e. "the British UKIP and Tory Party") and his peers in Italy and The Netherlands.
These four clowns Cameron, Renzi, Rutte and Dijsselbloem should stop with their cowardish stance in this matter and should quickly develop into real leaders, who take their own country and the whole European Union by the hand.
You must realize, that these are the same leaders who have failed time and time again, in finding a solution for the fierce and enduring economic problems of the European Union.
When the European economy has indeed started to improve more structurally since 2014, this fortunate development cannot be written on the accounts of messrs Cameron, Renzi, Rutte and Dijsselbloem. That is for sure!