February 08, 2013

Farm subsidies — the downside of the EU, or part of it

I have regularly praised the EU for being better than the US at consumer oriented regulations, better privacy rights and more stringent support of them etc. But its bloated farm subsidies, far beyond the US, will someday be its death, or part of the road toward disintegration.

To me, that fact, more than the Union actually agreeing to trim its budget, is the major takeaway from EU budget talks.

Yeah, they trimmed the subsidies ... a tad.
Britain, Sweden and the Netherlands were among the Northern European nations that fought hard to reduce agricultural subsidies and increase spending on research and development to bolster the bloc’s global competitiveness. 

Despite those efforts, farm spending remained the largest single portion of the budget, accounting for about 38 percent of the total — although that was down from about 42 percent in the previous seven-year budget period.
I certainly don't blame Latvia and other newer members for bitching about two-tier subsidies, and, if British Prime Minister Cameron wants to sell a la carte membership, that's his starting point.

On the other hand, nationalism of that type is part of what led to two-tiered subsidies and much more.
“The budget negotiations are the most visible sign of member states winning and losing from the European Union,” said Hugo Brady, a senior research fellow at the Center for European Reform, a research organization. “The result is a totally parochial budget that is poorly adapted to rapidly changing times.” 
Farm subsidies are just the most visible example of it.

I give the EU in its current incarnation until the end of the decade to move toward more integration or fall apart. In Germany, Angela Merkel will eventually face a revolt from within the right wing of the Christian Democrats, the Free Democrats will re-invent themselves, a new non-Nazi far right party will pop up or all of the above.

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