EU Referendum

EU budget: a done deal


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We warned last week that it was on its way. And now it is here (see page 9). The finance ministers of the EU member states, including Mr George Osborne, have agreed to provide an additional €7.3 billion for the 2013 budget, as the first tranche of an overall figure that will eventually reach €11.2 billion.

The "amending budget no.2" will add about £800 million to Britain's EU bill, with potentially another £400 million to find when the complete deal is reached. That will come with the second tranche, expected to be agreed after the summer break, bringing the additional British liability to £1.2 billion.

The sum so far agreed represents rise of 5.5 percent on the original budget of €133 billion agreed for this year, itself and increase on the previous year's budget (2012) of €129.1. With the budget now standing at €140.3 billion, that represents an 8.7 percent year-on-year increase, kicking into touch any idea of EU budgetary restraint.

Needless to say, Mr Osborne has been very quiet about this, and the UK media has been playing it relatively low key, making light of the British humiliation. Only the BBC hints at the scale of the defeat, citing a British government source who said the government could not support the amending budget. But, with the vote taken by QMV, there was nothing a powerless Mr Osborne could do.

Ironically, this came on exactly the same day that the Conservative Party published its draft Bill for an EU referendum. The Party could well have pointed out that we were having to find another £1.2 billion to feed the ravening maw of Brussels, making it another good reason why we should be planning our exit.

And still there is the battle of the multi-annual budget to come. Then there will be many more amending budgets to come, as the "colleagues" attempt to chip away at the hidden deficit which technically makes the EU insolvent.

Unsurprisingly, we saw yesterday Kenneth Clarke claim that us leaving the EU could "spell catastrophe for the economy". What Clarke didn't specify, of course, was that the real catastrophe would be to the EU Commission's economy. They desperately need our money – and much more of it. We have not heard the last of this.