EU spending cuts
European Union leaders have at the second attempt agreed a budget programme (2014 -2020) which for the first time involves a real cut in spending. As European Council president Herman van Rompuy conceded, it was “nobody’s perfect budget”. However, given the economic difficulties facing member states, their leaders were never likely to support higher spending in Europe while imposing tough austerity measures at home. It now falls to Ireland, as president of the European Council, to win the European Parliament’s support for the €960 billion budget. That will involve Ministers in months of negotiations with the parliament. It will also be a major test of their political skills, one by which the success of the Irish presidency may be judged.
British prime minister David Cameron has hailed the outcome a victory for his tough negotiating tactics. He aimed to achieve “at worst a freeze, at best a cut” in EU spending. He has exceeded his expectations, and indeed surpassed those of his parliamentary critics. Last October, 80 Conservative MPs broke ranks to back the Labour Party and vote in favour of EU spending cuts, inflicting an embarrassing defeat on Mr Cameron’s government. His Brussels success has convinced him tough talking pays dividends.
For Ireland, the benefits of last week’s agreement are clear. Ireland remains a net beneficiary of the EU budget; it receives more in benefits than it pays in contributions. In 2011, Ireland’s net receipts since membership in 1973 amounted to €42 billion. A welcome initiative by EU leaders is a €6 billion plan for youth employment, when one in four young people in member states is jobless. Ireland, with a high youth unemployment rate (17.5 per cent) can expect to benefit. As Minister for Social Protection Joan Burton has noted, this marks a welcome change by the EU, indicating its willingness to address not just financial issues but those of social concern – of which unemployment is the most urgent.