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IT WAS REVEALED during the week that Ireland, which you may recall is currently in a bailout programme, is to contribute an additional €90 million to the European Union to help plug a shortfall in its 2013 budget. The €7.2 billion deal for the year doesn’t even cover the whole overrun, which is €11.2 billion in all at a time when the EU is standing on member states’ heads to reduce their deficits.
It’s rather ludicrous to consider that we will in effect be borrowing €90 million from the troika, two thirds of which is branches of the EU, to give back to Europe. Yet in the grand scheme of the funny money parade that is the EU it’s hardly a blip on the radar of incongruity.
The deal to cover the shortfall comes in parallel to the negotiations on the near trillion euro budget for the union over the next seven years. The Eurocrats had originally been looking for an increase on the previous budget period, as they always have; but thanks to determined argument from countries like the UK there will be a modest reduction in spending for the first time ever.
That it took having an argument to get a budget that reflects even modestly the scale of belt tightening going on across Europe speaks to the disconnect in Eurocratic society to the rest of us. When one is living on an average wage of €78,500 and paying only 16 per cent income tax on it, sending children to private schools for free and retiring with a pension of 70 per cent of final salary it can be a little difficult to empathise with the woes of ordinary folks.
Austerity is a foreign concept in Brussels, where they’re throwing up a €315 million redevelopment of the Résidence Palace to house the President of the Council; and the Parliament opened a €21 million visitors’ centre to glorify itself late last year. That is to say nothing of the estimated €200 million it costs annually to shift the European Parliament from Brussels to Strasbourg six times a year for a mere two day sitting each time.
The EU budget didn’t concern us very much in the past. For one, we were a major beneficiary of European funds for most of our time in the union and even today we do well in certain sectors. If a politician fixed the road for you at any time since 1973, there’s a decent chance the EU played a role. For seconds, when times were good during the latter boom years nobody noticed much profligacy at home, let alone off in Eurocratic la-la land.
Things have changed, however. We are living in austere times when governments all across Europe have to change the way they do business.
You may recall scoffing at tales from Greece, where everyone it seems has a job in the public sector and another one in the private sector they don’t pay taxes for. A most amusing story did the rounds of a major hospital in Athens that employed over 40 gardeners despite having no garden.
Did you also hear the story about the man who received a grant of €220,000 to build a facility on his farm to process and store fruit, but built himself a house instead? Or the payment to a farmer for his 150 fictitious sheep? Perhaps the €441,000 for a dog fitness and rehabilitation centre that was never built; or the €500,000 paid to two fishermen to scrap their fishing vessel and reduce overfishing, which they used to buy a new boat?
These things didn’t happen in naughty Greece, however. They happened all over Europe, from Italy to Sweden; Ireland to Poland. They happened using European money that is blown to the tune of €5 billion per year in mismanagement, embezzlement or improper use. That’s three times the amount of money that Irish taxpayers contribute to the EU. The Court of Auditors refuses to sign off on European accounts if the mismanagement rate is more than two per cent of the total budget. They haven’t signed off on a budget in eighteen years.
That’s just the money that gets robbed. The EU is pretty good at wasting money in above board fashion, too. Andalucía’s regional government got €7.5 million to spend between 2007 and 2013 on PR that aims to “reinforce the message of the achievements in Andalucía thanks to European funds.” The EU spent €72 million on an anti-smoking “HELP” campaign, which included “a giant inflatable structure which will tour all EU capitals”. In the same year, they spent €293 million to subsidise tobacco farmers.
On projects big and small the Eurocrats know how to blow money in style. It seems that any old silly idea can get funding. €16,000 to Tyolean farmers to “boost their emotional connection with the landscape” or €5,000 on “Eurogaloppo”, a German “Europe-Horse” to teach children about the EU. Presumably they didn’t tell the kinder about a €54,000 grant paid to the Spanish town of Chirivel to fund a riding school. In a manner of speaking, the grant did the job: The site was converted into an establishment called “Seventh Heaven”, a brothel.
The EU can play a positive role, but as a giant self-managing bureaucracy it is a classic example of “Spend Your Budget Or You’ll Get Less Next Year” public sector writ large. There is nobody interested enough or empowered to go in and deal with the waste and mismanagement that is as bad as anything to be found among the PIIGS nations.
Until that changes the European Union can sod off looking for another €90 million from us. I’d sooner open up a few wards in our hospitals.
Aaron McKenna is a businessman and a columnist for TheJournal.ie. He is also involved in activism in his local area. You can find out more about him at aaronmckenna.com or follow him on Twitter @aaronmckenna. To read more columns by Aaron click here.
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The mismanagement in both Ireland and Euroland stems from a lack of leadership coupled with the gravy train mentality of Eurocrats / Civil Servants. It will all end in tears
There’s a lot to be said with rejoining the UK alliance we were in pre EU days. Effectively we are the same people with similar cultures these days. Heck we even share a border, will be voting for each other in Eurovision tonite and in the case of Ireland looking forward to the return of premier league in August.
No surprise really pen pushers gone mad again. Sure why would they worry its not their money. Agree with Aaron we should tell the EU to go stuff itself on the 90 odd million. But we won’t our lot still dream of getting on the euro gravy train as their reward.
please get facts correct. the highest income tax band is 45%.
the average salary is not 78k.
and the rest is not accurate either. children get a free education of the same level as they would get if they were home.
ireland has done well out of the eu… and you are twisting figures and deliberstely looking for sensational headkines
Pay starts at €2,500 entry level per month rising to €16,000 a month at grade 16.
Income is taxed at 8% to 45%.A 15% allowance us also paid to an employee when locating outside their home country.
Normal retirement age is 63 and pension is 70% of final renumeration.I believe my figures are correct,but open to correction.
LOL are you for real?????
Yourself and your friends are so flipping out of touch its almost comical.
That indignation! It must be so difficult for you all to be so everywhere misunderstood.
He’s not far wrong. I’ve worked in EU organisations and Aaron’s figures are pretty accurate. In fact he omitted to mention the 16% expat allowance paid to a significant number of all staff which effectively cancels out the community income tax (specific to staff of the Coordinated International Organisations) and which was only 10% when I worked there. I know remuneration packages have tightened up since I left but there are still education and dependants’ allowances which go a long way towards covering private school fees, including boarding schools. Most maintenance and security work has been outsourced and a far higher percentage of clerical grades are local hires now so they don’t get expat allowances but the average EXPAT staffer would very likely have a pay and benefits package worth about 70 grand in real terms.
hmmm… then again, dont our top civil servants earn more than these euro-workers?
Eurosceptic bullshit!!!! So much of this is so factually wrong i don’t know where to start!!! Maybe the stupidity of Ireland who have done extremely well from the EU budget for forty years in the first thing to say?! Also there was no extra payments this week but only member states being forced to pay THEIR bills for EU programmes THEY legally signed up to, with the money going back to the regions and not Brussels.
Why doesn’t the author just join UKIP!!
@Aidan OSullivan.when you have finished spluttering in your indignation perhaps you might make a start on correcting the article? In your own time, no pressure.
@Uncle Mort sorry, yes I have calmed now… :)
Firstly, the article uses the classic eurosceptics tactics of pretending unelected people are making these decisions which is not true, and by always focusing on EU civil servants pay&conditions to undermine the whole EU budget, and so undermine the EU.
Dont forget UKIP want the UK to pull out, and due to ignorant media coverage look like getting their way. The other tactic is to pick individual examples of stupid uses of EU funds around Europe, from the 1000s and 1000s of successful programmes. Of course they never mention that the vast majority of EU funds are actually administered by the member states themselves are not the EU direct from Brussels.
The EU totally depends on the member states for a simple reason because it has a tiny civil service (less people than Paris city countil), which even though we give it more and more power via Lisbon Treaty and more member states like Croatia etc, the EU budget is still tiny. Only 1% of EU GDP!!! That compared to the US federal budget which is over 20% of US GDP.
I will add the studidity of EU member states cutting back their budgets all at the same time (at the insistence of the Germans and Commission etc), and then also UK and others insisting EU budget cuts which means even less economic stimulus in regions like Ireland, Spain, Greece etc which need it most.
Of course, nothing wrong with discussing and reforming EU civil servants pay&conditions, and that is happening at moment. But remember, only 16% of EU budget goes on administration (which is very low by international standards), and the vast majority of that goes on translation/interpretation services because states like Ireland insist on 23 languages. However given the context, the EU would be smart to accept reforms and cuts in this area.
By the way, all international organisations like UN, OECD, WHO have same conditions for their civil servants who leave their home state, speak multiple languages, need international schools for their kids and also dont for good reason pay the local income taxes in whatever country the EU insitutions or agency is based. There are good reasons for special arrangemnts, but I agree there should be reforms & cuts here.
So lets take the main point of the article, the so-called extra 11bn to be paid for this years 2013 budget. The author picks up the story from TheJournal which like other media outlets mis-reports the story. This is because most national media outlets get their stories from the national govts and not from the EU Commission or EU parliament. At the moment the Council via the member states is in talks with the Parliament on the EU budget and so this spinning suits the member states.
The 11bn is commitments already legally due by the member states to the EU budget for regional funding programmes, Erasmus, environmental programmes, SMEs funding etc etc. Its not a shortfall or hole in the budget, its legal commitments. For example, the member states legally commit to funding Erasmus for students and based on estimates of the number of students will commit x million. But during the year more students apply than expected for example and so more funds are legally due to pay for them, otherwise 1000s of students would be refused Erasmus at the last minute.
As a pre condition to start the next 7-year budget with the govts, the directly elected European Parliament demanded that this 11bn be paid up by the govts, as the MEPs know that the govts are great at promising their voters lots of nice programmes and regional funding etc but then dont want to pay the bills when they come in at the end of year.
So this is not new money and not a shortall but just the bills which need to be legally paid to keep very popular EU programmes all over Europe running.
Lets take other parts in the article:
- its not Eurocrats looking for anything or deciding anything, its the direcly elected European Parliament and the Commission which is accountable to the parilament, and the Commissioners who are democratically nominated by govts and ratified by the EU parliament. Just like John Kerry is the new US Secretary of State, nominiated and ratified and accountable to the Congrees.
- however the euro crisis is not being handled in normal EU way, but by the govts, and esp. the AAA govts. The troika is not the EU, as the EU is made up of 4 main institutions…the commission, council (govts), ECB and the parliament which has been kept out of the trioka setup and so the troika setup is totally undemocratic. But this is separate from the EU budget issue. If people are not happy with Merkel/Dragi running Europe, then they should agree that the EU parliament needs more power.
The new building (badly needed) for the European Council summits was decided by the prime ministers so blame them. The new Parliament visitors center was also badly need as theres 1000s of tourists visiting Brussels and there was nothing for them to learn about their parliament. The EU is always accused of being remote, so why cant the parliament have a visitors center? It also was about 10 times cheaper than the cost of the US Congress visitors center, and the EU has far more citizens. The mutliple locations of the parliament with monthly trips to Strasbourg is because of the insistence of the French governmnt and not the parliament itself. It will have to change as its stupid, but the EU needs to give the French something in its place. All member states want a slice of the cake in their country, so the French are no different. In Ireland we even have an EU agency in Meath.
The Court of Auditors wants an error rate in spending of less than 2%!!! Would any national govt ever meet that standard?? Of course the author forgets to say that over 80% of the error cases are the respondsibility of the member states themselves and not the EU commission.
Yes its stupid to subsidise tobacco farmers but its to transistion them out of tobacco. And these decisions are made by democratically elected ministers and MEPs, so vote differently if you want other policies.
The EU is not self-managed, the Commission is democratically accountable to the parliament and national ministers. There is actually far more democracy in Brussels than in the Irish so called parliament but the media ignore this. The Irish parliament is extremely weak, and Irish local govenment is non existent. Unlike the EU budget, the Irish budget is kept secret like a rabbitte to be pulled out of a hat on budget day!
What is wrong is the current crisis management, which is dominiated by Merkel/Dragi and the big member states, and not in a open and democratic way with the parliament. That should change.
Lets have a debate of the EU budget, or the financial crisis, or any other EU issue…but the most important thing to remember is all these decisions are been taken by democratically elected prime minister, ministers and/or MEPs. If you want change, then vote for it.
Simplistic tabloid style coverage of the EU is mostly aimed at undermining the whole project, which is exactly what UKIP want.
Ireland has done extremely well from the EU budget for 40 years, with Irish farmers still getting 1bn per year, infrastructure funding, research funding, Erasmus programmes etc. The current EU national leaders are making a hash of handling the crisis, that is what has to change. Reforming the EU by giving more power to the democratically elected parliament, who are accountable at elections like a normal democracy is the way forward.
Then people can really vote for whatever type of EU they wish. Thankfully next year there will be multiple candidates for Commission President with hopefully a real campaign, backed by competiting manifestos etc, media campaigns etc and a debate about future of the EU.
I prefer Aaron’s account rather than your Common Purpose version, sorry
O’Sullivan makes a lot of reasoned points there…but mckenna wins the populist vote…
The UK will pull out and topple this EUSSR unless the collapse of Spain brings about that happy day first.
Well said mr mackenna
i enjoyed that article…genuinely hope those anecdotes/examples are genuine cause ill be quoting them….
McKenna has this EU budget issue totally out of proportion to what are the real problems in the Eurozone.
For one, the sums are relatively peanuts. For two, Ireland has benefited massively from EU funds & still does.
But the biggest issue is that EU budget ‘waste’ is microscopically tiny compared to the real waste in the EU, particularly the Eurozone.
I’m talking now about the loss in output, real goods and services that comprise our standard of living, that arises from 12% unemployment across the Eurozone.
This arguably (cf Andrew Haldane, formerly BoE economist) translates to +at least+ 10% of our net income thrown away every year. In the Eurozone this loss is €900 billion. McKenna is belly aching about €90 million. What a pathetic idiot.
What’s more, the vested interests & useful idiots running the Euro mess have no plan whatever to reduce this loss much over the next 5 to 10 years.
Yet there is absolutely no need to have such high unemployment & waste of resources. Following the lessons learnt from Keynes after the mistakes made prolonging the 1930s depression, policies achieving near full employment served us extremely well in Europe & the US in the 3 or four decades after WWII.
With modern computer & network technology we have infinitely better tools now to manage the monetary system and macro economy for the benefit of all.
MMT economics (from the Post Keynesian school) demonstrates how to properly use the monetary system we already have for public purpose. Ask yourself this question – Where does money come from? it’s likely not remotely what you think or are led to believe. Then go find out – MMT will tell you.
The Neo-liberal mainstream capture of the last 2 or 3 decades has produced the failure it inevitably would, except of course for the wealth of the top few percent elites.
€90m may be less that €900m, but that doesn’t invalidate McKenna’s point about bureaucracy and wastage in the EU behemoth. And it’s probably a bit of a leap to suggest that your comparison makes him a “pathetic idiot”
Perhaps you should consider lightening up, perhaps getting laid?
You’ll feel better, honest.
Jim
I said €900 +billion+ not ‘million’. The difference is not 10x but 10,000 x.
Tell me, when the river has burst its banks & is rushing in thru’ the doors, you & McKenna want us all to look at the dripping from the leaky roof tile?
No, I think ‘pathetic idiot’ fits.
Business people like McKenna have shown that they should not be let anywhere near macro economics. They either haven’t a clue what distinguishes ‘macro’ from a business or household, or are just looking after their own narrow interests. or both.
The reason the majority are suffering ‘austerity’ is because the authorities have refused to even consider the policies that could easily have greatly reduced unemployment following the economic shocks of 2008. Because we share a (flawed) common currency, such measures need to be adopted at the Euro level, but there is no excuse for not demanding these policies be considered.
McKenna has continuously peddled his tired ‘let’s cut public spending’ record, which if it were to have any effect at all, would more likely serve to make the macro situation worse. So obsessed is he with this that he never actually says anything about what he might do with any monies saved. I think we can take it from this omission that a) he would probably just pay down public debt, and b) he has no clue how to run a (macro) economy. (Taking more money out of the economy will only mean more unemployment, less prosperity & less ability to service debt. Exactly the direction the Euro zone is going, & for exactly these reasons.)
There is of course always a worthwhile discussion to be had about the extent of public service provision & what value we get.
But peddling this line in the worst recession since the 1930s is about as stupid, in macro economics terms (did I mention the macro economy is not like a household?) as rearranging the deckchairs while the ship is sinking.
Never heard of looking after the pennies, and pounds look after themselves? No? That’s the root of the problem, right there.
Down with the union!!!
As pee wee flynn would say it’s hard to run 2 households.
€uronomics.
It has nothing do with Europe, the €, or Economics.
One look at your website tells me as much as I need to know about you and your comentry Aaron… Biased and slanted… I will ignore all future posts that you write… It cant even be classed as well written fiction..
Good day Sir..
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