Why the Latest EU Bill Could Prove Costly

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In case anyone missed the news, Britain has been handed a bill for £1.7 billion from the European Union. Why? Because of Britain are economic prosperity in the last decade was higher in than forecast. 

David Cameron has said that the UK will not be paying the bill. Although this is not to say that some, if not all, of the bill will be paid at some point. But what does all this mean for British politics?

For Britain this is a crucial time economically. Despite a double-dip recession, wages are not increasing at the same rate as inflation and Bank of England rates remain at an all time low. The country seems to be surviving, and prospering, albeit at a rate of yearly economic growth of around 2%.

Would paying the £1.7 billion bill affect any of that? Well if we are to believe that our economic prosperity is the cause for the bill, then yes it will have an effect on our economy. Although, perhaps not as noticeable as in previous years.  It’s unlikely that this bill would cause many, if any, cuts on public services (other than those already planned) before the general election. Furthermore, it can be expected that the bill would not do serious harm to the economy; it would be detrimental to the EU to post a bill that would do more harm than good.

However, Britain is already one of the EU’s biggest contributors, paying 15 billion Euros in 2013, receiving just 6.5 billion in return. Moreover, other big contributors, France and Germany are due to receive a rebate from the EU, to the tune of £801 million and £614 million respectively.

Britain has to pay millions in fines to the EU on a daily basis, for things such as not allowing prisoners to vote or using different farming pesticides. This is another reason as to why there is outrage surrounding this extra bill. It may be fair to have to pay a fine for breaking the rules, which is no different than a parking fine for example.  As Britain is already among the top five contributors to the EU, and including the fines added on to Britain, the amount that is paid to the EU does seem a rather large amount.

This leaves the question, why does the UK have to pay so much whilst others are refunded so much? Because of the high levels of prostitution and drug use in the UK. Yes really, these are now included  as part of the economic forecast, but were not at the time of the EU’s original forecast.  This may sound strange, particularly considering how Germany has previously bailed out countries, such as Greece (which could perhaps show that Germany deserves some form of rebate). But if Britain were to pay this bill in its entirety, it would show a green light to Brussels that they can give any bill and the country is expected to pay it. Ironically, it is a German MEP, Alexander Graf Lambsdorff that has insisted the UK pay ‘their duties’.

Politically, this is a hot subject, particularly with the general election just around the corner in May. All parties are currently vying for political favour, and with the continued rise of UKIP, who now have two MPs in Douglas Carswell, an issue like this could make or break a party’s election campaign. Nigel Farage has aired his views on this, describing it as ‘pretty outrageous’ and that people will be ‘very very angry’. A situation like this could help build hostility towards the EU, and hence boost UKIP’s favour in the opinion polls and in the election result itself, particularly if David Cameron does pay the full amount to the EU.

In contrast it could have the opposite effect. UKIP are seen by many as a watered down racist party, not helped by acts such as Mike Read’s calypso song. If David Cameron were to take the strong stance he appears to take now, it could prevent voters from abandoning the Conservatives and voting for UKIP, something Cameron is desperate to avoid following the departure of multiple Conservative MPs to UKIP. Additionally, should he stick to this strong statesman figure that he is demonstrating? It will undoubtedly boost opinion polls for the Conservatives as a whole (Cameron regularly appears top of ‘favourite current party leader’ type polls already). What is sure, is that come the time of the Leaders’ Debates in the Spring this particular issue will rise again, regardless of whether the bill is paid or not.

As stated, some MEP’s in Europe expect Britain to pay the bill, but this looks like it might not be a simple case of just paying the bill at any date. The EU are allowing an emergency meeting to discuss how the bill was calculated – more specifically than simply a higher than expected growth in the economy.  Additionally, this meeting will discuss why Britain has to pay the bill at all. This must ask, if this is still up for debate, why issue the bill originally? And indeed, surely this can show that there is the potential for Britain to not pay the bill at all, making a somewhat unnecessary drama.

This controversial issue does not seem to be going any time soon, and the longer this goes on for, the more people will begin to have a view one way or the other. Ultimately, this should not destroy our blossoming economy but its effect will be most clearly seen at the General Election. With the EU already being a determining factor for voters, if David Cameron buckles under EU pressure it could signal the end of this coalition government. However, should Cameron stick to his guns, this could be the determining factor in terms of a full Conservative government come May.

Feature image by Jordan Stewart

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