A serious week in Europe with budget cuts, progress in Ireland and common sense on fisheries

By Phillip Souta

David Cameron and Angela Merkel worked together to cut the EU's 2014-2020 budget

It was not “standing up to the EU” that delivered the Prime Minister’s objective of a slimmer EU budget, it was pragmatism and alliance building.

We have been calling for radical reform of the EU budget since we were founded in 2006 and last year published a fully costed Alternative EU Budget which would have saved the UK over €10 billion.

David Cameron and Angela Merkel managed to deliver a 3.3 per cent cut in the 2014-2020 budget compared to 2007-2013. We are still spending too much on agriculture and the wasteful practice of recycling cohesion funds from rich members to rich members’ regions still continues. Spending on growth enhancing measures will go up by 37 per cent by €34 billion though. A budget that reflects economic hardships faced by voters across Europe and spends more on growth finally sends the right message.

The PM achieved this through strong arguments and building partnerships with Germany, Denmark, the Netherlands and Sweden. He was particularly succesful in getting the support of Sweden and the Netherlands which in turn made it far more likely that Germany would strongly back northern calls for a slimmer budget.

He ignored the theological Eurosceptics who would start with threatening a veto over demands in the full knowledge they could never be met. The outcome also provides a powerful argument for why the Tories should re-join the mainstream centre-right European People’s Party grouping in the European Parliament given that there is a good chance it may veto the deal in March. Outside it, they have less influence.

It was not just the European Council that made headlines this week. Ireland announced the liquidation of the failed Anglo Irish bank, easing the state’s debt burden and taking it a step closer to emerging from the 2010 bailout program by the end of this year.

Even the European Parliament, unloved even by EU standards, managed to get into the news for the right reasons by voting for an end to Common Fisheries Policy ‘discards’ – the practice of throwing unwanted fish back into the sea. Finally, fisheries quotas will be dictated by evidence of sustainable fish stocks designed to allow them to recover by 2020. The reform was passed by 502 against 127 votes.

Europe woke up to 2013 not with 15 or 16 eurozone members, but the full complement of 17. I won bets made at the height of the crisis with people who just couldn’t see the euro surviving. Now, money is flowing back to the periphery and Spain, Ireland and Portugal are seeing increased exports and competitiveness through albeit painfully lowered labour costs.

Amongst all of this, the importance of being practical and building alliances is a lesson which will not be lost on David Cameron when he tries to persuade our partners to allow some core competences to be repatriated back to Britain. He will be lauded next week by the eurosceptics of his party for bringing back a cut to the EU budget. The uncomfortable truth they have to face is that they would abolish the European budget and walk away from the EU tomorrow if they could, but their leader prefers to be in the thick of it.