October 04, 2008

Brown wants more EU corporate welfare

So Gordon Brown wants the EU to set up a fund to bail companies out during the current financial difficulties. Will it happen? Probably, handing out other people's money as corporate welfare is one of the EU's primary functions. The EU is a customs union, it is inherently protectionist. The EU's basic foundations have been laid on the idea of forcing the people in the countries that belong to it to pay more so that favoured industries can be handed an invisible regulatory subsidy. On top of these corporatist foundations comes more structures for corporate welfare have been built.

The programme that the EU spends the most money on, the CAP, is nothing but corporate welfare handing out vast amounts of money based on whom has the most assets, in the form of land, to begin with. The current biggest recipients in the UK are Nestle, the Duke of Westminster, and the Queen, hardly people on the poverty line.

The second largest item on the (un-signed off) accounts is the CFP, a mixture of corporate welfare and the mismanagement of an important natural reserve. The amount spent on modernisation and renewal of the fishing fleets is greater than than the amount spent on decommissioning or reallocation of the vessel to waters outside the EU. Every country in the EU except Greece, Italy, Holland, the UK and landlocked Austria receives more money for modernisation than it does for adjustment of fishing efforts. Of these the country with the worst ratio of money for modernisation compared to adjustment of fishing effort is the UK.

This brings us to another of the major results of EU programmes to date. Screwing over the UK.

The UK joined partly in the desperate hope that by joining the other countries in the EU would help to pull us out of our post war decline. This didn't happen, the decline continuing until Margaret Thatcher's reforms transformed the UK economy through the brutal amputation of all the dead areas, but that was still ten years away. What was hoped was that through access to European markets and hopefully some aid money the sick man of Europe, as we were then, could be cured through the standard statist medicines, but the money never came. The UK has always been a net payer, even when Thatcher managed to beat the British Rebate out of them we were still a large net payer. Before her it was in a desperate attempt to at least get something back from the EU that the regionalisation idea was thought up by Edward Heath, which didn't do much good either being at the time only 2.8% of the budget with the largest part of it going to Italy.

The UK has never got much from the CAP, always the biggest item on the bidget, and it was never supposed to. The CAP was created in the late sixties to try and lessen the blow to French farming and smooth the transition to a more urban and industrial society from a more rural and agricultural one in the hope of avoiding a full communist revolution. Countries like the UK which already had shifted to being industrial and already had efficient agriculture sectors where expected to pay for this, which we did. It began as a way of getting everybody else to pour money into France, and has continued in the same vain with France still the main beneficiary even though since then it has steadily evolved into the system of naked corporate welfare.

Then there is the CFP. When the UK joined the EU suddenly the CFP sprang into existence based on the demand that all EU countries gain an equal access to everybody else's fishing grounds. This hadn't been the actually been case before and it just so happened that the UK had fishing grounds that where considerably bigger and considerably better than those anybody else that was already in the union. The Norwegians and Icelanders where also to join at this point, but refused partly because of this new demand would have also opened up their fishing grounds. They understood that giving away control of a large natural asset probably wasn't a good idea and today Norway and Iceland have sustainable fishing grounds. Those that used to belong to the UK are heading for collapse after 50 years of mismanagement from the EU.

If most EU programmes tend to screw the UK perhaps this one will be different? We are after all heading into difficult economic times. That is true, except that the rest of the Eurozone countries are already in deeper economic trouble than we are. All of the other large economies in the EU have already had a quarter of negative growth when we just had no growth. Germany and some of the smaller Eurozone economies are already technically in recession. Not being hobbled by the one-size-fits-none interest rate of the Euro we are likely to come through the present difficulties in better shape than the Eurozone, just as we came through the bursting of the Dot Com bubble better than they did. So in all likely hood the people most likely to dip into Gordon Brown's £12bn fund will be businesses in the Eurozone rather those in the Labour heartlands that he is hoping to use this as a bribe for.

Will this fund come into existence? Probably. Will Gordon use it for all the propoganda value he can? Definitely. Will it actually do any good? Almost certainly not, it will just be yet more EU corporate welfare at the expense of hard pressed tax payers.


Blogger John B said...

How do Denmark and Spain, both economies that were always more fish-dependent than the UK (and indeed, that still produce more fish than the UK) fit into your *cough* analysis...?

3:23 pm  
Blogger chris said...

Both spain and Denmark get more in subsidies for fleet modernisation than they get for fleet decommissioning, the same as everybody except 5 countries, and of them the UK fleet is hit hardest.

The UK contributed the best of the pooled fishing grounds. Fishing grounds that have now been systematically overfished, because every year the EU heads of state get told by the scientists they employ that drastic cuts are needed in fishing levels to prevent their continued decline and every year the quotas are not cut by nearly enough because everybody wants everybody else to take all of the pain in a classic tragedy of the commons.

Some countries do end up taking more pain than others though since most countries receive millions of Euros more in subsidies for modernisation than they do for decommissioning. The UK is one of them.

Demark and Spain on the other hand get more money for fleet modernisation (to chase ever fewer fish) than they do for decommissioning, plus access to the UK's fishing grounds. Until the CFP wipes out all life from the formerly teaming North Sea they do quite well out of it, at the UK's expense.

Now fuck off and try learning a bit about the subject since you haven't even bothered to read the articles that I linked too you troll.

7:11 pm  

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