Can’t Pay Won’t Pay was the slogan of ordinary Britons who refused to pay Margaret Thatcher’s Community Charge, the so-called Poll Tax, in 1986. It led to riots in 1990 which led in part to the then UK Prime Minister’s downfall.
We are not expecting a re-run for just-now anointed Jacques Juncker as head of the European Union, but for sure Britain’s David Cameron the prime minister, the demand to hand over £1.7 billion on December 1 is a rather unpleasant Christmas gift and one that will result in a rebellion of sorts.
Britain has to pay up because of a recalculation in the way the EU works out economic growth and contributions to the common pool of money. That recalculation was agreed by all member states, thunders Brussels, and involves our economic performance in the boom years of Tony Blair as well as the end of an earlier recession when Conservative premier John Major was still in Downing Street in 1995.
So in a way is Cameron faking his displeasure and hamming up his refusal to pay up? Surely he knew weeks ago what fiscal bombshell would be fired by the EU. It both plays into his calls for a EU referendum after next year’s UK General Election, and also boosts support for a party that might form a cosy alliance in government next May, the anti-EU UK Independence Party of Nigel Farage.
But the basis of the calculations are leaving many number crunchers speechless. Britain must make the biggest contribution, and as the graph below shows it appears as though we are to pay for everyone else’s losses and wins. The Netherlands has a hefty £600m to pay while Poland’s windfall of £249m makes Kazimierz Marcinkiewicz’s “yes yes yes” remark upon winnng £50m from the EU budget seem naive. What is more Poland has had several handouts in the EU and has also been the ONLY economy in all Europe to avoid recession totally in the eurozone debt crisis since 2009!
But we should ask how have these numbers been cooked up? Well surely no one is suggesting they are spot on? Britain had an up-down 20 years, while Germany which gets back £600m and France the most at £789m, had a fairly good run until just five years ago when the euro zone debt crisis flared. How can it be right that Greece which is nearly wiped out by its debt burden also has to pay, or that Italy, often a recession victim, has to as well?
None of this will instil any confidence in the EU and makes next year’s General Election wide open. It could be the most fascinating poll since the “Who Governs?” election of February 1974 and a lot less predictable than May 1979.
Today the ECB announced that 25 of EU banks failed its stress test. Hmmm. At least, the ECB bank stress test can no longer be accused of being a political whitewash. There is a God!