The budget of the EU and interests of member countries
Material posted: Publication date: 09-02-2013
The single currency was supposed to bring stability, but all the blame for the crisis on the Euro introduction. On the issue of the Euro was broken the last taboo, and made it French President Francois Hollande, who opened the debate in the European Parliament: "We have to think about the role of our currency in the world. The Euro cannot fluctuate depending on market sentiment".

This is equivalent to the statement that it is necessary to revise the European and international monetary policies and to establish a mechanism for manipulating the European currency, as do all countries of the world. In the opinion of the French, the only way to revive the export and restart a jammed motor of some economies of the Eurozone.

This is a clear statement of Hollande was made on the eve of discussion of the European budget for 2014-2020, which will take place on 7 and 8 February. It is a pity that it is interested in only some, but not all countries seated at the negotiating table.

Opposite interests. Indeed, Brussels will face two opposing blocs. Italy, France, Spain and Poland are ready to protect the investments of the EU in an attempt to provide opportunities for economic growth. Other countries led by England and Germany are in favour of austerity measures and reduce the cost of European bureaucracy.

Hollande made it clear that the story about dragonflies and ants, about moth and lean no longer works. It's just a beautiful sign, which hides the conflict of interests. On one side is a large European enterprise, Economics, suffering from a loss of competitiveness and the strong Euro, which leads to lower exports. On the other hand — Britain David Cameron, which has little interest in the single currency and the state of the industry, the Scandinavian countries, making the emphasis on the development of services, and Germany, exporting competitive goods and anxious to reinforce the Euro and boost domestic demand.


France, Italy and Spain and industrial front

These two ideas of economic policy are deeply different. The Maginot line splits into two parts the Old world. Hollande made it clear that he is ready to fight: "Without reform of the international monetary policy could be further developed. We ask countries to make efforts to increase competitiveness, which are then undermined by a high Euro." France belongs to the countries whose economy suffers, as can be clearly seen from the figures. The budget deficit in France reached 86% of GDP, no growth, and the unemployment rate reached 10.3 per cent. The figures speak about the decline of the economy, and the austerity policies of Brussels and the high exchange rate of the Euro bothering to get out of this crisis.

700 companies produce goods in other countries. Primarily affected the production. Enterprise in an attempt to reduce the ends are trying to establish production in other countries, where rabochie power and energy are cheaper. According to the European monitoring centre restructuring (European restructuring monitor (Erm), from 2001 to date, 700 European companies left Europe. Of them 73 are French, 38 Italian, 22 Spanish. But in General such enterprises is much more.

To prevent this process and keep jobs in the homeland, the countries of southern Europe in the first place in the EU budget put investment in the industrial and agricultural sectors. Their goal is the achievement of the Brussels agreement, which would guarantee the further implementation of the common agricultural policy (PAC) and the availability of funds for this purpose. These funds are needed to support the work of small and medium enterprises. In their struggle, the southern European countries can count on the Union with Eastern European countries such as Poland, which is a member of the single market, although not yet became a member of the Euro zone.

Working power has ceased to be cheap in Poland. From the nineties to the present day the difference in labor costs between Eastern Europe and Western has decreased by almost half. And now Poland feels stiff global competition.

The winds of protectionism. The question of production is very important, even if the United States put it in the first place in the political list. The wind of protectionism blowing not only across the ocean. In France and in Italy, the idea of a new protectionism is becoming ever more popular because of a growing conviction that Europe is not able to ensure that the national interests of Rome and Paris. Note that in September 2012 the former President of the European Commission Romano Prodi in his speech at the forum in Cernobbio Ambrosetti (Ambrosetti Forum) urged the EU to re-make the development of production.


Germany and the UK, the fight against inflation and global horizons

But the priorities of Merkel with approval of the European budget are quite different than those of Hollande and Prodi. Indeed, no sooner had the French President to Express my opinion about regulation in the Euro, followed by a replica of the German Minister of economy Philipp Rösler: "the Aim should be not the weakening of the Euro and increased competitiveness."

The return of the old saying about the fact that southern countries are not strong enough to be in the Euro zone. Still German exports grew therefore easy to understand that Germany had other goals and thoughts: it is impossible to prevent the growth of inflation. The explanation, as always, can be found in numbers. In the last three months of 2012, the unemployment rate was the lowest in the last twenty years, and consumption decreased by 0.3%. Hence the fear of further price increases and the special position of Berlin in relation to the proposals of the European Central Bank, which is a consequence of the economic policies of Frau Merkel and her Ministers.

Germany is looking towards China. In the end, the Germans want to preserve the hard achieved through reforms balance and excellent position in the global market.

Data on industrial production in Germany, providing 24% of GDP, should not mislead. Germany has relied on innovative industries and invested heavily in higher technical education, but also pre-and wisely moved some of the production mainly to China, which managed to make their first trading partner. It is no accident that Berlin opposed the proposal to introduce a compulsory label for goods produced outside Europe. Such a label would demonstrate the strategy of putting Germany their businesses outside Europe.

The rule specify the country of production is valid both in USA and in Brazil, but the governments of the countries of Northern Europe have always resisted the European Council for the introduction of such regulations. The European Parliament, where Hollande called on to regulate the Euro, voted in January 2013 for a new resolution to draw attention to the lack of law in this area.

The interests of great Britain and the Scandinavian countries. The interests of Germany close to the interests of Scandinavian countries exporting information technology and pharmaceutical products. Their social model is very effective. They do not intend to raise taxes, to increase assistance to the countries of southern Europe.They also are not interested in the protection of the industrial enterprises by industrial policy. The same can be said about the UK, which is betting on the development of industry, and the development of services. London has long been staked on Finance, from a distance looking at the United States. England is not interested in new European funds.

It is more interested to protect the pound from inflation. Northern countries it is easy to blame the European bureaucrats. No matter whether it is the most powerful continental power or the most skeptical about a United Europe country.

Faggionato Giovanna (Giovanna Faggionato)

Original publication: Bilancio Ue, questione di interessi


Tags: assessment , Europe , crisis