John Redwood’s latest blog discusses the EU’s efforts to take as much UK taxpayer’s money as possible
The UK is constantly being mugged by the EU.In recent years the UK state has had to pay fines in excess of £500 million for infringing EU rules. We have recently been faced with an additional bill for regular contributions because our economy has grown faster than others and is bigger than they originally calculated. Now they want the UK to stand behind a bail out for Greece, when the UK has an agreement with the EU that it will not participate in any Euro bail out.
The main money for Greece has been provided under the auspices of the EFSF and the ESM. These funds are for Euro members only and are provided by Euro members only. So far so good. Then up pops the Commission and suggests that Greece’s next “bridging” loan of maybe 12 bn Euros should come from the EFSM, which is money provided by all 28 member states of the EU to an EU country in financial stress. The money is borrowed by the EU, and member states stand behind the market borrowings. The UK government is right to reject the use of this mechanism for the special problems of a struggling Euro member. It looks as if the UK has now received legal assurances that we will not be liable for any of this money, and will expect full collateral against the amount put up by Euro area countries, along with watertight text.
Were the Commission to persist and to push it through without protection for the UK on a qualified majority vote which the UK lost, the UK should refuse to pay. If the EU tried this The UK Parliament should enact a one clause Bill amending the 1972 European Communities Act to make clear we do not pay any Euro bail out monies and would not accept the jurisdiction of the European Court on this matter.
The EU is free with its economic advice,telling the UK to cut its budget deficit and to get it below 3% of GDP. This advice is incompatible with its constant demands for more taxpayers money from the UK and its own spendthrift ways. Every penny we send to the EU is borrowed, to be repaid later by UK taxpayers. The sum needs to be cut.
It is difficult to understand why the EU and the Euro Group think they have more chance of succeeding with this latest Greek loan than with the previous ones, or how they think this is going to be repaid. They are lending more money to a country which is already in default with the IMF and the EFSF, as the EU’s own institution has made clear. They may want to use the EFSM rather than the ESM at this juncture because it seems to avoid the need for Parliamentary votes in the Euro area countries pledging the money, but as they intend to make longer term loans through the ESM they need Parliamentary votes on that. It’s a bizarre money go round linked to an economic policy for Greece which does not work.
Click here to read this piece in John Redwood’s Diary.