Merkel – “EIB Not Adequately Supervised”!

In Brussels this week our EU leaders are holding Summit Meeting to plan the EU’s budget for the coming years. The main points of negotiation are the size of payments from “rich” to “poor” member states, payments to support agriculture, and the size of rebates that reduce the size of payments by rich countries. The amounts of money are huge – the total budget is around 1% of the EU collective GDP, which sounds rather small but it is roughly:

€1,000,000,000,000

This is a huge amount of money that like all public spending has a habit of creeping up, and never goes down.

Various proposals have been made to reduce the size of the budget – one proposal was to increase the European Investment Bank’s (EIB) share capital to permit a huge increase in its lending. This was opposed by Ms. Merkel who reiterated one of Germany’s longstanding concerns that the institution is not adequately supervised.

Ms. Merkel claims that the EIB is not adequately supervised.

That is an extremely serious accusation and us Finns should expect that our representative there, a former Conservative Party Prime Minister, Mr. Stubb, to give us a full report on why the German Chancellor has given such a strong vote of No Confidence.

We should be concerned about such statements given that the EIB has a huge balance sheet of €555 billion.

If the EU cannot control its own bank then how can we trust the rest of their organisation?

Basically the rich countries do not want to pay more money in to compensate for the UK’s departure from the EU, and the “poor” members states do not want to see a reduction in the grants. 

Readers may recall that both Luxembourg and Belgium are net recipients of around  €3 billion of EU grants and enjoy enormous benefits by housing the EU administration. 

The summit is a waste of time if they cannot agree on cost savings and reduction in grants:

    • Brexit has happened and now there is less money than before. 
    • The second Parliament in Strasbourg should be closed down because it is wasteful and time consuming to have 2 buildings 400 kilometres apart.
    • MEP’s travel and housing expenses should be based on regulated invoices.
    • The Common Agricultural Policy should be reduced to zero. Why should agriculture be supported when we know that subsidies disrupt markets and that abuse is rampant. Agriculture is a normal economic activity and does not require EU interference or support.
    • All grants and subsidies should only be used for short periods in times of crisis and be subject to adherence to the Rule of Law and to EU values.

These reforms would radically reduce internal payments and restore public trust in the EU.

Climate change is the biggest problem that they should be discussing today, as well as dealing with Trump’s protectionism and Putin’s war crimes in Syria. 

We need to have a more united foreign policy for the EU as a block and not something that France or Germany wants for their own benefit.

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