The Guardian view on the EU budget: hitting the wrong notes in Hamilton | Editorial

Posted by on July 24, 2020 1:30 pm
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Categories: Global Stories

Brussels has the authority to borrow for the EU as a whole in response to the coronavirus-induced economic crisis. But cuts to national budgets are not the way to repay bondholders

The European Union is a global heavyweight in trade and climate. But in political terms, it is puny. For all the Brexit conspiracy theories of a “United States of Europe”, the EU has no federal government. Brussels is not the continent’s capital, but home to its bureaucracy. The club’s power lies with member states that zealously guard their interests and scrupulously defend their sovereignty. They often recoil from shared burdens and a collective will.

The EU is not hiding plans of integration, it just has none of any note. Over the last three decades, the appetite for greater political and fiscal union has been shrinking, not growing. The EU’s budget in 1993-1999 was 1.25% of the club’s gross national income (GNI); for the next six years, beginning in 2021, the proposed budget of €1.07tn is just a shade over 1% of GNI. This seems too thin a sliver of European wealth for a continent that faces a possible ruinous recession caused by coronavirus.

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