Recent British moves to reduce cohesion part of the European budget seems short sighted from several points of view.

Certainly freezing CAP in the current shape of it will receive support in France, reduction of contribution will be well received in the Netherlands and keeping the rebate intact certainly will be positive for popularity ratings at home, but at the same time we should remember that the coming budget might be the last one where certain former-communist states will still be net receivers.
Some are quickly approaching to the frontier where they will start financing projects in other, also older member states (hear that Greece?).

This pace might be affected by freezing of important funds - which as studies are proving are returning to many of the contributors in one form or another anyway so also to Britain.

The next budget will also cover several infrastructure projects in former communist states, some of them very important to the entire region unlike the ones presently under contruction which usually concentrate on national projects.

Considering that more than once, twice or ten times British interests already clashed with interests of the new member states from their accession it is certain that soon United Kingdom might lose any friends it managed to gain if it acts too carelessly.

And we are not talking about Slovenia or any small, single country here, but possible coalitions which might be suddenly able to get support when Britain wouldn't like it.

Wouldn't enjoy it at all.

Bravo Cameron

Reform of the CAP is a must...even for the French, who are now net contributors to this policy....the only real beneficiaries are inefficient farmers.

We must also remember that we are part of Europe even if we are not in the eurozone and should be prepared to see the bigger picture...what is good for Europe is good for us....ie if the Eastern European countries have stronger economies and job creation, many more workers are likely to stay or provide job opportunities for British works and a market for British goods.

Alienating everyone in Europe for the sake of playing politics at home will backfire in the long run as Britain will just find itself outnumbered and outvoted and unable to influence policy in any meaningful way.

Mr Cameron’s idea sounds a form of populism this time. While the Europeans should shift their respective sovereignty by large to Brussels (NB: It does not necessarily be geographically Brussels but the central government of the union anyway), his real intention is to find a good excuse to delay the move as long as possible, inciting what Hayek calls 'tribalism' among the constituency back home. The cap is a typical case of excuse this time. That could lead to a dangerously protectionist society within the union of states in the long run to eventually repeat the tragic history.

Of course, Europeans should not rush the move, either, or it would also incite another huge scale of tribalism as a protest. While the cap fixed to the CPI is too static and radial, an unlimited discretion on the budget is also too radical. The latter could cause a fuss amongst the states at every decision-making. The right answer must naturally be in between.

In conclusion, Europeans should forge a form of budget cap that is more kinetic than what Mr Cameron requests, considering the long-term development of the pan-European socioeconomic framework. Europeans should not move their 'Overton window' at his extremist request but stay firm with the fundamentals of developing the union by international solidarity, not by tribalism.

(I wonder if the UK wants to remain such a troublemaker for ever).

You call it "happy on the sidelines". I call it playing the old XVIII Century Europe game. The world is different, though, three Centuries later, and ultimately the UK will realise that playing solo now, is fruitless and very expensive. As an old imperial power, it should think about ways of recuperating in the future some of its old might. The European Union seems a great instrument to do so. However, restricting its budget to already modest pre Lisbon levels, won't help the efficacity of the tool.
Interestingly enough, the seduced eastern European members, will now find how perfid can Albion be, when its short term political interest are at stake. No generosity at all to its long courted, skillfully mesmerised eastern "torcida".
It reminds me all the time of my balcanic times, with people loosing lots of energy underlining their differences and identities, their contempt for their neighbours, playng allways short term egoism against each other at all levels...
That would'nt matter if we where in the XVIII Century, but we have to deal with a totally new paradigma, where a battle of titans has started, with no play for pollitical dwarfs (the EU) or willful squires.

Three thoughts:
1) For the moment there is no real problem here - although I do not see why it was necessary to elect a Brit as foreign spokesperson for the European Commission - the UK should not be allowed to aspire to "lead" Europe if they do not want to participate fully. I will say again, Merkel and Sarkozy made a fatal mistake backing Van Rompuy/Ashton instead of the Juncker/D'Alema tandem.

2) So far the Brits are only justifying DeGaulle's opposition to UK membership lo those decades ago. On the other hand,

3) If the UK ever joins the euro, the dollar is toast. Of course the British leadership, from Her Majesty on down, know this and are reluctant for exactly that reason...

From Structural and Cohesion Funds countries like Spain received over $60 bn., just a fraction of the increase in imports from Northern European countries. Those funds helped to create one of the most modern road and railways system in the World, even if most superhighways in Spain are private (so E.U. Funds did help a lot to reach towns and cities)

Now the Europhobic Czcehs are between the sword and the wall because as deep anti-Europeans who hate the European Union they cannot accept any compensation for opening their market to Northern European countries as the Czech Repbulic is very free-market, so have to say that they don´t want a single Euro from the E.U. Budget...as their British masters have ordered them, and most European countries agree. The U.K., Germany and France doon´t want to give a single Euro to such an Europhobic country. Spain also don´t want Czechs to recieve a single Euro from Structural and Cohesion Funds as it would mean we lose part of our own Funds....

Some of these posts seem to imply that the UK is the only 'tribal' large member of the EU. This is laughable. The other major players (France, Germany, Spain, Italy) are intensely so in fighting for their own nationalistic interests. Take France on the CAP, or Spain on the EU Fisheries policy as examples.
It is also clear that every expert agrees that the fundamental cause of the Euro crisis is the fact that it is a common currency for many widely different nation states with no common monetary policy or even agreement on monetary theory or style of economy. Before you condemn the UK as a spoiler sitting on the sides in the EU, just think for a moment whether France or Germany would actually give up ultimate control of their economic policy to a supranational EU body? Not for a second.
It seems to me that the current overriding concern in Paris and Berlin is an entirely political calculation of the ruling elites in both countries and it is this, that French and German banks must not suffer massive losses or even fail. This would bring electoral doom to the Sarkozy and Merkel administrations and far from worrying about the interests of Europe as a whole avoiding loss of power is the number one aim.

It's a shame that Charlemagne can't see beyond the carping intrigues of anonomous "commission officials".
Very much par for the course though.
Would Charlemagne judge that the EU bureaucracy is more or less unpopular with Europe's PEOPLES that 12 months ago ?
But the deeply corrupt "officials" can do no wrong, whilst the people don't really matter, do they ?

With Britain having being one of the few EU countries to fully open its labour markets to the 10 new members right from the start, and with so many young people from Eastern Europe having gone to work in Britain, as well as Britain's support for the new members' accession from the outset, the UK's goodwill among the Eastern European countries is very high.

Furthermore, given that most of the structural funds allocated to these countries are not actually drawn, due to the insufficient quality of projects submitted from the side of potential beneficiaries, I cannot believe that Cameron's move will have so greatly upset Britain's East European allies.

They might not agree with the freeze, but they're not heartbroken.

Eastern Europe may only benefit of a little realism. The European dream became too dreamy and I am afraid it has negative impact on economies which still need to build themselves. Even he funding from EU, in my view, had in many cases destructive effects when combined with a psychology of populations grown in command economies - it actually eroded the fragile free market habits in their infancy and directed too much funds through bureaucratic decisions - just like the old times. Limiting the union will not harm the East in the long run, it may even prove useful.

Sooner or later Europe will need to succumb to a vastly increased inflation in order to get in touch with reality again. I am continuously amazed how democracies and free markets with so much history managed to degrade so much. It appears that this forced integration put too much control over the markets in the hands of the governments and no matter if we wish to accept the truth our continent started to express a lot of the traits of a command economy and doesn't show any indication of slowing down. The mechanisms are different from the communist states from the past, of course, but the distribution of economic irresponsibility is wide enough to make people like me fear that the free market is dead. The dispositions I am facing almost every day show it quite clearly - involvement with government figures, means to procure EU money (given by officials too, of course) is considered more important than the client, the product or the market in general for too many managers and entrepreneurs. In some East European countries the government is the market that matters - everything else is considered a little detour. Why should we accept a heavier tax burdens only to fuel such a process further? I think history has shown how dangerous this is. I fully understand that I am escalating the topic a bit, but isn't it all about our well-being in the long run. I can see nothing wrong with the British move here - it may be a bit "divisive", but may be this is exactly what Europe needs - a little division instead of too much and too fast integration if it results in sacrifice of everything that makes us what we think we are (but aren't).

Opinion on current EU efforts: "It looks like a car with square tyres. It is not fast, nor comfortable for the occupants. And it certainly looks ungainly to passersby."
http://www.mindfulmoney.co.uk/2776/economic-impact/the-eurozone-bailout-...

Following my previous post, one should not forget that the Britons are the only nation who receive big rebates on their EU budget contribution. (Check how big). This means they would virtually be the only nation in the European Union who would be exempt from the indexation proposed this time by them and the other four nations (i.e. The Germans, Dutch, Finns and French). What the Britons may possibly say about beggars and the Central and Eastern European nations would backfire on them immediately.

The money that each state contributes to the EU counts only 1 per cent or so of its GDP. The British trick behind this proposal of indexation is to incite tribal populism by making people focus on the contributions regardless of the amounts in order both to delay the European integration and to divert their attention from the rebates the Britons receive.

I would never support such a populist trick that involves the abovementioned four nations who see things from a different viewpoint from that from which the Britons see.

The European integration or solidarity is not phony, illusory or too dreamy at all. Every European citizen should interpret it as the long-term practical framework that would avoid an excursion into tribal populism every time market liberalism, which is epidemical by every few decades or every few generations of human being, has failed and eventually harmed public finances.

(My pseudonym sounds Polish, but I am not a Pole. Don’t have any tribal hostility towards the Poles because of my criticism of Mr Cameron).

JoeSolaris, then maybe the UK should be paying a lot less in to the EU, or nothing at all. If the EU is happy to take British taxpayers Sterling, then the UK will continue to have its say and its level of leadership.

The EU is wasteful, it could easily do what it does now with a vastly smaller buget, it just needs to end the gravy train.

None wants to pay more right now, maybe the easterners would like to up their present contribution?

Jasiek w japonii, all I understood from that was a a repeat of what a German guy once said "ein volk ein reich ein fuhrer". Sure you want everyone ruled under one Empire, your not the first to say it, and its not a new idea, but whatever kind of Socialist you are, your a leftover relic from a failed past.

The Commission and the Bureaucrats need to look at there budgets and cut the crap. Cameron is right, the EU gets enough, its how it chooses to spend that cash which means the easterners may not get what they could really do with, while EU funded projects continue in Portugal and Spain, who could fund it themselves if there governments were less corrupt.

Why doesn't the ECB simply give a block grant equivalent to a thousand euros per capita to each country and allow each country to decide how best to fund their spending?

Subsidiarity at it's best! Chokes the Euro 'crisis' off at the source, problem solved!

The UK rebate mechanism is by now of near laughable complexity and the only reason that it may be allowed to continue is that Member States, and the net contributors in particular, have become rather accustomed to knowing exactly how much they put into the coffers of the EU and how much they get back.

UK journalists, and others, usually refer to the UK getting back two-thirds of its contribution or something on those lines. This is not, of course, the case. Spending in all Member States is meticulously calculated by the Commission in order to work out the share of the UK and that share is compared to the UK's relatively high share of the VAT element in the overall budget, the first is subtracted from the second, the difference (usually around three percentage points) applied to the total of EU expenditure in Member States with the UK getting back two-thirds of the sum that results.

As the logic of the mechanism is that the smaller the difference, the less the UK gets back, it has been calculated that the UK funds over 80% of any EU expenditure in the UK itself (which must place the Treasury in a rather conflicted position). And, of course, the share that other countries get also impacts on the calculation of the UK's share which, during the last negotiations, would have resulted in the UK not bearing any of the cost of enlargement were it not for the agreement by Blair, in extremis, to allow another bell and whistle to be added to correct this anomaly (among an entire series accumulated since the deal was agreed with Margaret Thatcher in Fontainebleau in 1984).

But the thrust of Charlemagne's article is correct. The UK is increasingly on the sidelines and Cameron seems to like it that way. He knows that any dispute about the rebate is political poison for him and so do the other major net contributors. The only problem for the latter, and especially for France, Italy and Spain, is that the cost of the UK refund has to be made up by the others and they carry the major part of the cost, Germany having astutely negotiated a reduction to just one quarter of what its share should be.

Cameron seems ready, just as Blair was, to ignore the interests of the countries of eastern and central Europe. There is a certain logic in this. The countries that have negotiated a reductions in their contributions, a rebate on the rebate, Germany, Austria, the Netherlands and Sweden, have been among the major economic beneficiaries of enlargement. Should they not consider loosening the purse strings somewhat?

The letter itself is of no real importance. All the net contributors obey the obvious logic that the smaller the overall budget, the smaller the overall cost to them. But the timing could hardly have been worse.

Jasiek w japonii

I do not understand why someone giving themselves an apparently japanese name would be so concerned with the welfare of the "EU".

"This crisis is slowly creating a two-speed Europe: Britain with more core integrity, and a periphery inhabited by the unhappy and loose euro".
This is how the conclusion should be (keeping exactly the same factual argument).

I have just happened upon a useful schematic guide to the coming budget debate between the six biggest Member States.

http://www.ilnprints.co.uk/popup_image.php?pID=1709&image=0

Well let Britain inhabit the sidelines. Does anyone truly care that much? it's been like this for ages, it's kinda part of what they are it's nothing new. Especially with a conservative government in power. They seem to like it that way , so let them be.

I think one of the major problems of Britain is that its aspirations, and I do apologise for the bluntness of this affirmation, are nothing but to become a small version of the US, and copy whatever they do.

I thikn the UK should realise that the US is far too big, and if need be they'll dump their "special partnership" with the UK (which was literally unilaterally promoted by Britain) and move to another partner in Europe (for decades the US looked at France a lot more than it did to the UK).

This foreign policy "model" the Uk seems to have adopted is a bit radical in my opinion. Other nations in Europe, including small little Portugal here, claim themselves as Atlanticists as well, but not to that point of radicalism. In fact Portugal and Spain , two countries that not so long ago, had their backs turned against each other are finding ways to lobby and protect each other's interests in global affairs. Of course it's not perfect, nor will it ever be, being Spain 4 or 5 times bigger than Portugal, but it's truly been very advantageous, and it hasn't undermined Portugal's "Atlanticism". The same could be said about intra-european partnerships like the Scandinavian nations a case of absolute success, and BeNeLux, or even Franco-Germany. Who ever does not realise that together, Europe is stronger, is clearly just lagging behind. Just my point of view.