Monday, 6 December 2010

The EU Knew the Scale of Greece, Ireland, Spain & Portugal's Economic Problems All Along

The European Union never ceases to amaze me. Not in a good way, but in a way that FIFA's attitude towards England never ceases to amaze me. On a quick side note, FIFA are nothing but a bunch of anglophobic fat cat self-proscribed Kings with little to no warranted involvement in football. But that's a different matter, I just needed to get that off my chest.

Flicking through a text book on the European Union a couple of tables catch my eye. One of which is the table for "The Cohesion Fund". It catches my eye because the only four countries which got the fund were the four countries that need or have had major bailouts. Bizarrely, they're even in the order of financial strife.

The Cohesion Fund was set up as a result of the Maastricht summit to provide funds for 'energy and telecommunications' for the poorest member states. Pre-2004 therefore, the European Union knew very well that taking on Greece, Ireland, Portugal and Spain would be a disastrously risky move. The only way to tackle economic problems, according to the EU is to simply throw money. In total nearly 3 billion Euros were given to just four countries.

These four countries, in 2003, accounted for over a quarter of the loans granted by the EU. This in real money, for the period of 1997-2003 means that these four countries were granted a whopping 45 billion Euros of loans. That's equivalent to 20 years of savings from coalition government cuts!

It doesn't end there. In 2003 there were only four countries that were net beneficiaries of their EU budget contributions. Those countries, yes you guessed it, were Greece, Ireland, Spain and Portugal. The UK got 3% LESS back from their EU budget contribution. The table below shows the percentage profit made by the four countries:

Greece, Spain and Portugal shouldn't be entirely blamed for the mess that they are in. The three countries, were very reluctant in joining the Euro so early, citing that they felt they were not economically ready. The EU Commission, didn't care. Nothing was going to stop their European dream. Ireland, on the other hand, were very eager beavers.

What strikes me the most about all of this data is that it is an outright lie that the European Union had no idea that the four countries would pose economical problems both for themselves as nation states and for the European Union. They knew even when bullying a reluctant Greece, Portugal and Spain in to the Euro that they were playing with fire.

It is that what frightens me the most about the European Union. That they put their own European Dream ahead of reality, the attitude of regardless we will go on.