Friday, October 26, 2007

A short note on the European Union

How has the EU misused their power?

1. Common Agricultural Policy inefficient use of EU money. Subsidies given for political reasons rather than economic. Cost of CAP was over 60% of total EU budget, this has now fallen to 45%

2. Bureaucracy. Costs of bureaucracy of EU are a high % of total expenditure

3. Common Fisheries Policy. This is estimated to cost at least £1 billion a year to Britain in lost jobs and reduced catches. But, has also failed to stem over fishing in the north sea. [1]

4. Over Regulation - It is estimated that 70% of new British laws come from Brussels. Holland claimed that enforcing EU regulations has led to a cost equal to 2% of GDP.

[1] Report is by Bruges group which is anti european. Statistics can be manipulated. For example, the Bruges group claim the cost per head of EU membership is £873, but, according to Foreign and Commonwealth office the cost is about £300 per head [1] (and this is before the benefits of membership are included.

[2] To answer the question has the EU misused its power may require a consideration of political factors, such as loss of local democracy. However, the impact of the political nature of the EU, is not in the remit of Economics

See also: Benefits and disadvantages of EU membership

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