Spain Chooses the Worst Moment to Enter the Club of Rich Countries

30 Nov

Spain will become net contributor in the new European budgets. Analysts fear that cuts in the accounts of the EU will bring further adjustments.
Since Spain became part of the European Union back in 1986, the country has always received more than what has been given: that’s to say, Spain has been a major net receiver of European funds. Thanks to this, Spain was able to take a major leap forward in its development. But those days are gone: in recent years, with the enlargement of the EU, Spain has crosed the room to become part of the club of the wealthier countries in the EU. And that agreeable new condition within the EU makes it liable as a net contributor for the new Community budgets – cresting at a trillion euros – for the six years of 2014 – 2020.

Although there is no final agreement on new budgets of the EU for the next six years, it is certain that there will be major cuts. Germany, the Netherlands and Sweden want the cuts to be 100,000 billion; while the Commission prefers to consider cuts nearer the 80 billion mark. Regardless of the final agreement, Spain will, for the first time, have to contribute more than what she will receive. The amount is still to be determined and will only be known when the 27 Member States reach a consensus, expected in early 2013.
After the failure of the Brussels Summit, the Spanish EFE News Agency has consulted several experts: all coincide in stating that the cut in the budget of the European Union will inevitably mean additional cuts for Spain.
‘Community funds are a transfer to the Spanish State, and when they no longer arrive there will be less money available, obliging the State to make more cuts, or failing that, to use revenue from other sources’, explains the Professor of Economics at the IESE Javier Díaz Giménez.
Professor of Finance at the University of Santiago de Compostela, Luis Caramés, says bleakly: ‘it is the worst possible time for Spain to become a net contributor to the EU. The economic situation of the country and its extreme financial fragility leave little margin for negociation’.
That is why it is essential that Spain manages its alliances in the face of the forthcoming negotiations. Thus the case of the common agricultural policy: ‘France is the country that receives the largest share of funding for the countryside, followed at a distance by Spain’, says Robert Tornabell, a professor at the ESADE Institute. Tornabell thinks that Mariano Rajoy ‘is working well to regain protagonism in agricultural affairs with the President of France, François Hollande’.
According to Tornabell, ‘Spain should consider a Union with two axes: persuade the United Kingdom to remain in the EU, giving it prominence in what has been Britain’s traditional role: defence and foreign affairs. Germany would stay masters of taxation, the European banking system and other financial aspects’.
The strange thing is that, after a century of poverty, a cruel civil war and a rapid if uneven rise to some kind of prosperity, Spain, with its higher than ever barriers between the wealthy and the poor, with a crumbling middle class and a staggering unemployment figure set to rise over the winter, is now one of the Rich Countries of Europe.


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