The Costs of Divorce
At the heart of this week’s Brexit shenanigans is a fact: Britain pays more into the European Union than it gets back. This is an opinion-free fact. (They do exist.) It takes no account of the wider benefits that membership brings to Britain, the continent and the world. The fact is there whether you believe, as I do, that some form of payment is worth it, or, as those who voted Leave last June do, that any amount is a tyrannical imposition.
One of the strangest things about the infamous Boris Johnson/Nigel Farage lie that Britain sends £350 million a week to Europe – actually two lies: the amount, and the idea that state-haters like Johnson and Farage would rather spend it on the NHS – was how unnecessary it was to the Leave campaign. If they’d used the actual, lower figure – about £220 million – it seems unlikely the voters of Britain would have shrugged and said: ‘Oh, that’s not much, is it.’
One of the consequences of the notoriety of the lie has been to obscure, particularly for Remainers, the net contribution that Britain really does make to Brussels every year. By ‘net contribution’ I mean the money the British Treasury gives the EU after the money Britain gets back has been taken into account – subsidies to British farmers, grants to British scientists, aid for poorer parts of Britain and so on.
This net contribution is considerable. In 2015, the EU had a surplus of €51 billion from 10 net donor countries to distribute to 18 net recipient countries. Germany was the biggest donor, giving €17 billion more than it received; Britain the second biggest, at €14 billion. Next came France (€6 billion) and the Netherlands (€5.5 billion), followed by Italy, Sweden, Denmark, Austria, Finland and, mysteriously, Cyprus.
Among the net recipients, the leader was Poland (€9 billion) followed by Czechia (€5.5 billion) and Romania (€5 billion). Most of the rest are other post-communist states in the east, or Mediterranean strugglers like Greece and Portugal, although Belgium is in there at number 10 (a net beneficiary to the tune of €1.5 billion) and Luxembourg, with its population of 570,000, at number 11, in the black by well over a billion euros.
This doesn’t mean, as Brexit supporters might think, and as the Great Lie had it, that Britain has a strong hand – that they need us more than we need them, that with all that money we save, we’ll be rich. The potential for catastrophic damage to the British economy as a result of old-style trade barriers between Britain and the EU is there; a hard Brexit – a crash Brexit would be a better expression – would cost the country far more than €14 billion a year.
What it does mean is that the Remainer critique needs to take into account the effect on bureaucratic psychologies across Europe, on the individual and corporate level, of suddenly losing a massive chunk of their budgets. In 2015, Britain’s net payments to the EU made up more than a quarter of the organisation’s donor-to-recipient surplus, most of it directed to the ongoing post-communist infrastructure upgrade of eastern Europe.
So far the Remainer critique has focused on two elements: the prospective economic damage to Britain, and the moral abdication Brexit represents – tribalism over humanism, chauvinism over open-mindedness, hoarding over sharing, nostalgia over imagination, jingoism over peace. This is fine as far as it goes, but there’s a danger that repulsion for the Brexit spirit leads to an over-idealising of the EU, as if it were only about humanism, open-mindedness, sharing, imagination and peace. It’s also about money.
Britain’s situation would be difficult enough if it faced an EU that merely felt betrayed and disappointed, masking its hurt with a curt determination to observe the formalities and get on with its life sans the small-minded churl across the Channel. But it’s worse than that: Britain must also deal with European leaders who face making deep, unforeseen cuts in their long term plans for the poorest regions of eastern and southern Europe. European officials experience loss of face; their own departments are trimmed back; their prestige suffers. Luxembourg falters just a little. Perhaps they blame Brexit; perhaps they blame Jean-Claude Juncker.
The week of Juncker’s dinner with Theresa May – which concluded with him ‘ten times more sceptical’ about a Brexit deal than he had been before, and a headline estimate of Britain’s exit fee in the Financial Times at €100 billion (on closer examination, the figure wasn’t much more robust than the £350 million a week claim) – has been rich in divorce metaphors. It flattered Britain that one German MEP compared the country to a deadbeat dad who wanted to leave his wife and children without a penny. Yet it also underlined how significant Britain’s contribution is to the European family outgoings. The toxic combination of emotion, residual affection, deep shared experiences, accumulated resentment and a mutual sense of being financially taken for a ride by the other one’s lawyer that has doomed many an actual divorce to a crescendo of acrimony is beginning. How often the original consideration – what’s best for the kids? – comes down to a bitter, mutually destructive battle over money.