Europe

The news that the European Union has decreed that its Budget be increased by 4.9 percent in 2012 ties a knot in the stomach, as I ponder an Easter weekend spent in Margate rather than Majorca due to austerity. As Tim Montgomerie notes, the government is taking this opportunity to assert its euroscepticism. Stern communiqués are being worded; stark warnings are being issued. Behind the scenes, the government has joined with the Dutch, its closest ally on the Continent, to confront the avaricious Commission. Patrick Wintour reports that the French will also oppose the proposed Budget, and the Austrians, Danes, Swedes, Finns and Belgians are expected to lend their weight to the cause.

Vince, it seems, is Vince. But Britain is not alone in struggling to arrest immigration. A mass of displaced North Africans is descending on Malta and Italy. The United Nations estimate that more than 20,000 people have already landed this year and many more expected. Neither Malta nor Italy can cope alone. On Monday, Malta called for the EU to invoke a 2001 directive that grants migrants temporary protection in cases of ‘mass influx’. Italy also petitioned Brussels to spread the physical burden. The EU did not acquiesce in either case, which especially outraged the Italian government: both Berlusconi and immigration minister Maroni said that the European Union stands and falls together, and they threatened to withdraw.

Prisoner voting is back on the agenda. The European Court of Human Rights has rejected the British government’s appeal and declared that the coalition has six months to draw up proposals to change the law.   David Cameron now has to decide whether to ignore the Strasbourg Court or go against the will of his MPs, who voted overwhelmingly to oppose giving prisoners the vote in response to the court’s initial decision. In many ways, ignoring the court is the safer option. Tory MPs aren’t inclined to back down on this issue and if Cameron tried to make them he would create a lot of ill-will and take an awful kicking from the press.

13 years ago, The Spectator carried an interview with Nigel Lawson in which he gave his views on the EU’s Economic and Monetary Union – views that seem especially prophetic today. ‘It’s going to be very nasty’, Christopher Fildes, The Spectator 2 May 1998 The Nigel Lawson Diet now seems to suit its inventor. Gone are the days when I had to defend him as chancellor against his girthist critics. Then he fell out with Margaret Thatcher – at first, over Europe. He wanted to put the pound into the exchange rate mechanism: she would not hear of it. Now I catch up with him at the House of Lords, in one of its fine rooms that the Lord Chancellor has not yet collared, looking out across the river. Europe is still on our minds.

Tucked away in an old building, where few people knows of its existence, lives one of the most important parliamentary creatures - the House of Lords European Union Committee. Often ignored because it applies analysis to a debate where loudness is the main currency, it has produced a new report on the Single Market. The government would do well to read it. For pushing the Single Market should be what animates the Europe Directorate in the Foreign Office. The Single Market is the main reason for British membership of the EU and the committee implies that successive governments, including the Cameron administration, have dropped the ball in this area. As their report puts it, the UK should 'return to its position of strongly championing the Single Market.

Robert Peston called it: the Irish banks are mired. The latest round of stress tests has been conducted and the headline figure is that the Irish banks face a shortfall of 24 billion euros. A major recapitalisation will follow and it’s likely that more institutions will be taken under state control. Ireland is also likely to ask for more cash from the EU. These tests were based on conservative criteria, where the Irish economy contracted by 1.6 percent this year, unemployment peaked at 15.8 percent and there was a cumulative collapse in property prices of 62 percent. It’s grim in Ireland, but not that grim: most forecasters are predicting GNP growth of around 1 percent in 2011.

Last night, Portugal's parliament voted to reject its latest measures to deal with its deficit. It was the fourth time that the Portuguese parliament had been asked for more taxes and for more spending cuts. The result has been a further loss of confidence in Portugal’s ability to pay its debts. Market interest rates have risen to over 8 percent. European leaders are meeting this weekend to work out a path forward. The lessons for us here in the UK are starkly clear. First, it is better to set out all the difficult decisions needed to deal with the debt crisis, even if these take place over a number of years, rather than continually going back to ask for more. That the Budget was neutral overall shows that a clear plan is being followed here.