There has been much weeping and gnashing of teeth lately amongst the chattering classes and politicians in the UK and, perhaps predictably as we move ever closer to what promises to be the strangest election in recent history, it concerns money and the European Union.
Last month (October 2014), it was suddenly and rather breathlessly announced in banner headlines that Britain was going to be hit for a £1.7bn pound deficit bill from the EU. The UK Prime Minister, David Cameron, immediately went to Defcon 12 and very publicly rebuked the EU for the procedure it had adopted in making the announcement, for the timing of the announcement and, not to put too fine a point on it, for the amount involved. Perhaps I should just say that, though the amount is undoubtedly eye-watering if you look at it from a micro-economic perspective, in the great scheme of things, it is actually relatively small.
Nonetheless, Cameron had to deal with it. He is threatened, as we approach election year, by the traditional opposition party (Labour) and by a new party, UKip, whose sole raison d’être is to take the UK out of the EU. UKip is gaining traction amongst disaffected UK voters unhappy at the transfer of law-making powers from London to Brussels, so this was a timely opportunity from their perspective. The Labour party, as is traditional in the UK, will use any opportunity to “oppose”, so a £1.7bn hole in the country’s accounts – no matter how small the number really is – presents their front bench with a great opportunity to cause mischief.
So Cameron publicly got angry; George Osborne, the Chancellor of the Exchequer, got angry; Nigel Farage, the leader of UKip, drank several pints of beer, smoked a few cigarettes and rubbed his hands together with glee at this latest opportunity presented to him on a platter; Ed Balls, the shadow chancellor, got righteous. It was all great fun and also great political theatre for those of us who enjoy these things.
Finally, it was announced that the Cameron/ Osborne negotiating team had come back from Johnny Foreigner, waving a proverbial piece of paper at the foot of the aircraft steps and announced that all was well with the world. Under a deal that they had “hammered out” with these nasty, faceless Eurocrats in Brussels, the actual amount had been halved and payment had been delayed until after the next UK general election.
Ed Balls told us that Cameron and Osborne were dissembling and that we were due that rebate in any case – there was no new money on the table from Europe. Nigel Farage told ITV's “The Agenda” program that Britain should tell the European Union to "get stuffed" over the £1.7 billion bill. Asked what he would do, Farage said, "I wouldn't pay it today. Never."
And then, on 8 November, the Guardian explained all! Yes, there had been a negotiation, but there had been a significant re-packaging of the deal. This had the benefit of allowing the UK government to claim a significant moral victory (delayed payment and the inclusion of an existing rebate to make the deal more palatable from the UK electorate’s perspective), whilst also ensuring that the EU did not lose out on a much-needed income stream.
Negotiators too often make life difficult for the other side by imposing a deal that is really difficult to sell to their superiors/ constituents. The skillful negotiator will always attempt to re-package an unpalatable deal so that is easier for the other side to sell to their people.