When is money not "real money"? Let's ask the European Commission...

There is a select group of masochists out there (us included) who devote their time to studying the inner workings of the EU budget. Its a very dry and technical process but at the end of the day the numbers matter - the UK's gross annual contribution (post rebate) this year is around €14.7bn, which easily exceeds the £7bn in fresh tax cuts David Cameron pledged at the Tory party conference yesterday.

Today, Commission President Barroso urged member states to sign off on a €4.7bn 'top up' to this year's budget, an issue we covered back in June. What struck us however was some of the language in a separate Q&A put out by the Commission, which contains gems like:

"The EU budget consists of commitment appropriations and payment appropriations. Broadly speaking, commitments are usually higher than payment appropriations and do not constitute "real money"; they could be compared to the amount mentioned in a contract any household or private company commits itself to pay at the completion of any given work. Payments, on the other hand, are "real money"; they are what the EU budget has to pay, again, just like any household or private company has to pay the builders once any contracted work is completed."

However, it is highly disingenuous to describe new spending commitments in the budget as not "real money" given that they are inextricably linked with payments: as the Commission itself is fond of saying, today's commitments are tomorrow's payments while today's payments are yesterday's commitments. 

It might however explain why the Commission is so frivolous when it comes to making new spending promises before then pressuring national governments to stump up extra cash i.e. "real money" to make up the difference.