Note to EU: This is how austerity works

Ireland’s economic troubles are well documented, but at least the government has demonstrated its willingness to get to grips with its own budget deficit by taking some unpopular decisions, this time not with the electorate however, but with its own ministers. The Irish Independent reports that Taoiseach Enda Kenny vetoed his Justice Minister Alan Shatter’s request to use the government jet to fly to an informal EU justice and home affairs council meeting in Poland back in July.

It is reported that the trip would have cost around €20,000, but by flying with commercial airlines (SaS outbound, Ryanair for the return trip), Minister Shatter and his delegation notched up costs of around €3,000, thereby saving Irish (and European) taxpayers around €17,000. We appreciate that this might not seem like a lot in the context of the multi-billion euro bailouts, but it is arguably a lack of such prudence at all levels of government spending that precipitated the debt crisis that followed on the heels of the banking crisis in the first place.

Given that the EU is currently engaged in negotiating both next year’s EU budget and its Multiannual Financial Framework – long term budget – for the period 2014 – 2020, perhaps could serve as an unlikely but important precedent...

EU subsidised travel? The next step in a Summer's dream

The glorious weather in London today has reminded us of a story we noted last month - but have not yet had a chance to share here :-)

In these rather gloomy (except today) and dark times of recession and gloom, what could be more uplifting than a holiday, to an exotic destination within the EU, subsidised by the European Union. Sounds great huh? Well, perhaps it's not so uplifting or great when we consider where the cash will actually come from - our less than exotic taxes.

It may strike many as a rather strange ‘initiative’ for the EU to introduce when we consider that most member states are presently stuck in a debt trap deeper than the Spanish caves of Drach. But no, as ridiculous as it sounds, this isn’t a joke. Under the Lisbon Treaty, tourism was brought in as a new EU competence with the aim of boosting the industry.

However, rather predictably, Eurocrats have used the opportunity to exercise their somewhat ‘backward’ understanding of economic theory. Deciding that, rather than stimulating demand for tourism, they will instead create supply. Last month at the European Tourism Stakeholders’ Conference, the Vice-President, Antonio Tajani, announced that “taking holidays is a right”, saying that:

“our unrivalled tourism resources must become fully accessible to those for whom travelling is difficult: the elderly and persons with reduced mobility…young persons and families at a disadvantage who – for various reasons – also face difficulties in exercising their full right to tourism”.

In particular, subsidies would be given for the disadvantaged to travel during the low season to encourage year round tourism flows.

Aside from the economic illiteracy of the ‘initiative’, some may be confused as to why Brussels would champion the right of tourism for all when fighting climate change, through reducing carbon emissions and introducing carbon taxes, is heralded to be a key EU priority. In fact, the EU already pays out for a variety of campaigns urging us to "travel responsibly" such as the You Control Climate Change! and Climate Action schemes.

Of course, this contradictory behaviour is par for the European course. Many will remember the controversial junket taken in March this year when 250 delegates (including 68 members of the European Parliament) jetted off to sunny Tenerife to discuss a variety of issues including the environment and sustainable tourism.