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Brussels bubble that is immune to crisis in EU

THEY sit like rotten teeth in an otherwise perfect smile.

Driving up the coast of Spain you see them dotted on the hillsides, the half finished hotels and apartments. Stop for a walk in any town and for sale signs are posted in many windows. The dream of a home in the sun, a home anywhere, gone.

This is the EU crisis as expressed in bricks and mortar. In Brussels this week the crisis is assuming different forms, be it David Cameron's palpable anxiety about securing a deal that will satisfy his party, or Francois Hollande's increasingly sweaty pallor. If you had an economy like France's you'd look rattled too.

Viewed from the relatively serene shores of the UK, it is possible to regard the troubles in the EU as remote. We see the demonstrations on the news, Madrid at a standstill, Paris in uproar, Athens drenched in tear gas, yet it only makes a dent in our collective consciousness. And anyway, aren't these demonstrations whipped up by trade union movements eager to protect their lavish benefits while the private sector suffers?

Forget all that jabber about the internet age making us all citizens of one big global village, able to connect on so many levels. It is not until you see that forest of for sale signs that one realises the crisis in the EU, though it centres around a currency, is a very human, intensely personal, one.

Spain bet the farm on the housing boom going on forever and lost – big time. There are now up to one million new homes sitting unsold. Of these, more than 300,000 are on the coast, bought as places to retire to or have as a holiday home. Buyers, many British, who made it as far as moving in are now living in assets depreciating faster than night falls. No-one is buying, either at home or abroad. With unemployment hitting levels of 26%, it is a lucky family that doesn't have to worry about paying the mortgage every month.

In response, the Spanish government is coming up with ideas to break the log jam. One scheme being proposed is a "residency for homes" deal. Any foreigner buying a property for more than £129,000 would be granted residency, allowing them to travel freely within the Schengen zone. Residency does not confer the right to live and work in the EU, but the fear is that it can only be a matter of time, especially if no buyers come forward. The likeliest sales will come from Russia and China.

If successful – and similar schemes are already in operation in Ireland and Portugal – it could lead to a mini wave of immigration of the kind western European governments see as good. Poverty stricken and desperate? Keep walking. Rich and mildly bored? Come on in, the water is lovely.

Little wonder there is a tussle in Brussels as the EU begins the process of trying to agree a budget for 2014-20. Mr Cameron, courtesy of his party's Eurosceptic tendency, doesn't so much enter the negotiating chamber naked as with a dirty great millstone around his neck. Given what is going on in their countries, the likes of Spain, Greece and Portugal could not care less about Mr Cameron's political woes. A little local embarrassment is nothing when set against the mortification of a bailout and Red Cross food parcels.

But Mr Cameron must fight on and fight to win, lest he suffer the same fate as the woman who last made that pledge. Sceptics want him to "do a Thatcher", and tell Johnny Foreigner they will not put up with any budget increase or change to the UK rebate. A spot of cross-dressing, no less, is required. According to Boris Johnson, currently London mayor and the closest the party has to a replacement for the Prime Minister: "It is time for David Cameron to put on that pineapple-coloured wig and powder-blue suit, whirl his handbag round his head and bring it crashing to the table with the words: 'No, non, nein.'"

No matter the current crop of EU leaders don't blink when faced with a UK temper tantrum (can one imagine Mrs Thatcher taking on Frau Merkel today?). No matter that, as so often with the EU, the real crisis is being ignored as leaders strut and fret their hour upon the Brussels stage.

Spain, albeit painfully slowly, is on the way back. Spain's exports are up by almost one-quarter from three years ago. One crucial market is China; another reason to welcome Chinese buyers into the property market. Deficits are heading downwards at last. There are similarly hopeful signs in Ireland and Portugal. Though it will be a long time before this pick-up begins to show itself in GDP growth and rising employment, a corner of sorts has been turned.

It will all be for naught, though, if France does not get its house in order. If you ever feel the need to be wildly cheery about the UK economy, take a look at some of the nasty stats buzzing round France like so many flies on a dungheap. Public debt at 90% of GDP, state spending gobbling up 57% of GDP, youth unemployment at 25%. While no-one would dare claim the world's fifth-biggest economy is about to become the next Greece, France increasingly appears like a country in a dither. And markets hate dither.

The EU is showing itself as slow to react to what is happening in France as it has been with countries elsewhere. It is as if the EU is a time zone all in itself, a place that lags months if not years behind the world in which it exists. If it was in any way serious about pleasing the populations it professes to serve it would cut where cuts are due, the shuffle of the European Parliament from Brussels to Strasbourg being the most obvious and grotesque waste of money.

Whatever else emerges from Brussels, that won't happen. What will occur is that the democratic deficit, that gap between the EU governed and the governors, will widen further. The talk today will be of bartering percentage points here and there so most leaders can go home with something, but the big questions, what the EU is for, how it can deliver and where it is going, are as far from being answered, as ever. As Mrs Thatcher would say, and more and more of us are beginning to agree, this EU, their EU, isn't working.

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