Benes and all that
There are occasions when you can't help wondering whether the EU knows what it is taking on, as it prepares to admit ten new members, mainly from central Europe. Take the current row over the Benes decrees-the Czechoslovak laws which led to the expulsion of 2.5m Germans and thousands of ethnic Hungarians from the Sudetenland after the war. Just as the accession of the Czech Republic and Slovakia to the EU seems within grasp, the Austrian chancellor Wolfgang Schussel, the (former?) Hungarian prime minister Viktor Orban, and the chief of staff of Edmund Stoiber, the right's candidate for chancellor of Germany, have all called into question the legality of the Benes decrees under EU law. How, they argue, can a country join the EU, if it still has a law on its books based on the expropriation of property and ethnic cleansing? A reasonable enough question, if you put aside the small matter of the second world war. The Czech response has been furious. Milos Zeman, the country's prime minister, commented that the deportees were lucky not to have been shot as traitors. The EU officials caught up in the middle of all this are a mite bemused-for many of them, it seems, the Sudetenland remains a faraway land of which they know nothing. As it happens, your correspondent was at a recent dinner with the EU official whose job it is to rule on the legality, under European law, of the Benes decrees. Musing aloud, the man commented that it was difficult to understand the politics behind the row. This prompted an intervention from an Austrian journalist at the table, who remarked that the politics were in fact very simple-the far right in Austria, led by J?rg Haider, had put the issue on the table as a way of trying to block EU enlargement and to make the point that ethnic Germans had also been the victims of injustices in the 1940s. With this, a light went on in the head of the EU lawyer-"So you mean," he said, "that the politically correct thing to say is that the Benes decrees are fine." But will politically correct and legally correct be one and the same? The commission is still thinking about it.
Tax harmonisation: a clever ruse
If there is one phrase guaranteed to make the blood of a British official run cold, it is "tax harmonisation." The Brits know that it is political poison at home, and they also believe that it is an unwarranted effort by other Europeans-well, alright, the French-to impose their own inefficiencies and crazy tax burdens on the lean, mean fighting machine that is the British economy. The Brits are distinctly unamused, therefore, at the repeated French and German suggestions that a minimum corporate tax rate should be agreed across the EU. But this phobia ignores the fact that after recent cuts in corporation tax across Europe, the level of tax on corporate profits in Britain is not much lower than in France and is actually higher than Germany. According to Invest·UK, Britain's basic rate of corporation tax is now 30 per cent compared to 35 per cent in France and a 25 per cent rate which the Germans are planning to introduce. Talk to French investors who have set up in Britain, and you will discover that the really telling difference lies in the different level of social charges. According to one expatriate French boss, the thing that really struck him when he decided to make the move to Ashford, is that National Insurance adds only about 11 per cent to an employer's wage costs in Britain (although it may just have risen); while payroll taxes in France and Germany add almost 30 per cent to the wage bill. That is because the French and Germans fund their health and social-security systems through these payroll taxes. So what is the moral of this story? That it might actually be in British interests to agree to a EU-wide minimum corporate tax rate. This would at a stroke disarm the persistent French charge that the British are undermining the European social model while in reality doing little to change the fact that businesses in Britain can be sure of paying lower taxes than in France.
Is Brussels full of shit?
Justin Webb, the BBC's departing Brussels correspondent, has set off a minor row in Brussels with his departing dispatch for "From our own correspondent." Starting with a vision of a dog crapping on his doorstep, Webb went on to portray Brussels as a grey, depressing and filthy city, peopled by demoralised, uncooperative slugs (I paraphrase). Perhaps unsurprisingly, this slightly negative take on the European capital caused outrage. The Belgians seem to be confirmed in their opinion-widely held around the world-that the British are a bunch of snooty bastards, who spend their time sneering at foreigners. And even foreign residents of the city seem to object to the fact that it has been portrayed as-literally-a shit-hole; they have weighed in to list Brussels's many virtues. It is not for me to intervene in this unedifying dispute between the charming Mr Webb and the (in my view) equally charming city of Brussels. However, the Webb residence in London is located in Camberwell. Frankly, I cannot think of anywhere in Brussels that can compete with the accumulated dog-shit, discarded crisp packets and general filth of Camberwell Green. Perhaps that is why Webb has chosen to move to Washington DC, rather than home to south London. Now Georgetown is nice-if you can put out of your mind that unfortunate incident when the staff of the local Starbucks were gunned down. n
