by Calculated Risk on 6/17/2005 09:04:00 PM

Financial Times: EU crisis as Britain rejects deal on budget

Excerpt:

The European Union was plunged into political crisis on Friday night after Britain led the way in blocking a proposed deal on the new seven-year budget.

Tony Blair, the UK prime minister, was one of a minority of leaders who refused to accept a compromise package, as the Brussels summit collapsed in acrimony shortly before midnight. The failure of the talks means the transfer of billions of euros of aid to former communist countries in eastern Europe, due to start on January 1 2007, may be delayed.

The political ramifications of the breakdown, coming after French and Dutch voters rejected the EU constitution, could be severe.

This is another serious setback for the EU and is not good for America. A European Union in disarray and possibly entering recession will likely exacerbate the global imbalances and probably lead to larger US trade and current account deficits.

See Dr. Serser's 6.4% of GDP current account deficit in q1

General Glut's 6.4% AND GROWING

See Dr. Altig's The EU Divide and more.