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Monday, November 10, 2008
The Scandal of the EU's Accounts
For the 14th year in a row the Court of Auditors has failed to approve the European Union's accounts. I suppose no one will be very surprised by this, but it really is an absolute scandal. Perhaps if one of the major net contributors to the EU threatened to withhold its cash unless the EU puts its house in order, something might change. Or then again, perhaps not. The European Parliament can huff and puff but it seems incapable to getting the Commission to take the necessary action.
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43 comments:
The European Union and the EU Commission draws upon its LEGAL BASIS on budgetary maters from Article 268 to 280 of the EC Treaty. As the European Union has not performed or been in legal compliance for 14 years we should now withdraw from the European Union using the provision of Article 61 of the Vienna Convention on the Law of Treaties
Article 61 Supervening impossibility of performance
A party may invoke the impossibility of performing a treaty as a ground for terminating or withdrawing from it if the impossibility results from the permanent disappearance or destruction of an object indispensable for the execution of the treaty. If the impossibility is temporary, it may be invoked only as a ground for suspending the operation of the treaty.
14 years of non compliance feels fairly permanent to me.
3rd sentence makes no sense
You're right. It does now though!
The EU Parliament and MEP's have no power whatsoever to block or even ammend any legislation the unelected unnacountable EU "Commisioners" come up with, MEP's just talk, its an illusion of Democracy.
The EU is a Dictatorship, one which we are paying £2million per HOUR for them to destroy this country and take over and rule whats left, broken up into nice little bite size "Regions" of course.
England will never ever recover while its a member of the EU, so look forward to the country going downhill for the foreseebale future, or for good if we dont get out, one things for sure, Broon and McLabour will never get us out of the EU, because they are working for them.
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The European Union is democratically controlled
http://eureferendum.blogspot.com/2004/06/myth-of-week.html
http://eureferendum.blogspot.com/2004/08/myth-of-week.html
Nothing to see here - move along.
You should look at this a little more closely Iain. A lot of the non-compliance originates from the member states, ourselves included.
You needed one more sentence on the end of that blog entry Iain. "It's time for Britain to withdraw from this unreformable mess".
Of course you, unfortunately, seem to share the sentiment of the majority of Tories that we can somehow "get a better deal from within". Or perhaps they just say that because they haven't got the backbone to risk their cosy careers? Wankers.
I am with anoneumouse and anonymous at 508. This is a corrupt, anti democratic organisation. We, the British People have never given our authority for any government to accept all the changes since the only referendum and the only agreement of the people was for a Common Market!
That we belong to such a corrupt organisation which is, as anonymous points out, is hell bent on breaking up this country.
Like the sudden collapse of the banking system so will come the day when this undemocratic system will crumble and god help those politicians of all parties that have led this country, without authority, into this stinking organisation.
Iain, each year this happens. Each year we get the same reaction yet the conservative party accept it.
WHY?
Pigs and trough, trough and pigs! Plus ça change mon brave!
F*****g disgrace!
For Strapworld. Because they're a bunch of corrupt tossers like all the other politicians. Unfortunately (and I mean that) Macaroon is no better than the rest of 'em.
It doesn't matter where the non-compliance originates. The Fraud Act 2006 introduces several general offences of fraud which may be committed by a person or persons who:
makes a false representation
fails to disclose information when he is under a legal duty to do so;
abuses a position of trust
When it comes to the EU Budget...The EU Commission is under a legal duty to do so
Of course the Parliament cannot get the Commission to do anything. That would be the tail wagging the dog.
Until we sort out our sovereignty issues, Nation States will just be fleas upon that tail.
And the accounts were last "signed off" when?
Why don't the Tories just have the guts to advocate withdrawal?
You talk the talk on this, but if & when you're in you'll just go along with it, like Thatcher and Major did.
ooh yes lets get excited and judgemental about the eu. oh no... that's right the reasson why the accounts can't be signed off is due to member states not the commission... oh what a same... nevermind there's always that one about imperial measurements, metric dictators! whose with me?!!!
But the Commission and the other EU institutions have been told this year (for the first time) that there accounting is fine - it's just the records of the underlying transactions arent' up to scratch. And which country is in the top four for having to give money back after failing to account for it - er, us.
Graybo is right - other Member states don't look after the money with a degree of care that we would look after it or hope that they should look after it. The Commission should stop giving money to these countries but the Council always lets them get away with it.
Iain!
How dare you cast aspersions about the great, powerful & all knowing EU!
They OWN us & our little island, we pay millions each day just for the privilege of being owned, told what we can & can’t do, told what we can & can’t think, & having the EU rule over us must be just what our grandfathers died for, don’t you think??
How very dare you even think that our wonderful EU master would spend a penny Um! Euro! In the wrong place!!
Goodness me, you’d think we’d had no say in being owned what so ever!
Just think of all the freedom & security we’d be missing if we wasn’t owned by the EU, think how horrible it would be to have to make decisions that affect our own people in our own country, dreadful just dreadful, what about that warm insular feeling you get from being a member of the EU & the protection we get from corruption, blimey will the good times never end?
If bankrupting Britain, turning the British people into Europeans instead of being British & dividing this once great nation into abstract regions is what being part of the EU is all about then who are we to say different???????!!!!!!!!
Glad that others have picked up on the fact that the problem is in member states accounting for the money the EU gives them.
Also worth asking just how robust the accounts of UK government departments are - doesn't take much digging to find out that they're not. The uselessness of the NAO doesn't help.
Whether or not the EU is a good idea is of course a separate question - and my opinion is, notwithstanding the above, that it is a good idea in theory (the trading block bit anyway) which has been badly executed. It could be a lot worse though, I reckon...
If this is a scandal, why doesn't some one do something about it?
I think it's because they've all taken their 30 pieces of silver, but I'm not one of those trusted politicians.What do I know. All I've got is useless vote because it changes nothing.
Q: Which political party took us into the EU?
A: The Tories
Q: Which political party would take us out of the EU?
A: UKIP
That's why I will vote for UKIP!
Fabian Political Officers in schools
"Perhaps if one of the major net contributors to the EU threatened to withhold its cash unless the EU puts its house in order, something might change."
The Conservatives under Dave wouldn't even do that. (Though I must admit that the only change that would satisfy me is to get out.)
All this tripe that it is the fault of the member states is a red herring. The rules are quite clear...the commission are responsible
Its called solemn treaty obligations
FINANCIAL PROVISIONS
Article 268
All items of revenue and expenditure of the Community, including those relating to the European Social Fund, shall be included in estimates to be drawn up for each financial year and shall be shown in the budget.
Administrative expenditure occasioned for the institutions by the provisions of the Treaty on European Union relating to common foreign and security policy and to cooperation in the fields of justice and home affairs shall be charged to the budget. The operational expenditure occasioned by the implementation of the said provisions may, under the conditions referred to therein, be charged to the budget.
The revenue and expenditure shown in the budget shall be in balance.
Article 269
Without prejudice to other revenue, the budget shall be financed wholly from own resources.
The Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament, shall lay down provisions relating to the system of own resources of the Community, which it shall recommend to the Member States for adoption in accordance with their respective constitutional requirements.
Article 270
With a view to maintaining budgetary discipline, the Commission shall not make any proposal for a Community act, or alter its proposals, or adopt any implementing measure which is likely to have appreciable implications for the budget without providing the assurance that that proposal or that measure is capable of being financed within the limit of the Community's own resources arising under provisions laid down by the Council pursuant to Article 269.
Article 271
The expenditure shown in the budget shall be authorised for one financial year, unless the regulations made pursuant to Article 279 provide otherwise.
In accordance with conditions to be laid down pursuant to Article 279, any appropriations, other than those relating to staff expenditure, that are unexpended at the end of the financial year may be carried forward to the next financial year only.
Appropriations shall be classified under different chapters grouping items of expenditure according to their nature or purpose and subdivided, as far as may be necessary, in accordance with the regulations made pursuant to Article 279.
The expenditure of the European Parliament, the Council, the Commission and the Court of Justice shall be set out in separate parts of the budget, without prejudice to special arrangements for certain common items of expenditure.
Article 272
1. The financial year shall run from 1 January to 31 December.
2. Each institution of the Community shall, before 1 July, draw up estimates of its expenditure. The Commission shall consolidate these estimates in a preliminary draft budget. It shall attach thereto an opinion which may contain different estimates.
The preliminary draft budget shall contain an estimate of revenue and an estimate of expenditure.
3. The Commission shall place the preliminary draft budget before the Council not later than 1 September of the year preceding that in which the budget is to be implemented.
The Council shall consult the Commission and, where appropriate, the other institutions concerned whenever it intends to depart from the preliminary draft budget.
The Council, acting by a qualified majority, shall establish the draft budget and forward it to the European Parliament.
4. The draft budget shall be placed before the European Parliament not later than 5 October of the year preceding that in which the budget is to be implemented.
The European Parliament shall have the right to amend the draft budget, acting by a majority of its Members, and to propose to the Council, acting by an absolute majority of the votes cast, modifications to the draft budget relating to expenditure necessarily resulting from this Treaty or from acts adopted in accordance therewith.
If, within 45 days of the draft budget being placed before it, the European Parliament has given its approval, the budget shall stand as finally adopted. If within this period the European Parliament has not amended the draft budget nor proposed any modifications thereto, the budget shall be deemed to be finally adopted.
If within this period the European Parliament has adopted amendments or proposed modifications, the draft budget together with the amendments or proposed modifications shall be forwarded to the Council.
5. After discussing the draft budget with the Commission and, where appropriate, with the other institutions concerned, the Council shall act under the following conditions:
(a)
the Council may, acting by a qualified majority, modify any of the amendments adopted by the European Parliament;
(b)
with regard to the proposed modifications:
-
where a modification proposed by the European Parliament does not have the effect of increasing the total amount of the expenditure of an institution, owing in particular to the fact that the increase in expenditure which it would involve would be expressly compensated by one or more proposed modifications correspondingly reducing expenditure, the Council may, acting by a qualified majority, reject the proposed modification. In the absence of a decision to reject it, the proposed modification shall stand as accepted,
-
where a modification proposed by the European Parliament has the effect of increasing the total amount of the expenditure of an institution, the Council may, acting by a qualified majority, accept this proposed modification. In the absence of a decision to accept it, the proposed modification shall stand as rejected,
-
where, pursuant to one of the two preceding subparagraphs, the Council has rejected a proposed modification, it may, acting by a qualified majority, either retain the amount shown in the draft budget or fix another amount.
The draft budget shall be modified on the basis of the proposed modifications accepted by the Council.
If, within 15 days of the draft being placed before it, the Council has not modified any of the amendments adopted by the European Parliament and if the modifications proposed by the latter have been accepted, the budget shall be deemed to be finally adopted. The Council shall inform the European Parliament that it has not modified any of the amendments and that the proposed modifications have been accepted.
If within this period the Council has modified one or more of the amendments adopted by the European Parliament or if the modifications proposed by the latter have been rejected or modified, the modified draft budget shall again be forwarded to the European Parliament. The Council shall inform the European Parliament of the results of its deliberations.
6. Within 15 days of the draft budget being placed before it, the European Parliament, which shall have been notified of the action taken on its proposed modifications, may, acting by a majority of its Members and three fifths of the votes cast, amend or reject the modifications to its amendments made by the Council and shall adopt the budget accordingly. If within this period the European Parliament has not acted, the budget shall be deemed to be finally adopted.
7. When the procedure provided for in this Article has been completed, the President of the European Parliament shall declare that the budget has been finally adopted.
8. However, the European Parliament, acting by a majority of its Members and two thirds of the votes cast, may, if there are important reasons, reject the draft budget and ask for a new draft to be submitted to it.
9. A maximum rate of increase in relation to the expenditure of the same type to be incurred during the current year shall be fixed annually for the total expenditure other than that necessarily resulting from this Treaty or from acts adopted in accordance therewith.
The Commission shall, after consulting the Economic Policy Committee, declare what this maximum rate is as it results from:
-
the trend, in terms of volume, of the gross national product within the Community,
-
the average variation in the budgets of the Member States,
and
-
the trend of the cost of living during the preceding financial year.
The maximum rate shall be communicated, before 1 May, to all the institutions of the Community. The latter shall be required to conform to this during the budgetary procedure, subject to the provisions of the fourth and fifth subparagraphs of this paragraph.
If, in respect of expenditure other than that necessarily resulting from this Treaty or from acts adopted in accordance therewith, the actual rate of increase in the draft budget established by the Council is over half the maximum rate, the European Parliament may, exercising its right of amendment, further increase the total amount of that expenditure to a limit not exceeding half the maximum rate.
Where the European Parliament, the Council or the Commission consider that the activities of the Communities require that the rate determined according to the procedure laid down in this paragraph should be exceeded, another rate may be fixed by agreement between the Council, acting by a qualified majority, and the European Parliament, acting by a majority of its Members and three fifths of the votes cast.
10. Each institution shall exercise the powers conferred upon it by this article, with due regard for the provisions of the Treaty and for acts adopted in accordance therewith, in particular those relating to the Communities' own resources and to the balance between revenue and expenditure.
Article 273
If, at the beginning of a financial year, the budget has not yet been voted, a sum equivalent to not more than one twelfth of the budget appropriations for the preceding financial year may be spent each month in respect of any chapter or other subdivision of the budget in accordance with the provisions of the Regulations made pursuant to Article 279; this arrangement shall not, however, have the effect of placing at the disposal of the Commission appropriations in excess of one twelfth of those provided for in the draft budget in course of preparation.
The Council may, acting by a qualified majority, provided that the other conditions laid down in the first subparagraph are observed, authorise expenditure in excess of one twelfth.
If the decision relates to expenditure which does not necessarily result from this Treaty or from acts adopted in accordance therewith, the Council shall forward it immediately to the European Parliament; within 30 days the European Parliament, acting by a majority of its Members and three fifths of the votes cast, may adopt a different decision on the expenditure in excess of the one twelfth referred to in the first subparagraph. This part of the decision of the Council shall be suspended until the European Parliament has taken its decision. If within the said period the European Parliament has not taken a decision which differs from the decision of the Council, the latter shall be deemed to be finally adopted.
The decisions referred to in the second and third subparagraphs shall lay down the necessary measures relating to resources to ensure application of this Article.
Article 274
The Commission shall implement the budget, in accordance with the provisions of the regulations made pursuant to Article 279, on its own responsibility and within the limits of the appropriations, having regard to the principles of sound financial management. Member States shall cooperate with the Commission to ensure that the appropriations are used in accordance with the principles of sound financial management.
The regulations shall lay down detailed rules for each institution concerning its part in effecting its own expenditure.
Within the budget, the Commission may, subject to the limits and conditions laid down in the regulations made pursuant to Article 279, transfer appropriations from one chapter to another or from one subdivision to another.
Article 275
The Commission shall submit annually to the Council and to the European Parliament the accounts of the preceding financial year relating to the implementation of the budget. The Commission shall also forward to them a financial statement of the assets and liabilities of the Community.
Article 276
1. The European Parliament, acting on a recommendation from the Council which shall act by a qualified majority, shall give a discharge to the Commission in respect of the implementation of the budget. To this end, the Council and the European Parliament in turn shall examine the accounts and the financial statement referred to in Article 275, the annual report by the Court of Auditors together with the replies of the institutions under audit to the observations of the Court of Auditors, the statement of assurance referred to in Article 248(1), second subparagraph and any relevant special reports by the Court of Auditors.
2. Before giving a discharge to the Commission, or for any other purpose in connection with the exercise of its powers over the implementation of the budget, the European Parliament may ask to hear the Commission give evidence with regard to the execution of expenditure or the operation of financial control systems. The Commission shall submit any necessary information to the European Parliament at the latter's request.
3. The Commission shall take all appropriate steps to act on the observations in the decisions giving discharge and on other observations by the European Parliament relating to the execution of expenditure, as well as on comments accompanying the recommendations on discharge adopted by the Council.
At the request of the European Parliament or the Council, the Commission shall report on the measures taken in the light of these observations and comments and in particular on the instructions given to the departments which are responsible for the implementation of the budget. These reports shall also be forwarded to the Court of Auditors.
Article 277
The budget shall be drawn up in the unit of account determined in accordance with the provisions of the regulations made pursuant to Article 279.
Article 278
The Commission may, provided it notifies the competent authorities of the Member States concerned, transfer into the currency of one of the Member States its holdings in the currency of another Member State, to the extent necessary to enable them to be used for purposes which come within the scope of this Treaty. The Commission shall as far as possible avoid making such transfers if it possesses cash or liquid assets in the currencies which it needs.
The Commission shall deal with each Member State through the authority designated by the State concerned. In carrying out financial operations the Commission shall employ the services of the bank of issue of the Member State concerned or of any other financial institution approved by that State.
Article 279(50)
1. The Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament and obtaining the opinion of the Court of Auditors, shall:
(a)
make Financial Regulations specifying in particular the procedure to be adopted for establishing and implementing the budget and for presenting and auditing accounts;
(b)
lay down rules concerning the responsibility of financial controllers, authorising officers and accounting officers, and concerning appropriate arrangements for inspection.
From 1 January 2007, the Council shall act by a qualified majority on a proposal from the Commission and after consulting the European Parliament and obtaining the opinion of the Court of Auditors.
2. The Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament and obtaining the opinion of the Court of Auditors, shall determine the methods and procedure whereby the budget revenue provided under the arrangements relating to the Community's own resources shall be made available to the Commission, and determine the measures to be applied, if need be, to meet cash requirements.
Article 280
1. The Community and the Member States shall counter fraud and any other illegal activities affecting the financial interests of the Community through measures to be taken in accordance with this article, which shall act as a deterrent and be such as to afford effective protection in the Member States.
2. Member States shall take the same measures to counter fraud affecting the financial interests of the Community as they take to counter fraud affecting their own financial interests.
3. Without prejudice to other provisions of this Treaty, the Member States shall coordinate their action aimed at protecting the financial interests of the Community against fraud. To this end they shall organise, together with the Commission, close and regular cooperation between the competent authorities.
4. The Council, acting in accordance with the procedure referred to in Article 251, after consulting the Court of Auditors, shall adopt the necessary measures in the fields of the prevention of and fight against fraud affecting the financial interests of the Community with a view to affording effective and equivalent protection in the Member States. These measures shall not concern the application of national criminal law or the national administration of justice.
5. The Commission, in cooperation with Member States, shall each year submit to the European Parliament and to the Council a report on the measures taken for the implementation of this article.
I wonder why it is that everyone, and I mean everyone, I talk to regarding the Common Market/EEC/EU/call it what you will thinks that we made a huge mistake in going in to it.
Of course, what they fail to remember is that Ted Heath lied through his teeth to get us into it.
I wonder why our present leaders are so keen on this pile of shit.
arrrrh yes.
Another anti EU rant.. the slow match to the rifgt continues at a pace...YAWN
NOT talking about Cambos big Tax day tomorrow. Oh dear..I wonder if Gideon will make the announcment...err nope.
Stimulate the economy by giving millionaires a tax and Inheritant Tax break...oh dear
The lights will be burning brightly in Tory HQ tonight. Past 24 hours jumbling a Tax plan together on the hoof..oh dear
@arkangel... it's probably because all your friends are anti-European. The reverse of what you say is true in my case. The difference is that I understand the difference between evidence and anecdote.
And of course, in another wonderful display of one rule for them and another for us, if you are a private company and file your accounts, this year the time scale for filing is one month less and the tax- oops sorry, fine, is 50% more...
Anoneumouse thanks for the large Treaty quote. Can't be bothered to read it all just now but perhaps you could say precisely which part of that have the Commision failed to do?
anon - 10/11 9:10pm
"The difference is that I understand the difference between evidence and anecdote."
But do you understand the difference between "anti european" and "anti EU"?
Why was the BBC reporting on PM that the accounts had been approved for the first time in 14 years?
I admit it was a heavily qualified "Aproved", but Mardell was adament they had been approved.
Twig wrote
"Q: Which political party would take us out of the EU?
A: UKIP
That's why I will vote for UKIP!"
Just one problem. UKIP won't get elected anyway. And if the Tories really want to lose the next election they will allow EU issues to divide the party and provide opportunities for Labour to mount deadly attacks.
I fancy most Tories, though not all by any means, dearly want out. Unfortunately there aren't enough votes in the issue, yet, which is why the UKIP message hasn't resulted in lots of MPs.
I doubt a 'big bang' withdrawal would really be feasible, there just don't seem to be enough votes in it. Effectively Britain was salami-sliced into a dire situation and the most probable way out would salami slicing in the opposite direction, using carefully chosen small measures which command strong public support.
Whatever EU courts may say, the EU currently has no army to enforce its will, fortunately.
If we really are net contributors, economic sanctions would probably harm the rest of the EU more than UK. However since the last 10 years don't seem to have done the UK economy many favours, we may no longer be in such a strong position (cue for conspiracy theorists to sound off).
What a wretched mess, thank you so much Sir Edward!
Interesting that the eurosceptics are determined to ignore the point - the EU gives the money out to member states, who then fail to account for it in a way that the European auditors find acceptable. Why? Presumably because the accountability falls down the cracks between Europe and the national authorities - the national parliaments aren't bothered, since it's the EU's money, and the Commission doesn't have the teeth to make national governments behave (though they can, and do, ask for the money back).
Either that, or it's plain old corruption - take the EU's money and throw it at areas where you'd like to buy some votes. Couldn't happen here of course.
People who oppose the EU might want to consider the irony of doing so in this of all weeks, or indeed, the irony of the fact that both the big parties pretend to be eurosceptics and to give it the big one when they go over to Brussels, yet hell will freeze over before they pull us out.
The way things are going economically, it surely won't be long before we're asking the EU for extra handouts.
Really weird that the Europhiles say that its ok because the EU gives money to bodis that don't account for it properly - does that apply to everyone?
I don't thnk so. Try it with HMRC - you justify your expense claim by saying you gave some money to a bloke on the train for something you needed but can't quite remember what it was. Yeah right...
Crikey Iain, look what you've started - the Euro-bores are out in force now!
Do you actually understand what is going on here Iain? Or are you a bendy cucumber, straight banana, EU will make a loaf of bread £5 merchant?
Graybo 5:17 makes an excellent point. And others could be made along similar lines. You should concult a decent non-partisan accountant/auditor and slice and dice anoneumouse's tired recitations once and for all.
Is it possible for these accounts to be so-called "approved" by this "Court of Auditors"? If it is possible is it useful, desirable, necessary? Apart from in terms of stopping the baying pack.
Or to be fair braying is more like it. Drop the Dead Donkey there's a good chap.
Delighted to hear that Dave is "looking fit". Stick to that stuff. You know about that.
Suspend payments to the EU, that's £20bn (net) a year saved.
Scrap ID cards, that's £12bn saved.
Austerity Olympics, that's £5bn saved.
Scrap half the Quangos, that's £0.5bn saved.
I've not even started on cutting public services waste.
Soon mounts up doesn't it? And no front line services affected.
"I wonder why it is that everyone, and I mean everyone, I talk to regarding the Common Market/EEC/EU/call it what you will thinks that we made a huge mistake in going in to it.
Of course, what they fail to remember is that Ted Heath lied through his teeth to get us into it.
I wonder why our present leaders are so keen on this pile of shit."
Hear, hear.
Talking of Dave, I saw him on TV last night. He did indeed look fit, and very worried. Bring back Michael Howard.
EFTA - simple.
This is nonsense. It was clearly stated yesterday by the president of the Court of Auditors, and is there in black and white in the Court's report, (OJ C 286/ 10 /11/08)that the accounts are fair and true.
The problem relates to "underlying transactions" involving national administrations, where the Court cannot give a guarantee that those transactions by non EU agencies are regular.
But this sets the bar higher than say any audit court at national level does and creates a virtually impossible level of assurance to reach.
In any case the underlying rate of irregularity in transactons, which is a different thing from fraud is between 2% and 5% except in Commission admin expenditure where it is 0%. anyone does not believe me, please refer to Court's annual report, ref. given above.
On the Europarl powers; it can amend and reject legislation under the co decision procedure( Maastrichct and Amsterdam Treaties) and has been doing so for nearly ten years.
Anoneumouse confuses
1 the procedure for adopting the budget
and
2 the procedure for control and discharge of the budget.
Most of the mismanagement is at member state level. If you really want to stop that you have to beeef up the Commission and ive it more direct, intervention and control powers. Possible with eurosceptics caling the media shots? No.
De deux choses une; as thay say here.
Anonymous said...
@arkangel... it's probably because all your friends are anti-European. The reverse of what you say is true in my case. The difference is that I understand the difference between evidence and anecdote.
November 10, 2008 9:10 PM
If you'd bothered to read my post carefully, you would have seen that I said 'everyone' not friends.
And, I should have thought that the views of people are evidence and not anecdotes
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