That EU budget – a case of politics running ahead of sound economic thinking?

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It's hard not to take pleasure in Tory disarray: that Cameron is going the way Major did and if anything more quickly than Major ever managed has to be a cause for pleasure. I'm just not quite sure that cutting the EU budget is right though.

Of course there us waste in the EU and the agriculture budget there is also serious fraud. We know that. And we know that CAP reform has defeated generations of politicians, just as the battle on fraud will be lost unless more spending on doing so is allowed. And I know some are using this as an excuse to put pressure on the EU from the left, but right now I don't  buy this.

A seven year budget is about high level decisions on direction as a whole, not individual line numbers. My concern is that sending the message that the EU budget must be cut is simply an endorsement of the blanket thinking that the only way out of recession is by cutting spending.

The IMF have now said that is wrong. The logic that cutting pays is discredited. The IMF now say that the multiplier effect on cuts is that a cut in £1 of spending is now known to create cuts of at least £1.50 in growth.  The left have rightly welcomed that. All serious left of centre thinkers have known this for a long time.

And yet Labour is now calling for cuts in the EU budget that will, therefore, deliver more recession in Europe as night follows day.

I don't for a moment say digging holes for the sake of it and filling them in again makes sense; of course it does not. But arguing, for example, for significant infrastructure and green energy spending within the EU budget, leveraged by incredibly cheap borrowing opportunities, has to be entirely the right thing to do now. Cutting instead makes no sense to me, economically.

This is a case where I fear politics has got ahead of joined up economic thinking.

It was right to oppose Cameron's policies. That I agree with. But arguing for overall cuts in the EU budget, especially when much of that will fall on already hard hit regions, seems illogical.