London Briefing: The old children's tale about the emperor with no clothes is all about the inevitable decline of societies and cultures that give up on the facts.

Europe's sad state of affairs - or its "rotten heart" in Bernard Connolly's vivid description - is rooted in a culture that has come to believe in nothing and, therefore, can believe anything it wants to.

The UK is as much a victim of this cultural cancer, with a political class that values spin above all else.

As it happens, the British have an enormous number of facts on their side when it comes to the budget row with French president Jacques Chirac. The existing set-up is a relic of the 1950s agreement that traded the opening up of French markets to German manufactures: the key gift was German taxpayers' money to French farmers.

They have managed to get the proportion of the EU budget taken by the Common Agricultural Policy (Cap) down to 40 per cent but there is still a long way to go.

Agriculture employs 5 per cent of the EU workforce and generates 1.6 per cent of total output. Even after Britain gets its rebate - too many efficient farmers in Britain means relatively few Cap recipients - the UK is still the second-largest net contributor to the EU budget, beaten only by Germany, still effectively paying reparations demanded of it by France in the aftermath of the second World War - itself partly caused by French monetary demands of Germany in the wake of the first World War.

The Cap impoverishes Third World farmers and undoubtedly contributes to poverty, disease and death in many poor countries.

Take one commodity, by way of example. The EU, according to the charity Oxfam, allows poor countries to export a volume of sugar equivalent to 1 per cent of EU consumption. More precisely, 49 of the world's poorest countries are allowed to supply Europe with only three days' worth of sugar consumption.

"When it comes to choosing between reducing poverty in Africa and supporting big farm and industrial interests in Europe, EU governments have made a clear choice... for every $3 [ €2.47] that the EU gives Mozambique in aid, it takes back $1 through restrictions on access to its sugar market... Ethiopia's losses are equivalent to total national spending on programmes to combat HIV/Aids... Malawi's losses exceed the national budget for primary healthcare," Oxfam reported.

And that's just for sugar. The last time I looked, the Cap covered one or two other agricultural markets as well.

To be fair, the EU has at last responded to Oxfam's criticism and moved to reform the sugar regime somewhat.

The British - that unemotional lot - attach as much significance to farmers as they do to car workers and coal miners. Nice to have them, we'll even subsidise them for a while but, if it doesn't work out, we'll say goodbye without shedding a tear.

If change is the one constant we have to accept, then so be it. We are comfortable enough with our own history to remain relatively unattached to it. Jacques Delors, by contrast, once said that, in his heart, every Frenchman is a peasant farmer. That, I suppose, explains everything.

The only surprise is that Bob Geldof hasn't made the Cap a key part of his attack on Third World poverty. Not only does it directly impact on the poor, it stands as a monument to European indifference to other countries.

Incidentally, it also reveals just how much Europe's elite cares about the poor in our own countries: we end up paying an awful lot more for food than we have to. Guess which group of people spend the highest proportion of their income on exorbitantly priced food? Europe's poor and unemployed should be as anti the Cap as any Third World farmer.

If Mr Chirac and Luxembourg's Jean-Claude Junkers (Luxembourg, by way, with the highest EU per capita income, contributes nothing to the EU's coffers) can defend the Cap with a straight face and a clear conscience, it says a lot about their respective electorates.

More generally, if Europe believes that the way to handle the modern world - with all of its complexities, opportunities and threats - is to build barriers, the great European project is finished. Tony Blair, for all his vanity, knows this. Does he stand any chance of getting anyone to listen to a simple recitation of the facts?

Chris Johns is an investment strategist with Collins Stewart. All opinions are personal.