David Cameron holds talks with German Chancellor Angela Merkel at Downing Street less than three weeks before a crunch summit on the EU budget.

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The prime minister is pushing for a real-terms freeze in the EU budget, following his defeat in the Commons last week on the issue.

Before his meeting with Mrs Merkel, who believes an increase is inevitable, Mr Cameron attacked European Commission proposals for a 100bn euro increase as "completely ludicrous" .

He said he did not have "high hopes" of achieving a deal between all 27 member states at the Brussels summit, meaning he could veto the budget.

The meeting coincides with a warning from the European Commission that there will be negligible growth in the eurozone in 2013. The commission expects growth of just 0.1 per cent, having previously forecast a rise of 1 per cent.

Tory rebellion

In the Commons last week, Conservative Euro-sceptics joined forces with Labour MPs by voting for a real-terms cut in the EU budget. But Mr Cameron said that although he would prefer this, it was not going to happen.

Mrs Merkel was among European leaders to sign a letter in 2010 backing a real-terms freeze and the prime minister said he believed "everyone who signed that letter should stick to that letter".

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He added: "I have always wanted at best a cut, at worst a freeze. I feel I am in there fighting for Europe's taxpayers, particularly British taxpayers.

"So I will make very robust and strong arguments about that. I think if you see what's happened in Europe since 2010, deficits and debt levels overall have got worse rather than better, so I think the arguments we made then are even more powerful today."

Anger

Mr Cameron's stance on Europe is causing anger in Germany, where there is a belief that Britain could end up leaving the EU.

The prime minister said he was looking forward to "frank" discussions with the German chancellor, including making it clear that members of the single currency should bear the costs of the eurozone crisis.

He said that when he travelled to the summit, he would not agree "to a future financial framework that isn't in Britain's interests".

'Completely ludicrous'

He added: "One of the things that is so notable about the commission proposal is not only that they are proposing a completely ludicrous 100bn euro increase in the European budget, but they are also not proposing to make any cuts to the central administrative costs. Every other country in Europe has had to take difficult decisions."

Shadow foreign secretary Douglas Alexander said: "Parliament has given him a mandate to push for a real-terms cut in the EU budget and that is what he should focus on at today's meeting with Chancellor Merkel.

"Unfortunately, David Cameron's threatening of vetos before talks have even begun will mean today's dinner will likely be spent trying to patch things up instead of really moving things forward."

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