28 Oct 2010

David Cameron wins budget backing from EU leaders


David Cameron wins support from fellow European leaders to restrict a planned increase in the EU’s budget to less than three per cent. Cathy Newman is in Brussels.

The Prime Minister arrived in Brussels ready to agree that the £107bn budget should increase by 2.9 per cent in 2011, despite previous British demands that it should not rise at all.

He said alternative plans – for a six per cent increase in the EU budget – were not acceptable.

“It’s unacceptable at a time when European countries are taking tough decisions on their budgets and having to cut departments.” he told reporters. “It’s completely wrong European institutions should be spending more money on themselves in the way they propose.”

The UK’s contribution could grow by more than £400m, despite heavy spending cuts being implemented across Whitehall in the next four years.

And tonight it emerged that both France and Germany would support the 2.9 per cent rise.

A statement signed by 11 of the biggest EU member states, including the UK, said it was important that the Union “takes the necessary steps to ensure that we have robust systems that allow us to support the substantial deficit and debt reduction strategies now in place in Member States under the Stability and Growth Pact.”

It added: “This discussion will take place against the backdrop of proposals from the Commission and the European Parliament for an increase in EU budget spending of around 6 per cent in 2011. These proposals are especially unacceptable at a time when we are having to take difficult decisions at national level to control public expenditure.

“The Council has proposed an increase in EU budget spending of 2.91% for 2011. We are clear that we cannot accept any more than this.”

Telephone pleas

The Prime Minister spoke to the German Chancellor Angela Merkel, French President Nicolas Sarkozy and European Council President Herman Van Rompuy last night, as he prepared to attend today’s EU summit in Brussels.

Many countries across Europe had engaged in challenging national programmes to cut spending and rein in budget deficits. Downing Street

He also spoke to Swedish Prime Minister Fredrik Reinfeldt and Belgian Prime Minister Yves Leterme.

While the budget was not on the formal agenda, it has dominated conversations on the sidelines and in meetings between government heads and officials.

EU summit

Mr Cameron – who was attending his first EU summit as Prime Minister – has been calling for a freeze in the budget at a time when many countries, including the UK, are cutting spending.

The European Council has already agreed in principle a 2.9 per cent increase, however, and the European Parliament is calling for a 5.9 per cent rise.

The final figure will set a baseline for the longer-term “financial perspective” which will determine the budget between 2014 and 2020.

A Downing Street spokesman said: “In all of his calls, he set out the case for fiscal discipline in the EU budget.

Mr Cameron’s spokesman added: “Our focus is on preventing the 6 per cent proposal which is supported by the European Parliament and the Commission from going ahead.

“In an ideal world we think the budget should be frozen or reduced but you need to remember that the majority of countries are net recipients of this budget, not net contributors, it’s something that’s dealt with by QMV.

“This is going to be difficult.”

Labour has accused the Conservatives of failing to “stand up for the British interest”.

Eurosceptic concerns

And one Conservative Eurosceptic MEP, Daniel Hannan, has objected to Britain allowing through separate plans for amendments to EU rules to toughen economic sanctions against member states in the Eurozone which breach debt and deficit rules.

Although Britain is not a member of the Eurozone and would not be affected by the change, Mr Hannan said the Government had promised a referendum on any changes to the EU Treaty.

“I would be very disappointed to see Ministers trying to wriggle out of that with some sophist reading of the small print,” he said.