Britain's fight over EU budget as Brussels seeks rise

UK PM David Cameron in Brussels. File photo Forging a deal on 22 November will be tough for David Cameron

Britain is not alone in seeking to rein in the EU budget. It has allies.

Plenty of other countries agree that the EU cannot ask for austerity on the one hand, whilst not applying the same demands to itself.

No other country, however, takes such a hardline position as the UK.

The EU Commission wants a 5% increase in the seven-year budget. That would increase it to over 1tn euros (£830bn; $1.3tn).

The Germans want to limit the budget to 1% of the bloc's GDP. That would be over 100bn euros less than the Commission wants.

The British want a freeze in EU spending, allowing for inflation. That would produce a budget about 70bn euros less than the Germans.

Others have their objections. The Swedes believe the priorities are wrong: too much money is still going on agriculture.

The Poles fear that a budget freeze will reduce the funds they receive from the cohesion funds - EU money that helps the poorest regions across the 27-nation bloc.

EU draft budget for 2013

  • Total - 137.9bn euros
  • Cohesion (spending on Europe's poorer regions) - 49bn
  • Agricultural support - 44.1bn
  • Administration - 8.5bn

There are groups, like the Socialists in the European Parliament, who are warning against the budget becoming a victim of domestic political infighting.

No other member state would support a reduction in spending. The Commission says cutting its proposed increase would damage growth.

Forging an agreement on 22 November will be very difficult. Extra food has been ordered in case the summit extends into the weekend.

There has even been consideration of whether to postpone the meeting altogether.

British 'exceptionalism'

Much will turn on talks next week between German Chancellor Angela Merkel and David Cameron.

The Germans will be looking for compromise. The fear in Berlin is that the British have left themselves little room to manoeuvre in saying - as George Osborne did today - "we will veto any deal not good for British tax-payers".

That plays badly in Europe. The culture is built around compromise and deal-making.

The mood in Europe in recent months has turned against Britain.

On a visit to Berlin this week, I was left in no doubt that the German government would prefer the UK to remain at the heart of Europe. There is not the inclination, however, to make too many concessions or to pander to what is called British exceptionalism.

What they will not accept is that Britain either obstructs moves aimed at solving the eurozone crisis or disrupts EU business.

The UK proudly says it has the toughest negotiating stance of any EU state, but if it is to avoid being isolated it will have to forge alliances - and that usually involves horse-trading.

Gavin Hewitt Article written by Gavin Hewitt Gavin Hewitt Europe editor

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  • rate this

    Comment number 9.

    Those calling for a return to the Common Market must learn to accept that they are in the minority in the EU. None of the other 26 member states want to go backwards and so it is simply not going to happen. I support a political and economic union; the only alternative is to leave the EU. Given that UKIP got just 3% of the vote in 2010, I assume that most people aren't that desperate to leave.

  • rate this

    Comment number 8.

    EU culture is built around compromise and deal making. So little details such as principles and morality count for nothing.

    Oops I forgot the EU has certain guiding principles - ever closer union irrespective of what the people want, UK to pay more and more on a net basis, and no matter how many people starve in Africa, no changing the CAP because protecting French farmers is the ultimate goal

  • rate this

    Comment number 7.

    7 Minutes ago
    ...What will happen when we face import tariffs on 50% of our Europe bound GDP?....

    They'll be paid by reciprocal levies.

  • rate this

    Comment number 6.

    Mr Cameron should go to the EU summit with the following message:
    'We are trying to reduce our deficit in line with EU rules.
    We haven't got the money for any increase - even in line with inflation.
    Sorry, chaps - but there it is.'

  • rate this

    Comment number 5.

    It would certainly be good to return to a Common Market. I fear it is no longer possible, however.

    Time to leave, I think. The pro-EU people always draw on fear at this point. 'Too much of our trade is with the EU' etc.

    We seemed to manage before the EU and we have been net contributors - at least £6bn last year - ever since.

    We could pay that to the EEA if necessary, probably not.

  • rate this

    Comment number 4.

    The Tories want us to return to Alf Garnet's world, where all the postmen were white, a police office doffed his cap to the local doctor and felt the collars of the ruffians on the local council estate.
    We make most of our money from Europe. Everyone was ecstatic last week over 0.2% growth. What will happen when we face import tariffs on 50% of our Europe bound GDP?

  • rate this

    Comment number 3.

    Once more one side will roll out its barbed wire made of irksome fact. Once again the wild-eyed will charge it fuelled by the fervour of their faith. Such are the debates about independence, whether from the EU or the UK. Let battle commence…

  • rate this

    Comment number 2.

    Please let us return to the original Common Market, the only euro-organisation any of us ever said we wanted to be in or join.
    But if we do leave, I suggest we give them a leaving present - Tony Blair as their president - then we can be rid of him for good.

  • rate this

    Comment number 1.

    The public wants a trading bloc in which few tariffs or weird taxes inhibit trading.
    It does not want Country-A paying for Country-B (particularly when Britain is A).
    It does not want a Euro-parliament sitting above its own
    It does not want a European army, bank, civil service, president or anything else.
    Can we please just return to the concept neatly captured in the phrase "Common Market"?


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