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 69.

    The commission is pushing austerity in all the member States, oblivious to the suffering on EU citizens.
    Such a shame it doesn't hold the same values when it comes to It's own self interest.
    The budget shoud be reduced by taking an average of all the reductions in member states and applying it to the EU budget. That would then be fair.

  • rate this

    Comment number 68.

    As the EU accounts have not been signed off by the auditors for many years, why don't we insist that no discussion on future budgets is possible until we have confidence that the current expenditure satisfies accounting standards.

  • rate this

    Comment number 67.

    #65 kane

    "you can be sure that he who pays the piper calls the tune.

    --German bloggers agree with you.

  • rate this

    Comment number 66.

    All quiet on the ´Western Front´--let the ´Battle for Britain´ begin.

    "Cameron to right of them,
    Cameron to left of them,
    Cameron behind them
    Volley'd and thunder'd;
    Storm'd at with shot and shell,
    While horse and hero fell,
    They that had fought so well
    Came thro' the jaws of Death
    Back from the mouth of Hell,
    All that was left of them,
    Left of fifty three."

    EU --in OR out ?

    To the flag !

  • rate this

    Comment number 65.

    5 Minutes ago


    "-- Was reality ever a strong point of yours ?"
    The reality is, Mohammed is coming to the mountain and not the other way around. Complete with begging bowl, you can be sure that he who pays the piper calls the tune.

  • rate this

    Comment number 64.

    Most of these comments fail to see the BIGGER picture. With the rise of China, India and the stalling of US power we are fast approaching a multi-actor world. If Britain wants to have a say in this world then it will have so as part of the EU...not as a tiny island gazing in despair across the water as the USA gradually begins to sink. Britain's voice must be an EU voice in an Asian century.

  • rate this

    Comment number 63.

    #60 I am sure all that you say about the EU economy is true, but there are lots of countries who are not in the EU who manage to trade extensively with the EU, send tourists to the EU etc. So not being in the EU would not stop UK companies trading in the EU and in most cases (thanks to the WTO) would not even result in any import duties

  • rate this

    Comment number 62.

    The defeat is a consequence of the Government's disastrous economic policy. Cameron ought to be agreeing with the Germans and arguing for re-directing the limited funds available towards policies for growth, here and in Brussels, away from agriculture and towards research, innovation and infrastructure. He'd have allies for that, but he prefers to keep his party quiet with isolationism.

  • rate this

    Comment number 61.


    -- Was reality ever a strong point of yours ?

  • rate this

    Comment number 60.

    53 Colin

    " leaving get back our democracy independence hope for prosperous future"

    The EU is the largest economy in the world.
    Largest exporter
    The richest countries, top three world tourist spots France Spain Italy

    Largest air craft industries, steel, dairy, fashion. beer, cosmetics, luxury goods, mobile telephones, energy, paper,banking,car makers

    You want to be outside?

  • rate this

    Comment number 59.

    The UK will make the rules, end of the news. They (the EU) need the UKs money, the EU will do as it is told.

  • rate this

    Comment number 58.

    Mr Hewitt

    --A poorly researched and thus incomplete article !

    " The catch (22 !) for Britain is that an annual budget would require only a qualified majority, meaning other EU member states could overrule the UK.

    "A Veto Could Get Expensive for London"

    -- Ha ! Ha! Ha!

    -- reality is different.

  • rate this

    Comment number 57.

    So the Poles are not happy because they wont get enough money from the UK if we don't raise the EU budget.
    To hell with this EU, after the Poles you have the Macedonians and Co queuing up with their hands out wanting money and that includes Iceland who voted to not pay back the monies invested in their banks by British councils after they lost it.
    The whole thing with the EU is a farce.

  • rate this

    Comment number 56.

    If 80% of the laws passed in the UK originate from the EU, doesn't that warrant cutting the number of MP's in London by a similar amount? After all, they aren't deciding anything for us anymore, the EU does that! Why should we be paying for that shower down south if their only function is to nod through EU regulations and shout a few "here, here, here's"?

  • rate this

    Comment number 55.

    It's a case of, what if.
    In my opinion, we would not be where we are now.

  • rate this

    Comment number 54.

    deputy prime minister

    He continued: "Heading for the exit would be the surest way to diminish our great country."

    It would reduce the UK's clout in Washington, he predicted

    EUp: How about us having some clout in our own country? As long as we don't have that then clout in Washington or Timbuktoo is insignificant.

    Free Britain NOW!

  • rate this

    Comment number 53.

    Re 51. The real price of leaving would be to get back our democracy, our independence and a hope for a prosperous future. General de Gaulle was right when he said that the UK had no reason to join. We need no concessions - just leave and let the EU sink into the morass of corruption and undemocratic bureaucracy which is engulfing it. Only the political elite will regret leaving

  • rate this

    Comment number 52.

    The UK proudly says it has the toughest negotiating stance of any EU state, but if it is to avoid being isolated ...

    EUp: I would rather be "isolated" than be in the "EU". I would like the UK and Germany, where I live, to be isolated from foreign criminals, to be isolated from paying for countries with a culture of corruption, to be isolated from having to pay for the monster in Brussels...

  • rate this

    Comment number 51.

    Little England rules again. The UK , in the particular the English section of it proves once again to be the most inward looking uncooperative part of Europe. Maybe it would be better for all concerned that the country clears of the Union and then finds out to it's horror just how much the real price separation will be. Europe should offer no favourable concessions to those who leave.

  • rate this

    Comment number 50.

    On the other hand LeftLibertarian, we could have joined, input into the process and still ended up with what we have now.


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