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 289.

    #286 MH

    -- The Feudal system is in danger.

    --that´s a big part of it.

    --on the other BBC blogs, some see through the deliberate propaganda of the UK government and some of their ´elite´ UK media.

    It is apparent that kane (and some others) have no idea how low the UK is thought of in Europe --the UK and Greece are now being mentioned in the same breath.

  • rate this

    Comment number 288.

    276 Bumstead

    "What possible benefit is expansion when the EU is in a severe financial crisis? Will Croatia, Serbia etc be huge net contributors?"

    The EU is the largest economy in the world and the largest exporter.
    Huge trading blocs are the future and we must expand and keep up.

    They will eventually contribute and the present world recession can't be allowed to stand in the way.

  • Comment number 287.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 286.

    277 QOT

    "Why should the Brazilians go to the UK ?

    Good question. They will be very wary after one of their citizens was shot in the head eight times by our police mistaking him for a bomber.

    Perhaps this latest EU row is being engineered to make England leave and become the 51st US state and we Scots will vote for independence and become an EU member in our own right.

  • rate this

    Comment number 285.

    #281 kane

    -- and how can ´ease of doing business´be any good to the Brazilians --when the UK is OUT of the EU ?

    -- stop trying to ´Greek´ us !

    --or don´t you mean ´shot in the head´--which you would be requesting the Brazilians to do.

  • rate this

    Comment number 284.

    #279 kane

    "Poland acts as if it's a big player"

    First, Poland came in the EU in 2004, thanks to British policy. Second, the "Polish plumber" played a big role in the French NO to the EU constitution in 2005. Third, I know that a lot of Polish workers are working in the UK.

    Still, Poland is sometimes used by the UK (government) as a balance against the French/German axis. As for the UK people??

  • rate this

    Comment number 283.

    "If Germany left Euro and EU she would be surrounded by allies --the UK with water."
    You've got to be joking. The whole concept of the EU is to stop the Germans slaughtering everybody. My guess is that nearly all of mainland Europe would breathe a huge sigh of relief if Germany were removed from the map. "Surrounded by allies" what a joke.

  • rate this

    Comment number 282.

    270 QOT

    Britain failed both inside and outside the EEC or EU

    When you compare the German yearly trade surplus of about 160b eu (2011) to that of our enormous monthly deficits of about 8-10b £ you wonder where we have gone wrong.

    I blame Thatcher for thinking a country of 60m people could thrive on a service and banking industry, one which is mired in scandal now and likely to collapse.

  • rate this

    Comment number 281.

    "Why should the Brazilians go to the UK ?--they can go directly to Europe."
    Perhaps this may help you to understand
    Brazil is a booming country, they hardly want to get caught up in Eurospeak at this crucial point in their progression. It's just one more way that our EU counterparts shoot themselves in the foot

  • rate this

    Comment number 280.

    Merkel said she wants Greece in Euro and EU - the Greeks immediately see it as a weakness and ´blackmail´

    Merkel only has to say she wants Britain in the EU-- and this time the Brits have ´Delusions of Grandeur´

    in the meantime the majority of Europeans want both Britain and Greece to pack their bags.

    If Germany left Euro and EU she would be surrounded by allies --the UK with water.

  • rate this

    Comment number 279.

    "Vision is a thing developed in context, using valid contributions from everyone."
    Vision is one thing the reality of the policies another. The contribution by the UK to Poland is hard cash and from Poland to the UK,it's pay more or get out. Nobody in the UK believes if it were the other way around that Poland would submit to that type of posturing. Poland acts as if it's a big player

  • rate this

    Comment number 278.

    #276 DMR

    "part of the extra money is apparently for EU expansion."

    Yes, and the 2004 and 2007 expansions were part of the British policy to dilute the EU into a mere trade organization, just what the EEC was not about (EFTA was).

    So now you are saying that past British policy was foolish. I agree, but the British have to take responsibility for it, which they apparently don't.

  • rate this

    Comment number 277.

    We have the Greeks saying they don´t want to pay their debt -- but will stay in the Euro.

    We have Britain saying they don´t want to pay but want the trade.

    We have Cameron going to Brazil -- saying they should come to the UK --as they can trade with Europe from there.

    Why should the Brazilians go to the UK ?--they can go directly to Europe.

    -and why should Europe want a second Greece logic

  • rate this

    Comment number 276.

    @272 As I mentioned in my 147, part of the extra money is apparently for EU expansion. This only shows how totally out of touch with reality the EC members are. What possible benefit is expansion when the EU is in a severe financial crisis? Will Croatia, Serbia etc be huge net contributors? Hardly. Expansion under present circumstances is NOT for the common good at all, quite the opposite.

  • rate this

    Comment number 275.

    #273 kane

    What is missing in Southern Europe, and elsewhere, is a hard nosed evaluation of the real effects of public policies. This requires independent think tanks, analysts, etc. and not only "media" which are at the whim of a distant boss such as Rupert Murdoch. Vision is a thing developed in context, using valid contributions from everyone. Not the empty posturing which goes on now.

  • rate this

    Comment number 274.

    #271 dmr

    -- we have heard all those stories and tales from the Greeks on this blog.

    -- Both you and Britain are now in the ´firing line´--to justify your insanity.

    -- You are lapping up any propaganda thrown at you -- and accepting without question -- as the many ´mentally disturbed´societies before you.

    --this concerns you -- when media and government are indoctrinating.

  • rate this

    Comment number 273.

    "but his main vision remains."
    Unfortunately it does, as Southern Europe can testify. The marriage between Germany and France is slowly tearing Europe apart only this time I very much doubt the cavalry will be coming to the rescue.

  • rate this

    Comment number 272.

    #271 DMR

    "it is the fact the EU has the gall to demand more money when governments are cutting back."

    This shows that the EU Commission is on a different wavelength than the governments/banks/investors, etc. They still think that investment for the common good is important. It is up to the media in the UK to explain why the EU wants the increase. Gavin Hewitt failed to explain this clearly.

  • rate this

    Comment number 271.

    It is not the amount of money, it is the fact the EU has the gall to demand more money when governments are cutting back.
    The EZ is in a financial mess, sinking under debts, the economy has shrunk for 15 months and half the members look like they will never come out of depression.
    Avoiding such a disaster and looking to the rest of the world looks like common sense, not mass hysteria.

  • rate this

    Comment number 270.

    Kane, dmr,

    -- As yet, I have not heard one iota from either of you -- that does not suggest that much of Britain is in a state of mass hysteria.

    --over 7 Bln and ´sovereignty´ -- and that both will ultimately change millions of Brit lives for the better.

    --this is the same phenomena that affected a downtrodden Germany

    --and no society is immune --when supported by media and government.


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