EU budget: Another battle looms

German Chancellor Angela Merkel (r) and Spanish Prime Minister Mariano Rajoy Speaking the same language? The Germans predict the talks will be both difficult and divisive

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Last November, when Europe's leaders first discussed their long-term budget, French President Hollande said there was only 30bn euros (£25.9bn, $40.59bn) separating them. Some diplomatic sources in Brussels say a deal was close last year and could have been achieved.

That was then. The mood now remains cautiously optimistic but the Germans, who like to downplay expectations ahead of summits, are saying the talks will be "difficult and divisive".

UK Prime Minister David Cameron is seen as the leader of the lean brigade - those countries that believe EU spending has to be reined in at a time of austerity.

Britain is not isolated. It has allies in countries like the Netherlands, Sweden and Germany.

The EU Commission had wanted a 5% increase that would have delivered a budget of 1.033tn euros - that's more than a trillion over seven years. That was trimmed back in November to 973bn euros.

Britain and Germany and others are seeking yet further reductions. If savings of an extra 20bn euros were found then the UK would be able to claim it amounted to a cut based on the budget for 2012.

Everything is made more complicated by the fact that Britain bases its calculations on the payments it has to make, whilst others work on the basis of spending commitments - that is, maximum ceilings.

Even so, Herman Van Rompuy - the official who will chair the summit - has said that "for the first time ever - there will be a real-terms cut compared to the current budget".

Mr Cameron and German Chancellor Angela Merkel spoke on the phone at the weekend.

Afterwards, Downing Street said that both leaders agreed that the 973bn-euro proposal had to be reduced further.

Different agendas

One strange feature of this summit is that Mr Van Rompuy won't circulate his new proposal until Thursday afternoon, when all the heads of government are sitting around the table. This excludes pre-summit manoeuvring, but it could also spark arguments.

German officials were warning on Wednesday that Germany would not simply open its chequebook to solve the budget talks. But Germany will be looking for compromise and Angela Merkel is meeting on Wednesday evening with French President Francois Hollande, who has been sharply critical of more cuts.

Mr Hollande will resist any moves that undermine projects that, in his view, enhance growth.

Yet there is reason to believe French objections will be muted. Last November, France scored a significant victory.

The British, Swedish and Dutch agreed not to seek further cuts in the Common Agricultural Policy or the funding for poorer regions. That changed the atmosphere.

The British still feel agriculture and its funding needs further reform, but they will not make agricultural funding an issue at this summit.

Rebate debate

As always there are many different agendas. Some of the poorer eastern countries, which do well from EU grants, will fight to preserve those programmes.

There are several countries determined to protect their rebates or to qualify for a rebate. The Danes are looking for a significant reduction in their contribution.

The Italian Prime Minister Mario Monti believes Italy is paying too much and has turned his critical eye on the British rebate.

The British have made it clear that their rebate - worth £3bn a year - is non-negotiable.

Almost certainly the summit will demand further cuts in the cost of EU administration. Not only the British, but Dutch and German papers have been examining the pay and perks of the EU's civil servants and commissioners - some of whom earn more than their respective heads of government.

One final thought worth remembering - whatever is agreed has to go to the European Parliament and the MEPs are not just determined to flex their muscles, they are big backers of EU spending.

So even beyond the summit there may be battles ahead.

Gavin Hewitt Article written by Gavin Hewitt Gavin Hewitt Europe editor

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  • rate this

    Comment number 231.

    222 Andy

    "French should be stripped of the cap"

    I don't recall a similar request from Europe when BSE revaged the food industry and infected British beef had been widely sold on the continent with the government trying to cover it up.

  • rate this

    Comment number 230.

    #229 kane

    " Give it time, and she'll probably claim that Metz is in Kent."

    --and Newcastle is in Scotland ?

  • rate this

    Comment number 229.

    28 Minutes ago
    212 dmr
    "Well margarethoward tried to slide Silvercrest over the border from the Republic into N.Ireland. Give it time, and she'll probably claim that Metz is in Kent."
    Anything is possible with those that think Utopia is in Brussels.

  • rate this

    Comment number 228.

    #226 MH

    -- A good ´Pensioners Stew´was also a can of kangaroo dog food.

    -- The manufacturers spoiled the inexpensive delicacy by adding sand.

  • rate this

    Comment number 227.

    #221 WP

    --2011 is probably the last year to be published --thereafter secrecy for individuals --if I remember correctly.

  • rate this

    Comment number 226.

    222 Andy

    "French companies using horsemeat in '100% beef' products sold to British retailers"

    At least horses are free from mad cow disease.

    Shouldn't a world class company like Findus test batches of food from its suppliers in its laboratories?

    Years ago steak pies sold in many pubs and chip shops were found to have kangaroo meat from Australia in them.

    Glad I'm a vegetarian.

  • rate this

    Comment number 225.

    #223 tonep

    The Independent link has ben removed.

    Freehold is different.

    -- ´Crown´is still disputed.

    --and read last sentence-- Kensington Palace.

  • rate this

    Comment number 224.

    212 dmr

    "French company Comigel, sold Findus beef lasagne sold with 99% horsemeat."

    Well margarethoward tried to slide Silvercrest over the border from the Republic into N.Ireland. Give it time, and she'll probably claim that Metz is in Kent.

  • rate this

    Comment number 223.

    218 quiet

    What did your last slave die of?, treasury, duchy of cornwall, crown estates, all easy to find.

    a)By very definition you cant have a lease w/o knowing who the freeholder is. So thats rubbish.
    b)Anyone who has owned a leasehold prop for 2 years can have the leasehold extended by 90 years, as per the Leasehold Reform, Housing and Urban Development Act 1993

  • rate this

    Comment number 222.

    France should be stripped of the CAP as we now know French companies have been using horsemeat in '100% beef' products sold to British retailers. EC Must act on this or it is no longer fit for purpose.

    There is clear evidence of EU countries cheating other EU countries with the produce they are proividing - for financial gain.

    European Commission act and act quickly! or are you unfit for purpse?

  • rate this

    Comment number 221.

    217 209 Margaret QoT

    No secrets, the UK CAP payments are listed by DEFRA. Just type Duchy of Cornwall or what you like (even M Howard!) into the search section of

  • rate this

    Comment number 220.

    Just read properly the list of CAP recipients for 2009?
    There are two 100 year old dead recipients, several receiving less than a Euro. Some of the biggest are banana plantations in French territories.
    In Bulgaria, the payng agency, payed itself over a million Euros,as well as paying the daughter of the agriculture ministry 700,000.
    No wonder there's a problem signing the accounts.

  • rate this

    Comment number 219.

    MH, what I don't understand is if Brussels is so wonderful android obviously loathe England and the English people, why is it your choice of residence?
    If we spent the 14 billion wasted on EU membership, imagine how many thousands of nurses, police etc we could pay.
    We also wouldn't have to accept contaminated French lasagne either.

  • rate this

    Comment number 218.

    #213 tonep

    "You can find out about every penny, in or out, "

    --Source please --Thank you !

    Have an architect friend - he didn´t even know whose land his apartment was built on. Another got his cheaper as it wasn´t clear if land lease would be extended.

    -- waiting patiently for the info !

  • rate this

    Comment number 217.

    209 QOT

    Invisible finance of royals

    You're right. They are exempt from Freedom Information Act. True finances not £38m but £202m. Official costs exclude security, visits and lost revenue from duchies.

    £202m would pay 9 560 nurses, 8200 police, 112x as expensive as Irish premier, 2x as French pesident and 2x as Dutch royal.

    Add the unelected House of Lords - Brussels is a bargain

  • rate this

    Comment number 216.
    "Merkel and Westerwelle both said exactly the same thing"

    "But then we are all equal members of the same enterprise and entitled to give each others' opinion.
    Not a leader of some far off country we have nothing in common with except a language"
    At least zoophillia is not something the UK has "in common" with our German "equal partners" who have over 100,000 active participants.

  • rate this

    Comment number 215.

    "whatever is agreed has to go to the European Parliament and the MEPs are not just determined to flex their muscles, they are big backers of EU spending"

    Yet another reason to leave the "EU"

  • rate this

    Comment number 214.


    "I don't recall the EZ leaders appreciating DC's advice during the EZ crisis, so what gives them the right to direct advice at us"

    EUp: I think they are entitled to give advice but we are entitled to ignore it. The obscenity of the Euro demonstrates that a lot of what they are about is rubbish

    There are ways we should learn from Germany. More from Switzerland

  • rate this

    Comment number 213.

    209 quiet

    -"- With secrecy for UK Royals -- now their finances and interests are completely ´invisible´ for their Subjects"

    You can find out about every penny, in or out, with minimal effort. Sovereign grant, Crown Estate, Duchy of Cornwall, Privy Purse, every penny audited and available online as a pdf. If its invisible to you, its because you close your eyes.

  • rate this

    Comment number 212.

    French company Comigel, sold Findus beef lasagne sold with 99% horsemeat. I hope the EU investigates such lawbreaking and contaminating of meat products, the horsemeat probaly contained the drug brute, sold to the UK.


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