Britain's Cameron looks to Germany to avoid EU isolation

23rd November 2012, Comments 0 comments

British Prime Minister David Cameron risked further isolation Friday over the EU's disputed new budget, although an unlikely alliance with Germany's Angela Merkel could win him some concessions.

Nearly a year after he enraged his European counterparts by vetoing a pact to resolve the eurozone crisis, Cameron was antagonising them at a budget summit in Brussels by demanding big cuts to the perks of so-called "eurocrats".

Cameron needs to placate eurosceptic members of his Conservative party to avoid a rebellion at home, and has threatened a new veto unless there is a freeze in spending and guarantees for Britain's cherished EU rebate.

But there is growing anger in the rest of the 27-member bloc over the British demands for special treatment -- the latest in a history of bad blood dating back to "Iron Lady" Margaret Thatcher and even before.

"It's not necessary to isolate Cameron, he can isolate himself," said former Belgian prime minister Guy Verhofstadt, now a member of the European parliament.

The British premier was in an uncompromising mood on his way into the second day of talks on the trillion euro budget.

"It isn't a time for tinkering," he told reporters. "I don't think there has been enough progress."

But whereas in December 2011 he stood alone after torpedoing the debt-stricken EU's fiscal pact, this time around Cameron has been reaching out to other European players.

He held bilateral talks with French President Francois Hollande before the summit restarted, with a source describing the mood as amicable despite broad disagreements over agricultural subsidies and the rebate.

Cameron also met Merkel for the second time in two days and a British official said the German chancellor was "sympathetic" towards London's position. The talks quickly led to the duo being dubbed "Merkeron" or "Camerkel".

British sources say they also have the support of Sweden and The Netherlands in pushing for more austerity.

Cameron has angered many in the EU by suggesting administrative cuts worth six billion euros including slashing perks for EU officials.

But his government has quietly scaled back its demands in recent weeks, with officials indicating it would settle for a 940 billion euro spending ceiling, instead of the 886 billion euros it had originally called for.

An EU source said that while the rest of the bloc appeared unwilling to move towards the British position, it would not be sensible to send any country home to face voters without any concessions.

Cameron is walking a political tightrope in Britain.

He leads a fragile coalition government with the pro-Europe Liberal Democrats and faces elections in 2015 during which he will try to win a majority, for which he will need the "eurosceptic" wing of his Conservative party on-side.

The eurosceptics subjected Cameron to a humiliating parliamentary defeat on the budget issue last month and they have public opinion behind them, with many Britons seeing the EU as a meddling gravy train.

But Cameron must also avoid burning all his bridges in Europe ahead of a summit in December focusing on banking, where he will be trying to protect London's vital financial services industry.

For all the talk of a possible "Brixit" from the EU, Europe remains by far Britain's largest trading partner.

This week's budget summit however appeared mired in pessimism, with any deal unlikely until next year.

A British official said they would "not be surprised" to be going back to London later Friday.

European Parliament President Martin Schulz said overnight that the "room for manoeuvre for Mr Cameron is so small that it is likely he will not agree, that's my impression."

One EU diplomat went further, saying that Cameron could be jeopardising one of his own stated goals -- the protection of Britain's cherished 3.6 billion euro annual rebate from the EU.

"If there is no deal on Friday it will deprive the British of the victory they had hoped for as far as securing their rebate," the diplomat said on condition of anonymity.

On the demands for cuts, the diplomat said: "The most virulent were the British, the Swedish and the Dutch."

© 2012 AFP

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