Britain's new Tory chancellor demands EU budget freeze

18th May 2010, Comments 0 comments

In a classic echo of Thatcherite euroscepticism, Britain's Tories marched back into Brussels after a 13-year absence on Tuesday and demanded a total freeze on the European Union's 2011 budget.

Turning the tables on European calls for national austerity, Conservative finance minister George Osborne told his new partners it was "unacceptable" for Brussels to demand a six percent increase in its budget at a time of crisis and belt-tightening in the bloc's economy.

"I put to (my fellow ministers) that there should be a cash freeze for 2011 in the budget, given what many member states are having to do," the chancellor of the exchequer told reporters on his first day representing the new British coalition government in Europe.

"I was not alone... in saying that this was unacceptable, that many, many member states are having to accept public expenditure restraint and indeed cuts in administration costs," he stressed, referring notably to Greece, Spain and Portugal.

The European Commission expects Britain to post the EU's highest public deficit percentage next year.

Osborne underlined that the commission's proposal to increase the 27-nation bloc's joint budget for next year by "six percent, including a 4.5 percent increase in admininstration costs," had triggered a "a lively discussion."

That would translate into a 600-million-pound increase in Britain's gross contribution to EU coffers, he calculated.

Osborne said he discovered allies in France and Sweden in particular, and cited with intense irony "quite an interesting moment when the Greek finance minister was explaining to the commission the importance of European budget restraint."

The 2011 budget, worth 142.6 billion euros (176.4 billion dollars), foresees a 4.5 percent increase in administrative costs for EU institutions, including 2.9 percent for the commission itself, with the creation of new high-paying posts.

The EU and its European member governments are already engaged in a tussle over mooted salary hikes for some 50,000 European functionaries, which was referred to the European Court of Justice in Luxembourg following strikes around Christmas.

Osborne claimed it "was very important for me to show today that the Conservative government, in coalition with the Liberal Democrats, is going to engage positively in the issues that the European Union is looking at."

He said he would do that "constructively, but be very clear about the British national interest."

Commission spokesman on budgetary issues Patrizio Fiorilli told AFP that the EU executive itself was not creating the new jobs, after a string of diplomats criticised the planned increase ahead of its presentation to the ministers.

The EU's reforming Lisbon Treaty, which came into force last December, increased the remit of some European bodies, such as the EU parliament, the committee of the regions and the economic and social committee, he explained.

He also pointed to growing costs of retirement pay outs "like everywhere in Europe" and higher security costs of EU personnel worldwide.

Some 64.4 billion euros are for actions linked to securing Europe's economic recovery -- a rise of 3.4 percent over this year.

The commission spokesman also justified this rise, saying investment in the future is required.

© 2010 AFP

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