British PM rallies partners against EU spending spike

28th October 2010, Comments 0 comments

British Prime Minister David Cameron took his austerity policy to the European Union on Thursday, gaining support from key partners in an attack on a steep EU budget hike in tough times.

The Conservative leader flew into a summit of European leaders to launch a vivid attack on an "unacceptable" and "completely wrong" six percent increase sought by the European parliament for next year's budget.

"I want to build alliances, work with colleagues, put a stop to that and see if we can do something about it," he said.

Cameron, who last week introduced Britain's toughest austerity measures in years, pressed his case as the 27-nation summit opened, sparking what one diplomat described as a "heated" debate.

He later circulated a letter which called for a budget increase of no more than 2.91 percent, a climb down from his previous call for a spending freeze.

British media and opposition lawmakers have pointed out that Cameron's change in stance will cost taxpayers 435 million pounds (nearly 500 million euros or 700 million dollars).

Cameron's letter was signed by 11 leaders, including the French President Nicolas Sarkozy and German Chancellor Angel Merkel, who held a brief meeting with Cameron just before the summit.

The EU budget totalled around 123 billion euros (172 billion dollars) this year.

The letter states that the increase sought by the European parliament and European Commission was "especially unacceptable at a time when we are having to take difficult decisions at national level to control public expenditure".

It recalls that European nations proposed an increase of no more than 2.91 percent, during talks at which Cameron was out-voted and lodged a formal note of objection.

"We are clear that we cannot accept any more than this," the document says.

A European diplomat said the wording was a signal that "we're not going to compromise" down the middle with the parliament.

Cameron had a lively exchange with EU parliament president Jerzy Buzek, who told the British premier that "if you're against six percent, you're anti-European", the diplomat said.

Cameron retorted: "When I'm cutting the police budget, does that make me anti-police," the diplomat said. Merkel chimed in: "I'm cutting the German budget. Am I anti-German?"

Another European diplomat said EU economic workhorse Poland, which did not sign the letter, would not accept a reduction in the EU budget, which new bloc members in eastern Europe depend on for regional development.

A reduction "won't be acceptable for many countries", the diplomat said.

The final EU budget sums are now being negotiated in a "conciliation" process gathering EU states and bodies, with an end-year deadline to resolve the row.

Buzek told reporters there were "still 20 days" set aside for those talks.

Asked to comment on Cameron's intervention at the summit, Buzek said 10 leaders spoke up in his support but "there was no clear support for what Prime Minister Cameron proposed".

Cameron is due to host Merkel at his English country retreat on Saturday, and then Sarkozy for Anglo-French talks on Tuesday.

About three-quarters of the EU's cash budget is funded through national government contributions, the rest coming from a levy on national VAT receipts and import duties.

Britain argues that other states want to see the EU budget rise because they are net beneficiaries, whereas it says London is a net contributor, despite billions returned to Britain each year under a deal negotiated by Margaret Thatcher in the 1980s.

© 2010 AFP

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