British PM strives to stop EU budget rise

28th October 2010, Comments 0 comments

British Prime Minister David Cameron took his campaign for austerity to the European Union on Thursday, calling for support from counterparts in his campaign against a steep EU budget hike in tough times.

Cameron flew into the summit vowing to "put a stop" to an "unacceptable" six percent increase sought by the European parliament for next year's budget.

Before joining discussions on a landmark plan to stave off future economic crises in Europe, the British leader told reporters he would use the summit to "build alliances" in his effort.

He held a 20-minute meeting with French President Nicolas Sarkozy and German Chancellor Angela Merkel ahead of the actual summit.

A French official on site said the trio agreed that additional spending should not go beyond the 2.91 percent settled on by member states in the autumn.

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

The summit is aiming to strike a deal to strengthen fiscal discipline among states following the Greek debt crisis.

The Conservative leader was circulating a draft letter for fellow leaders to sign, diplomats said.

The letter, in all European languages, says the European Parliament and European Commission are seeking a nearly six percent increase in spending next year, and goes on to say:

"These proposals are especially unacceptable at a time when we are having to take difficult decisions at national level to control public expenditure."

The letter recalls that European nations proposed an increase of no more than 2.91 percent. "We are clear that we cannot accept any more than this," the document says.

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

Cameron originally wanted a total spending freeze, and British media have valued the 2.91 percent rise at 435 million pounds (500 million euros or nearly 700 million dollars) next year.

The increase sought by European institutions was unacceptable "at a time when European countries including the United Kingdom are taking tough decisions on their budgets and having to cut some departments," Cameron told reporters.

"It's completely wrong that European institutions should be spending more money on themselves in the way that they propose," he said.

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

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

Parliament president Jerzy Buzek said 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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