EU set to defer Britain's 2.1-bn-euro bill

7th November 2014, Comments 0 comments

EU finance ministers looked set Friday to allow Britain to pay in instalments a massive 2.

1-billion-euro surcharge after London set up a new showdown with Brussels by refusing to settle the bill by next month.

British Prime Minister David Cameron has refused to meet a December 1 repayment deadline, saying it could hasten his increasingly eurosceptic country's path towards the EU exit door in a 2017 referendum.

A proposal to allow Britain to defer payments of the bill has been introduced by Italy, which holds the rotating EU presidency, and would also help out the Netherlands which has been landed with a 642 million bill.

The surcharges are based on a recalculation of member states' budgets over several years but first emerged at a summit in October, sparking Cameron's fury at the short deadline.

Finance Minister George Osborne vowed to get a "better deal" for his country as he arrived for the meeting.

"The demand that Britain pays £1.

7 billion on the 1st of December is unacceptable," he told reporters.

"I will make sure that we get a better deal for Britain.

"- 'Exceptional circumstances' -A row over the bill has overshadowed new European Commission chief Juncker's first week in office, with Juncker accusing Cameron of having a "problem" with other leaders after the British premier brought it up at the October summit.

Cameron's position is influenced by his political troubles at home, where his Conservative party is under threat from the eurosceptic UK Independence Party of Nigel Farage ahead of a general election in May.

The Italian plan being discussed by ministers on Friday -- the contents of which were confirmed to AFP by a European source -- solicits "exceptional circumstances" under which member states face large budget surcharges.

"This should allow for the Member State concerned to defer the required payment over a reasonable period of time," it says, although the length of the delay was not specified in the proposal.

Irish finance minister Michael Noonan said he was open to a new deadline of the end of 2015, with the payments in instalments.

Netherlands finance minister Jeroen Dijsselbloem, who also heads the influential Eurogroup of countries that use the single currency, said he was "working closely with the British government.

""I haven't seen the solution yet but everyone is helping to find it so I'm optimistic," he said.

- Cameron is 'unbearable' -Cameron has promised to hold an in-out referendum on membership of the EU by the end of 2017 if he is re-elected.

But while senior EU officials have said they are keen to keep Britain in the fold, there is growing annoyance at his demands, with German Chancellor Angela Merkel reportedly saying that immigration curbs sought by Britain are a "red line".

"He is unbearable," one European diplomat told AFP of Cameron after the British leader's comments on the bill following last month's summit.

Another EU source added: "Cameron was the one during the summit who pledged not to politicise the issue and at his press conference he did the opposite, everyone was astonished and very upset.

"Meanwhile a global tax breaks controversy surrounding Luxembourg and Juncker, who was the tiny EU country's prime minister before joining the Commission, hung over the meeting of ministers in Brussels.

Household names such as Pepsi, IKEA and Deutsche Bank were among companies named by the US-based International Consortium of Investigative Journalists (ICIJ) following a six-month investigation of 28,000 leaked documents.

The European Commission said it was already investigating Luxembourg's tax deals, while a spokesman for Juncker said he was unfazed.

But the leaks risked weakening the position of Juncker, who has followed up his vow to lead a more political commission by chastising Cameron and Italian prime minister Matteo Renzi for comments they made about the EU in recent days.

Juncker presided over the tax affairs of Luxembourg at the time when the tax deals were brokered, transforming the country from a sleepy European backwater into a prized destination where the world's biggest companies channel their affairs.

© 2014 AFP

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