News Column

Britain Doesn't Budge On EU Budget Cuts

Nov. 22, 2012

Britain refused to budge Thursday on its demand for slashing European Union spending, raising fears that a summit starting later in the day will fail to break a deadlock on the bloc's budget for 2014-20.

Britain is threatening to veto talks unless spending is frozen at 2011 levels, which diplomats say would amount to a 200-billion-euro (257-billion-dollar) cut over a 1.09-trillion-euro budget proposed by the European Commission.

As a compromise, EU President Herman Van Rompuy had suggested an 80-billion-euro reduction.

But in pre-summit consultations, Cameron told the EU president that "while the latest proposals were a step in the right direction, they did not go far enough," a British government spokesman said.

Van Rompuy was meeting EU leaders one by one Thursday, before formally opening the summit at 8 pm (1900 GMT).

"We're going to be negotiating very hard for a good deal for Britain's taxpayers and for Europe's taxpayers," the British premier said before the meeting, insisting it was "quite wrong" to exempt the EU from the belt-tightening being applied by national governments.

British demands for austerity are supported by the likes of Sweden and the Netherlands. But they have to be squared with Poland and other Eastern European nations, who are determined to preserve EU subsidies for their poor regions.

"Unfortunately, but the British are our opponents today," Polish Prime Minister Donald Tusk said in Warsaw before flying to Brussels.

Germany, the EU's paymaster, agrees that austerity is needed, but less adamantly than Britain. France and Italy also want to reduce their EU bill, while retaining access to large chunks of agricultural and regional aid.

Paris and Rome are unhappy because they do not benefit from rebates in their contribution to the EU budget, unlike Britain and other net payers such as Germany and Sweden.

"Italy until now has been disproportionally penalized," Prime Minister Mario Monti said, threatening to veto talks unless his country secured more funds. "We will not accept solutions that are unacceptable."

But scrapping the rebate system - which Britain secured in the 1980s after an epic battle by former premier Margaret Thatcher - is another no-go for London and other beneficiaries.

Facing a eurosceptic public opinion and a request by his parliament to go even further and demand a reduction in EU spending, Cameron has limited room to make concessions.

"I cannot imagine how we will be able to convince them, but they will have to let themselves be convinced," Luxembourg Prime Minister Jean-Claude Juncker said, forecasting "very difficult negotiations."

"If some countries just come here and say, 'That's it and full stop,' then probably we will not reach an agreement," Latvia's premier, Valdis Dombrovskis, warned.

Some officials were already bracing for the talks to fail.

German government sources said it would not be "the end of the world" if "a small number of more months" were needed to forge a consensus. Austrian Chancellor Werner Faymann said another summit could be held in January or February.

But Finnish Prime Minister Jyrki Katainen said kicking the can down the road would not help. "I don't believe if you take a time-out it would make things easier," he said, dismissing speculation that EU countries could draw up a budget without London.

Getting a deal through will take "quite long" and the summit will at best finish "very, very late tomorrow evening," Katainen predicted. EU summits normally take place on Thursday and Friday, but staff was alerted to be ready to work at least until Saturday.

Once leaders agree, the European Parliament also has to approve the spending plans. The assembly has threatened a veto of its own if Van Rompuy's cuts are approved, judging them too radical.

Although the money only starts flowing in 2014, a deal is needed beforehand so that regulations on how the funds can be spent can be drafted in time. If the deadline is missed, the EU's budget for 2013 will be rolled over annually, adjusted for inflation.

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Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH