Merkel, Cameron in budget talks

British prime minister David Cameron last night held talks with German chancellor Angela Merkel over British demands for a freezing of the European Union budget.

The two met for dinner at 10 Downing Street, just hours after Mr Cameron had returned from a three-day visit to the Gulf and the Middle East.

Ahead of the meeting, Dr Merkel said she wanted the UK to remain in the EU – a statement seen in London as a raising of the stakes in advance of budget negotiations in Brussels later this month.

“I believe you can be very happy on an island, but being alone in this world doesn’t make you any happier,” she told the leader of the Eurosceptic UK Independence Party, Nigel Farage.

The British prime minister has repeatedly said that he does not want the UK to quit the EU, but he is insistent that the EU’s seven-year budget from 2014 must be frozen.

“They are proposing a completely ludicrous €100 billion increase in the European budget. I’ll be arguing for a very tough outcome,” he said.

Significantly, perhaps, Mr Cameron has begun to urge caution about the prospects of reaching any agreement at the upcoming Brussels summit.

“I never had very high hopes for a November agreement because you have got 27 different people round the table with 27 different opinions,” he said.

Many Conservative MPs, however, want him to go further and demand a cut in real terms, although Mr Cameron and other senior ministers believe such a demand is unachievable.

Mr Cameron faces serious difficulties since the result of the budget talks must be accepted by a House of Commons vote, where he is increasingly uncertain of the loyalty of his own MPs on EU issues.

However, he received a boost of sorts last night when mayor of London Boris Johnson urged the influential Conservatives’ 1922 backbenchers’ group to “get behind” a “first-rate, a world-class prime minister, as every poll confirms”.