Brussels demands budget surcharge from the UK

Prime Minister David Cameron is resisting a call for the UK to pay more to finance the EU’s institutions

British Prime Minister David Cameron walks past journalists on the second day of an EU summit in Brussels today.  Cameron’s opposition to chipping in €2.1 billion is the latest installment in a fight dating back to the 1970s, this time with the potential to shift UK public opinion toward quitting the 28-nation bloc. Photograph: Yves Logghe/AP Photo

British Prime Minister David Cameron walks past journalists on the second day of an EU summit in Brussels today. Cameron’s opposition to chipping in €2.1 billion is the latest installment in a fight dating back to the 1970s, this time with the potential to shift UK public opinion toward quitting the 28-nation bloc. Photograph: Yves Logghe/AP Photo

 

Britain’s decades-long battle over the European Union budget flared up again with Prime Minister David Cameron resisting a call for the UK to pay more to finance the EU’s institutions in Brussels.

Cameron’s opposition to chipping in an €2.1 billion is the latest installment in a fight dating back to the 1970s, this time with the potential to shift UK public opinion toward quitting the 28-nation bloc.

The budget debate was thrust onto the agenda of a two-day EU summit that concludes today after leaders said they were taken aback by the results of a recalibration of contributions based on economic performance. While Finland called for some perspective, the Netherlands joined the UK in challenging the move after it was presented with a request for an extra €642 million.

The commission, the EU’s executive body, said the changes had been previously agreed to.

“I want to know the details,” Dutch Prime Minister Mark Rutte told reporters in Brussels early today after the first day’s summit deliberations. “The only thing I know is that changes have taken place in the accounts. That it happens doesn’t come as a surprise for us. But what does surprise us are the very huge amounts.”

Cameron met with Rutte yesterday to rally support against the move, according to a U.K. government official who asked not to be named because the discussions were private. Bulgaria, Ireland, Greece, Italy, Cyprus, Latvia and Malta are also being asked for a budget top-up, the official said.

Mountains, molehills

“It’s very important we don’t start treating the European Union as some kind of simplified accounting exercise,” Finnish Prime Minister Alexander Stubb said today as he arrived for the meeting, noting that the UK, unlike Finland, receives a rebate “regardless of its economic power.” “Sometimes I think we make mountains out of molehills, or molehills out of mountains,” he said.

The strength of the UK economy relative to other European countries was underlined by figures today showing a seventh straight quarter of growth. The 0.7 per cent expansion between July and September left gross domestic product 3.4 per cent above its previous peak in 2008. By contrast, the euro area is forecast to have expanded just 0.2 per cent, according to a survey of economists, after no growth in the previous three months.

Still, the pace of UK growth slowed from 0.9 per cent in the second quarter and there are concerns that the weakness in the euro area, Britain’s biggest export market, will continue to weigh on the economy.

The surcharge, which in the UK’s case represents almost 20 percent of its net contribution to the EU budget in 2013, is due on Dec. 1, according to the Financial Times, which first reported the move. France is in line for a €1 billion rebate, while Germany can expect €780 million back, the newspaper said.

“It’s unacceptable that the outgoing EU Commission should spring a backdated bill on member states in this way, but UK ministers have known about this since last week,” Pat McFadden, who speaks on European affairs for Britain’s opposition Labour Party, said in a statement. “The government should be pushing for the best deal possible for the UK.”

Bloomberg