David Cameron: EU must reduce proposed budget rises

David Cameron says the EU "should not be immune" from spending cuts

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Proposed increases to the EU's long-term budget at November's summit were "much too high" and need to be reduced, Prime Minister David Cameron has said.

As EU leaders gathered for the latest two-day budget summit in Brussels, Mr Cameron told reporters that there would be no deal if his demands were not met.

"Frankly the EU should not be immune from the sorts of pressures that we've had to reduce spending," he said.

The summit was convened to reach a deal on the next seven years of EU spending.

EU member states have had to "find efficiencies [and] make sure that we spend money wisely", he told waiting reporters.

"When we were last here in November, the numbers were much too high: they need to come down, and if they don't come down then there won't be a deal."

'Fragile economic recovery'

An unnamed EU official told AFP news agency that the formal meeting had been delayed to allow more time for discussions on a compromise.

The last EU budget summit ended without agreement between the 27 member states.

Failure to agree on the budget by the end of this year would mean rolling over the 2013 budget into 2014 on a month-by-month basis, putting some long-term projects at risk.

European Commission president Jose Manuel Barroso has urged leaders to negotiate "in a spirit of responsibility".

What is the UK's net contribution to the EU?

  • The UK is one of 12 EU members which makes a net contribution to the EU budget - meaning it pays in more than it gets back in EU funding.
  • But there are different figures for what the UK's net contribution is depending on how it is calculated.
  • The EU financial year runs from January to December. The Treasury says that in 2011 the UK net contribution to the EU budget was £8.1bn. But for the UK financial year, running from April 2010 to March 2011, the Treasury says the contribution was £8.91bn.
  • The European Commission has a different figure. In 2011 it says the UK's net contribution was 7.25bn euros (£5.85bn; $9.4bn).

"Further delays will send out a very negative message at this time of fragile economic recovery," he said. "The risk is that positions will harden and will be even more difficult to overcome."

Ahead of the summit Mr Cameron had a series of conversations with the heads of government of other countries also backing cuts to the EU budget, including Germany's Angela Merkel, Swedish Premier Fredrik Reinfeldt and Dutch PM Mark Rutte.

"There are like-minded countries and we are working with them but no-one is shying away from the fact that this is difficult," said a Downing Street spokeswoman.

"More spending and more debt is not the answer when competitiveness is really the issue in the EU. Why can't savings be found in Brussels when we have found savings here in Britain?"

The spokeswoman said it was "in our interest to do a deal" and insisted Mr Cameron was trying to reach agreement.

The prime minister met European Council President Herman van Rompuy on Thursday morning, before formal talks began.

The Commission - the EU's executive body - had originally wanted a budget ceiling of 1.025tn euros (£885bn; $1.4tn) for 2014-2020, a 5% increase. In November that was trimmed back to 973bn euros and later revised down to 943bn euros.

But with other EU spending commitments included, that would still give an overall budget of 1.011tn euros.

Commons rebellion

The UK, Germany and other northern European nations want to lower EU spending increases to mirror the cuts being made by national governments across the Continent.

A grouping led by France and Italy wants to maintain spending but target it more at investment likely to create jobs.

David Cameron has faced pressure to deliver a real-terms cut in EU spending, after the government's plan to push for a real-terms freeze was rejected by MPs in October.

Conservative rebels joined with Labour to defeat the government. The vote was non-binding but was seen as a blow to David Cameron's authority on Europe.

Since the last EU budget summit, Mr Cameron has promised an in/out referendum if the Conservatives win the next election.

The prime minister wants to renegotiate the UK's relationship with the EU before putting a new settlement to the British people.

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