Cameron seeks allies in bid to block Euro budget rise

Following a meeting with Dutch premier Mark Rutte in The Hague, Mr Cameron’s spokesman said the two men had seen “eye-to-eye” on the need for restraint in EU spending over the next seven-year budget period from 2014-20.

But in Rome, Italian prime minister Mario Monti was less receptive to Mr Cameron’s call for a real-terms freeze in the EU budget, saying the UK and Italian positions were “not perfectly coinciding” on the issue, which will dominate next week’s European Council summit in Brussels.

Mr Cameron and Mr Monti did, however, find common ground on the need to make progress in completing the single market, agreeing to write to European Commission President Jose Manuel Barroso to urge him to convene a Single Market Council.

Meanwhile in Brussels, talks on the EU budget for 2013 ran into the sand after MEPs boycotted a meeting with finance ministers from the EU’s 27 national governments in protest at member states’ unwillingness to supply £7.2 billion which the Commission says is needed to cover a shortfall this year.

The European Parliament is demanding a 6.8 per cent hike for next year, which has been stiffly resisted by governments including the UK, which wants a rise in line with inflation.

Mr Cameron is set for a clash with other EU states at a special summit on November 22 to set the budget framework for 2014-20, and has indicated he may be prepared to wield Britain’s veto to block a rise.

The Commission is seeking a trillion-euro budget for the long-term financial programme – equating to an 11 per cent rise and bringing the budget up to 1.1 per cent of the 27-nation bloc’s gross income. But the PM insists he wants at least a real-terms freeze, and if possible a cash reduction.

UK Financial Secretary to the Treasury Greg Clark, who flew to Brussels for the meeting, criticised the boycott, saying: “It is senseless that the only budget deal the European Parliament is interested in is one that massively increases EU spending – raiding Europe’s taxpayers.”

Speaking in Italy following talks with Mr Monti, Mr Cameron said: “At a time when both countries are making tough decisions about spending cuts, we can’t go on increasing spending in the EU.

“The EU has to live within its means. It’s in both our interests that there is a tough settlement in the budget.”

But Mr Monti made clear his priority was a budget for growth.

Dutch prime minister Mr Rutte is also opposed to the planned 11 per cent hike, but he is facing a showdown with Brussels over the Dutch rebate, which expires with the budget, and may face pressure to back down over spending increases to secure a continued payback for his country.