‘Long way to go’ on EU budget deal

Mr Cameron was the first of the EU’s 27 leaders to meet summit chairman Mr Van Rompuy and European Commission president Jose Manuel Barroso ahead of what are expected to be marathon negotiations which got underway in the Belgian capital last night.

Arriving in Brussels, the Prime Minister insisted that any rise in European Union spending was “quite wrong” and said he would be fighting “very hard” to secure a good deal for British taxpayers and to keep the rebate negotiated by Margaret Thatcher in the 1980s.

“These are very important negotiations. Clearly at a time when we are making difficult decisions at home over public spending, it would be quite wrong – it is quite wrong – for there to be proposals for this increased extra spending in the EU,” he said.

“So we are going to be negotiating very hard for a good deal for Britain’s taxpayers, for Europe’s taxpayers, and to keep the British rebate.”

Mr Cameron is calling for a real-terms freeze, or even a cut, in the budget for 2014/20 – the sole subject on the agenda for the summit which started last night and may run into the weekend.

He has welcomed proposals from Mr Van Rompuy which would deliver a small real-terms cut in EU spending commitments, but has made clear he is unhappy with other details of the package, which demands a reduction in the £2.9bn UK rebate.

After his half-hour meeting with Mr Van Rompuy, a Downing Street spokesman said: “The Prime Minister set out our position that while the latest proposals were a step in the right direction, they did not go far enough and that we think more can be done to rein in spending.

“He also set out the UK’s position on the rebate – that it was fully justified and we did not support any changes.

“It was clear that there was a long way to go before we had a deal that reflected the difficult decisions being taken by member states.”

A pre-summit compromise is already on offer – a seven-year budget “envelope” of 940bn euros (£756bn) for 2014/2020, a cut of nearly 5bn euros (£3.8bn) compared with the 2007/2013 ceiling. The Prime Minister’s allies for budget belt-tightening, including Sweden and the Netherlands, have both demanded hefty financial cuts.

Germany, France, Finland and Austria want to freeze the maximum Brussels can draw from member states every year – leaving plenty of scope to argue over the actual spending figures within the ceiling.

However 15 countries, led by Poland, are backing budget increases, not least to preserve the scale of cash aid they receive as “net beneficiaries” from the EU kitty.

The European Commission insists a spending increase is necessary – a 5.9 per cent hike compared with 2007/2013, not least to pay for policies already agreed by member states.

One EU official said: “EU governments are telling us to do more, including financing new policies, funding EU expansion – Croatia is a member from next June – and creating jobs and growth. We therefore need a workable budget and if there have to be cuts, they should be in areas that are not contributing to the jobs and growth agenda we need.”

A deal could take days to secure. One official said: “Mr Van Rompuy will keep the leaders talking as long as it looks likely that there can be agreement.”