Cameron announces EU budget freeze

David Cameron today announced he has joined forces with France and Germany to demand a real-terms freeze in the European Union budget until the end of the decade.

The Prime Minister will tomorrow publish a joint text with French President Nicolas Sarkozy and German Chancellor Angela Merkel and other European leaders setting out their demand for restraint in EU spending.

They will insist that the Union's budget should rise by no more than the rate of inflation over the period 2014-2020.

Speaking in a press conference at the end of the European Council summit in Brussels, Mr Cameron said that the text would put down "a firm marker" of their determination not to allow the budget to swell.

The Prime Minister said he had secured a "clear and unanimous agreement" that Britain would not be "dragged into bailing out the eurozone" as part of a new stability mechanism to be introduced in 2013.

The UK would still be part of the existing emergency mechanism until then, but that had been a commitment entered into by the former Labour government and "we have to live with it", he said.

Mr Cameron said tomorrow's text would cover negotiations on the EU budgets for 2012 and 2013 as well as the longer-term perspective for 2014-20.

"What I am doing, together with our key partners in Europe, is putting down a firm marker for these negotiations," he said.

"All around Europe, countries are tightening their belts to deal with their deficits. Europe can't be immune from that.

"We want to see real budgetary restraint for 2014-20 - the time of the next financial perspective. That is why the text we will publish talks about at least a real-term freeze in the budget for that period."

He described the agreement between Britain, France and Germany as "incredibly significant" and a "huge achievement".

"This is Britain, France and Germany - the three biggest countries in the EU - standing together united on the need for stopping the EU budget getting out of control," he said.

Mr Cameron admitted he would have liked the 2011 budget increase to have been lower than the 2.91% which has been agreed, and would be working for a lower rise for 2012.

Britain had pushed for a freeze in 2011 but was outvoted by other countries.

"Even 2.91% means a lot of extra money going from Britain to Brussels, so I want us to do even better in 2012," he said.

The Prime Minister went on: "You have got a new British Government that has taken the initiative on spending, has galvanised other European leaders and is having an impact. You are seeing a different (UK) approach that is yielding results."

He said the joint campaign to freeze future EU spending was a sign of "old friends coming together in a new and positive way".

It was a significant development: "I think it is a huge achievement to get the three (UK, France and Germany) together."

But shadow foreign secretary Yvette Cooper said: "David Cameron has achieved little for Britain.

"The EU budget is still going up by 2.9% this year, and there is no serious plan to get the budget down in future years.

"There is no agreement to even discuss serious reforms on things like the Common Agricultural Policy that could cut the budget."

She accused the Prime Minister of "desperately trying to appear tough in front of his eurosceptic backbenchers at home, but is failing to appease them. He has offered nothing of substance other than agreeing to give more money to the EU."