David Cameron made 'real difference over EU budget'

(Reuters)

David Cameron insisted today he "made a real difference" in EU budget negotiations despite criticism that he has failed to prevent any increase for next year.

The Prime Minister claimed victory in his bid to limit the rise for 2011 to 2.9%, despite previously saying he wanted to freeze or cut the budget.

He said today he had managed to sign up 12 other heads of government to a letter rejecting a proposal for the budget to rise by almost 6%.

At a press conference at the end of the European Council gathering in Brussels, Mr Cameron said the 6% proposal was "dead".

"The 2011 budget was not on the agenda for this Council," We put it on the agenda, we persuaded other countries to reject that 6% increase.

"Britain has made a real difference."A 2.9% increase is expected to see Britain's contribution to the EU budget grow by about £400 million a year.

Tory right-winger Lord Tebbit has described Mr Cameron's agreement to the rise as a "Vichy-style" betrayal.

But the Prime Minister maintained today that he had gained support for a position that would save UK taxpayers money.

"Three days ago, there was little focus on the EU budget and the need to protect our taxpayers.

"Britain has helped to put that vital issue on the agenda.

"Just as at home we inherited finances that were a complete mess, so too in Brussels we have inherited a budget deal completely out of touch with the situation we face across Europe.

"I believe that as a result of Britain's intervention the spotlight has now shifted to reining in the excesses of the EU budget.

"This will not be an easy debate - the Parliament, the Commission and some member states will continue to oppose us and it will take time.

"But I'm absolutely clear that Britain's national interest and our highest priority in Europe must lie in protecting British taxpayers from reckless spending in Europe.

"At a time when we are making painful decisions at home to put our economy back on track I will now allow Brussels to derail us."

Mr Cameron said he had also secured agreement that, in future, EU budget increases should reflect spending cuts in member states.

"We've prevented a crazy 6% rise in the EU budget, we've made sure the EU budget must reflect domestic spending cuts, and we've protected the UK taxpayer from having to bail out EU countries that get themselves into trouble," he said.

"At this meeting we've taken the first vital steps. There is a long way to go, but we have started a process and we will stick at it."

Asked if he could guarantee that the budget would not rise by more than the 2.9% as agreed with the other leaders, Mr Cameron said: "I am sure they are good for their word."

He also said that he continued to see himself as a "Eurosceptic" but added: "Obviously a practical, sensible and reasonable one at the same time."

The Prime Minister said the agreement that the EU budget must in future reflect the domestic spending cuts of members would apply to the important 2014-2020 spending round.

"This is I think incredibly important. It will have a direct impact on the pocket of the UK taxpayer. It is a significant prize," he said.

He added, however, that he was "not pretending that it's a giant El Dorado of a goldmine for the public".

The Prime Minister pointed out every 1% saved in relation to the European Parliament's 6% demand represented a £100 million saved of UK taxpayers money.

Mr Cameron continued: "The money we are spending in Europe should not be immune from the difficult decisions we are having to take (at home). This is a new principle, it's never been said before.

"This is the most important thing to Britain in Europe, the biggest priority for us.

"People want to say: can we please stopping sending so much of our money to Brussels? That is the key."

He declared: "We have succeeded quite spectacularly. it hot the phones yesterday before coming to the summit and stopped that (budget) juggernaut in its tracks."

The summit declaration that the EU budget in future must reflect efforts to cut spending in national finances "passes the common sense test ... it is logical, sensible, it reconnects the EU with the people it is meant to be serving," he said.

On the summit deal to look at the idea of reopening the Lisbon Treaty to provide a permanent bail-out scheme to cope with future Greek-style crises, the Prime Minister said: "The stability of the eurozone is in our national interest. That is why we support eurozone efforts to strengthen enforcement measures in all member states except the UK. We have put beyond doubt a British opt-out from eurozone sanctions."

He emphasised: "This proposal on changes does not affect the UK. We are not in the eurozone, we are not joining it and not subject to the penalties being discussed here.

"Any new Treaty change will not affect the UK. No powers are being transferred from Westminster to Brussels - we are just putting on a more formal basis the bail-out arrangements we have used so far for Greece. That is good for Europe and the UK."

Asked if it might nevertheless mean a referendum in the UK, he replied: "The key to a referendum (on the EU) is - are we proposing a transfer of power from Westminster to Brussels?

"If the answer is yes, there'll be a referendum. If no, then no."

A spokesman for EU budget commissioner Janusz Lewandowski said it was not certain that the rise would in fact be kept down to just 2.9%

Patrizio Fiorilli said it was likely there would be a compromise between the Council, calling for a 2.9% rise, and the Parliament, which is demanding 5.9%.

"What the Lisbon Treaty says is that we are now in a conciliation procedure between the Parliament and the Council, with the Commission acting as an honest broker between the two," he said.

"The situation is pretty simple now and hasn't changed much since yesterday, which is that the Council asked for a 2.9% increase of the budget and the Parliament asked for a virtually 6% increase."

He added: "Of course it has to be seen whether the Council's position will prevail, or the Parliament's, or whether more likely there will be a compromise between the two."

Mr Fiorilli insisted there was no guarantee either that future budget settlements would reflect members' domestic circumstances, as Mr Cameron claimed.

The spokesman said there was a "process" that had to be followed.

"The Commission puts a proposal on the table, afterwards the Council reacts to it, and after that the European Parliament reacts to it, and then they have to find a compromise," he said.