EU budget unlikely to reach a deal

This article was last updated on April 16, 2022

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Prime Minister, David Cameron has today warned EU leaders to stop “tinkering” with Europe’s budget and make real savings in line with national austerity efforts as they fought to rescue a summit for setting a seven-year budget.

Arriving at the Brussels summit for a second day of negotiations on Europe’s spending priorities for 2014-2020, Mr. Prime minister made an effort to secure the British rebate and persuaded the other leaders to be more radical.

Mr. Cameron asked the EU officials: “It isn’t the time for tinkering. It isn’t the time for moving money from one part of the budget to another. We need unaffordable spending to be cut. That’s what’s happening at home and that’s what needs to happen here.”

But he had to face strong opposition from French President Francois Hollande, who won support for an eight billion euro increase in farming subsidies. After 24 hours, the 973 billion euro planned budget had only been reduced by a billion euros.

German Chancellor Angela Merkel had ruled out the option of striking an agreement between the 26 other countries and leaving Britain in the cold. She was reported to be unimpressed at Mr. Cameron’s rigid demand for cuts, but is backing his reduction call in the European Commission’s own budget for administration.

Earlier, both Mrs. Merkel and Mr. Hollande played down hopes of a breakthrough on the budget, covering 2014 to 2020. Mrs. Merkel delivered her doubts to agree on a deal.

Mr. Cameron is currently demanding potential cuts, including six billion euros worth to the salaries, pensions and perks of officials working for the commission. 

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

According to analysts’ opinion, that could make things worse for U.K as 2013 budget is bigger than the preceding years of the 2007-2013 budget round.

The U.K. government could then end up with an EU budget higher than what it is negotiating now.

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