Coffee House

The Brussels budget imbroglio

26 October 2012

4:35 PM

26 October 2012

4:35 PM

The EU budget negotiation, now a month away, promises to be David Cameron’s next big European test. The Prime Minister has repeatedly declared that he wants to see the EU budget frozen at 2011 levels and that he’s prepared to use the need for unanimity to achieve that.

The Economist this week has a very useful scene-setter for the budget talks. It sketches the contours thus:

‘Countries are coalescing around loose (yet often divided) groups. There are the ‘friends of cohesion’: the net recipients of regional spending, such as Poland, Hungary and the Baltic states. And there are the ‘friends of better spending’: the net contributors, such as Germany, France, Britain and several northern European states. Less organised are the supporters of farm subsidies under the common agricultural policy who straddle both camps, including France, Spain, Italy, Ireland and Romania.’


As with so much in the EU today, what actually happens will depend on Germany. Given that Germany would suffer from a budget impasse, it will want to see a multi-year budget agreed. But as The Economist points out, Berlin’s position is complicated:

‘It says the budget should be capped at 1 per cent of the EU’s gross national income (reducing the commission’s plan by about €130 billion), but is being pulled in many a direction. As an advocate of austerity, it sympathises with the British. But as a big recipient of farm subsidies, and as the other half of the Franco-German partnership, it may collude with France to preserve agricultural spending. And it will want to keep supporting the EU’s ex-communist members around and beyond its eastern border.’

What’s for certain is that domestic politics will play a crucial role in the talks. Angela Merkel is acutely aware that she has an election to fight next year and is displaying a certain impatience with Cameron’s demands, hence the threat conveyed by the front page of Monday’s FT.

But Cameron knows that neither his party nor the country would welcome the EU budget increasing while cuts are made at home.

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Show comments
  • Augustus

    The prime ministers of the Ukraine and other independent former Soviet Eastern European states have recently signed a free trade agreement with Russia, which Putin described as a “a fundamental agreement that will form the basis of our economic ties and trade relations “. Cameron should do the same with America, Canada and Australia and leave the euro states to determine their own economic growth under an increasingly
    failing cloak of protectionism. Think big, and prosper!


    Message to OQS; get your heads outta your arses; there is major scandal breaking over the Pond, it’s called BENGHAZI. Cover it – you pusillanimous pricks!

    • Augustus

      Yes, why is the MSM not asking any questions? It’s certainly a very large scandal.
      Will the bus roll over Obama before the election? Let’s hope so.

  • Boudicca_Icenii

    Oh I think we know what will happen. Cameron will posture and preen. He will make a lot of noisy EUsceptic announcements of the “they shall not pass” variety. Then he will agree to a small REAL increase in the EU Budget and come back to the UK waving a piece of paper and declare that he has achieved “a marvellous deal” for the UK – not quite as good as he had hoped, but one that will ensure we get what we want from the EU”
    All b+llocks of course.
    Cameron is an EUphile. He will do whatever it takes to keep us in the EU.

  • Russell

    Perhaps the one thing which might influence Cameron and his EU friendly chums would be if UKIP wipe out all other parties in the European MEP elections. Now that would be lovely sight indeed.

    • True Bred Pomponian

      The EU elections are likely to be a referendum on the new settlement. So this will be the last say anyone will have on Europe and, indeed, the only way to vote no will be to vote UKIP.

  • Hexhamgeezer

    Couldn’t he tell THEM to stop banging on for a change?

  • Realist

    As an ex-pat observer of al this upheaval within and without the EU, I again pose the question no one has really answered to date – what exactly has Britain acheived by belonging to this organisation? I have yet to meet a Briton who is even remotely supportive of the EU so just who is benefiting from this membership?

    • RKing

      It’s all about big business….. cheap labour…… ability to move manufacturing without any barriers (Ford today classic example)…….. fiddle their taxes across borders and if anything goes tits up they can walk away and leave us working classes to pick up the bills….. banks being a good example and I’m sre their is more!!

      This is why our politcians couldn’t give a toss about Joe Blogs (pun not intended) because almost all of our leaders are in the pockets of large organisations.

      Or to quote an old song… “The working class can kiss their a***e…….

  • Barbara Stevens

    Cameron says he will use veto if they propose increases in spending, and rightly so. Why should we take cuts here to give away to a spendthrift Union? It has been suggested other members want to cut our rebate as well, and with the rise would take our contribution to £16 billion. He has said that is not on the table either. I just hope he keeps his nerve and stands by what he’s said; for we all know he’s not in the past.

  • 2trueblue

    Cameron has to get his act together on this issue, it is our money he is in charge of and frankly I’m not impressed with the direction it is going. Words are fine, deeds are the only true test of where the man is taking us. We have yet to see what he is really made of, and it has to happen soon.

    • Vulture

      Oh stop being so bloody ridiculous True Blue! If after 7 years on top you don’t know what Cameron is made of, you never will. But in case you have managed to miss it I’ll tell you: pure jelly. The slipperiest, pinkest jelly.

      • 2trueblue

        Slippery I agree with, the jelly bit I don’t. He is hardly on top. He did not get his majority last time and has a long road to convince the electorate that he deserves it. That said do you want the other lot?

  • Douglas Carter

    This is just pre-postured panto and playing to the gallery.

    The big picture is the coming treaty changes and the fairly plain fact that the UK cannot follow Merkel’s ‘Inner-tier’ which will obviate full and irreversible (…so they will claim…) political, economic and international integration. The early core-version USoE.

    The ‘outer-tier’ will not be politically sustainable for any Westminster party. Therefore, this is not where the action is. For once it was in Westminster, when Carswell highlighted that we should now be preparing for EU withdrawal – not really due to any maneouverings from EUsceptics in the UK or Westminster, the EU itself will be morphing into a form that not only can Britain not adopt, it’s also essentially the very version that the most dishonest and mendacious of EUphiles have promised was never intended.

    ‘Whether’ we leave the EU is now academic. ‘This’ particular incarnation of the EU will not longer exist in a few short years. Hence the babbling between Rumpoy, Merkel and Cameron is just a sideshow.

  • Ian Walker

    A simple answer – those countries which vote to increase the budget have to increase their contribution to it.

    See how many greedy, grubby hands go up when you put THAT to the vote.

    • chudsmania

      Best comment on here so far by a long way.

      • Trev



      Ian Walker puts his finger simultaneously on both the selfish core of socialism and its innate regressiveness.

    • Barbara Stevens

      I agree, you should write to Cameron and suggest it, he might think about challenging them. Good comment.

  • Frank P

    The conalition should remove Britain from the crooked, corrupt cabal of communistic c-c-c-c-con-merchants immediately.

    It will not!

    One of the erstwhile garlic-reeking, Euroclique Prime Ministers has been given a long prison sentence today. Who thinks he will serve it? Don’t see a hand up in the house. Frankly most of our own Prime Ministers for the past God-knows-how-many years should also be banged up – for the treasonous offence of conspiring to surrender the sovereignty of the United Kingdom, in addition to theft from the taxpayer to further the European ‘project’.

    There are but two solutions; build up the improving vote for UKIP; or speed things up even further by civil insurrection on the streets of Britain to remove the traitors from parliament summarily, before they auction off parcels of our native land to the highest bidders. Our major cities have already been flogged off to Chinks, Ruskis or A-rabs.

    And I defy anybody to point to one word of this comment and declare it hyperbole. In fact it’s understatement. Wake up Britain! Or at least wake up England! And if it’s too late for that, then wake up East Anglia. Are there no patriots left. Are there even any men left with testicles bigger than peanuts??

    • HooksLaw

      one word of hyperbole?

      how about ‘speed things up even further by civil insurrection’ ?

      ‘garlic-reeking’ was a given… obviously.

      • FRANKP1

        Wipe that that bouillabaisse off your chin.

  • Bruce, UK

    Article 50 or Ever Closer Union. One way or another the Prime Invertebrate will have to “Bang on about Europe”. Shame, eh?

  • james102

    Cameron is committed now; he has little room for manoeuvre.

    This seems a step by step withdrawal from full membership as the more the argument is opened up the less the benefits of our continued membership are revealed.

    The argument can’t be made in economic terms, yet this is how it has always been sold to the UK’s public. Is it any longer in the USA’s interests? Is it any longer in Big Business’s interest?

    The last argument seems to be we would need to accept regulations in order to continue trade, yet we run a massive deficit with the rest of the EU, so suggesting Germany would stop selling us cars if we refused to implement the Working Time Directive should be interesting to hear.

    Cameron is not exactly a master strategists, as Fraser Nelson’s article in today’s Daily Telegraph on how he has allowed Quangos to be stuffed with Labour supporters shows ,so this could turn into the worst crises of his leadership.

    • HooksLaw

      Nelsons column (!!) overstates his case.

  • Vulture

    It’s interesting that the two organs supposedly representing Britain’s financial and business interests, the FT and the Economist, have long been passionate supporters of the EU. They have now become Frau Merkel’s propaganda arm within the UK. Their role as collaborationists in the Fourth Reich is as shameless as that of Gringoire and Je Suis Partout during the German occupation of France

    • james102

      The Economist seems to have reduced its unconditional support recently. It seems more critical of the policies being pursued by the EU.

    • Dimoto

      Despite the eyelash fluttering, Merkel has never supported Cameron in anything, and hopefully he has seen through her deceitful blarney. She has her agenda (getting someone else to pay for the German project) and is trying the usual German approach of crude brow-beating.

      She doesn’t seem to have noticed that we don’t depend on her for funding, are not part of her gang, and have been badly damaged by the Merkel-Schaeuble horlicks for saving the Euro project.

      If only Cameron would give this dithering old bat a straight from the shoulder Anglo-Saxon statement of British interest !

      He needs some practice, because it is quite conceivable that next year he will face TWO socialist fantasists across the table.

      • Daniel Maris

        Blarney? She’s not another politician claiming to be Irish is she?

  • Andy

    Cameron has no choice: he has to veto ANY increase in the budget. Why does the EU think that when National Governments are cutting spending that they alone should be allowed to go on wasting taxpayers money ? They could start by getting their accounts in order so they can be signed off by their own auditors. Arrogant, incompetent and stupid.

    • Mirtha Tidville

      Arrogant, incompetent and stupid are excellent descriptions of the EU and it is these very `qualities` that are demanding more and more money be allocated to their frauds/ corruption/backhanders/largesse etc……If we had a proper PM something might be done about it, but Dave I`m afraid is about as strong as that other EU loving windbag Kinnock

      • 2trueblue

        Well, we had Liebore with 2 of their PMs and they did little for us over 13yrs. One gave away our rebate and both denied us our promised referendum, so neither helped our position.
        Cameron has to declare where he is going to take us and frankly he is not getting the message. How the electorate communicates that without an election or referendum I don’t know. Those of us interested are called all sorts of names and that has to change. We need something that gives our government a clear indication of what we think. We have not been given the opportunity to do so and that is what is so appalling. The LibDums are a real problem as they are totally wedded to the EU.

        • HooksLaw

          The LibDums are so wedded to the EU because they never see themselves in power in the UK. Even now, when they ARE in power they still behave like an opposition. With the various numbers of minority parties in european countries its easy to see why they support institutions like the EU.

    • Archimedes

      If he vetoes it, then the budget will rise by 6.8%: Labour would destroy the Conservatives in that situation. He needs to make sure he gets a deal.

      • alexsandr

        he stops any payment to the EU until the accounts pass audit, then refuses to pay any increase. What are they going to do? chuck us out?

        • Archimedes

          What they will do is they will be difficult and uncooperative, and that will mean further diplomatic incidents, and that will give the Europhiles an opportunity to portray Eurosceptics as impractical, incompetent and xenophobic – and that will weaken the position of Eurosceptics.

          One veto looks like Cameron is standing up for the UK: start deploying them at every meeting and the public will start to ask what’s going on, and what his angle is – Labour will make sure that they do.

          • james102

            This really depends on whose viewpoint you identify with in the first place.

            Neither side really cares what the other’s attitude is. One uses “xenophobe” the other “collaborators”.

            Labour strategists are too astute to allow the party to be seen as anti-British and at the moment anti-British and Pro-EU is the same thing as far as the majority of the electorate are concerned.

            I think it is now inevitable we will leave; it is really about how and when.

            • Archimedes

              Yes, but most people identify more strongly with the short-term than with Euro-scepticism, and exit is a long-term decision with significant short-term downsides. Winning that argument will be trickier than you might think, and it would be a mistake to play into the hands of anyone that wants to accuse you of being ideologically biased with stars in your eyes.

              • james102

                We have never really had an honest debate on the EU as the patricians did not think the plebs were ready for it, so it has always been presented as an economic argument about trade.

                Now we need an open debate about the next stage of the EU which is towards a full political union.

            • HooksLaw

              How and when? When the Eurozone countries forge a new and more integrationalist treaty. Even if we wanted to be a part of it and we don’t, there would be a referendum which would probably be lost.

              This would lead us to be in a situation virtually the same as Norway in the EEA.
              The question would be just how distant our relationship with the EU would be.

              And the question people like you have to ask is do you want to see Labour negotiating that relationship.,

              • james102

                It can’t be like Norway because the EU is Norway’s biggest customer and they run a surplus of trade with them whereas we run a deficit and account for about 25% of their trade.

                You could say in trading terms we are mirror images.

                Do you think Germany would refuse to sell us cars and washing machines if we did not sign up to the Working Time Agreement ?Could they prevent us sourcing cheaper food outside the Common Agricultural Area? Could they impose quotas for various groups on the boards of our companies? Could they insist we pay into their budget?

                In the present economic situation nothing that slowed exports from France and Germany into the UK would be allowed. Even the low World Trade Tariff ,which would be the fallback position, would hurt them.

    • Heartless etc.,

      “Next big test” ???? The wretched H2B is on trial all the time with the many of us on here who heartily detest his flaccid approach to the EUSSR and those in the EUSSR who encourage him.

      We see little or no progress towards improvement – apart from the weasel words that we know, by now, mean nothing.

      • HooksLaw

        ‘weasel words’ – now there’s ironic