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PM 'has problem' with EU leaders

David Cameron has "a problem with the other Prime Ministers" of the European Union over the demand for an additional £1.7 billion from the UK, European Commission president Jean-Claude Juncker has said.

Mr Juncker said he would not accept "unjustified" criticism of the Commission over the contributions, which he said were a matter between the 28 member states, some of which are winners and some losers.

Mr Cameron has said he will not pay the £1.7 billion by the deadline of December 1, and Chancellor George Osborne will meet finance ministers from the other 27 EU states in Brussels on Friday to begin a review of the figures demanded by the UK and other losers, such as the Netherlands and Italy.

At his first press conference as president, Mr Juncker did not hide his irritation at brickbats directed at him over the contributions row, including Italian PM Matteo Renzi's threat to inform the public of the cost of the Commission's "palaces" in order to lay bare Brussels profligacy.

In an apparent swipe at Mr Renzi and Mr Cameron, the Commission president yesterday told the European Parliament that he did not like the way that "certain prime ministers" behaved after the demands for additional cash were revealed at last month's European Council summit.

"I took notes and when I compared what they had said inside the room with what they said outside, they did not tally up," Mr Juncker told the Parliament.

Today he told reporters in Brussels: "I said yesterday at the Parliament that I am not the leader of a gang of anonymous bureaucrats, I am the leader of 28 political commissioners. We are not bureaucrats, we are not civil servants, we are political people and therefore when anyone tries to take apart the Commission before it has even started its work, I will react.

"But I have no problem with Mr Renzi, who I appreciate greatly. I don't have a problem with Mr Cameron. Mr Cameron has a problem with the other Prime Ministers."

Britain - which is facing by far the biggest surcharge - has been seeking allies among other EU states for a rethink of the contributions, but is likely to face stiff resistance from states which gain, including France, which is in line for a one billion euro (£788.7m) rebate, and Germany, which stands to receive 779 million euro (£614m) .

In his press conference, Mr Juncker warned that he will not take criticisms from leaders of the 28 EU states lying down.

"I will not hide from you that I have a firm intention to react to all unjustified criticisms directed at the Commission, wherever they come from," he said.

"I am a not a man who trembles before Prime Ministers or other senior figures. I accept people criticising the Commission, because I myself had many criticisms to make when I wasn't yet Commission president.

"But I do not accept unjustified criticisms, everybody needs to know that. There will no longer be attacks on the Commission without a reaction."

Responding to Mr Juncker's comment's, Mr Cameron's official spokesman said: "Does the Prime Minister always put the interests of British citizens and British taxpayers first? Of course. He is going to keep doing that.

"But he works very closely with his EU counterparts."

The spokesman dismissed suggestions that Mr Cameron had said different things in public and in private at the European Council summit, telling reporters: "I don't think any of the Prime Minister's EU counterparts were in any doubt about his strength of feeling on this."

Responding to reports that EU officials had suggested the UK could pay its £1.7 billion surcharge in a series of interest-free instalments, Mr Cameron's spokesman said: "The Prime Minister has made the point about the unacceptability of the scale of the bill that was presented."

Mr Osborne has said he is "confident" of securing a cut after Mr Cameron declared the UK would not pay "anything like" the sum being demanded by the European Commission - which critics claim amounts to a tax on Britain's economic success.

The row came as the European Court of Auditors (ECA) issued another scathing assessment of the handling of the EU £117 billion budget.

In a new report, the ECA said that between 3.5% and 5.9% of the EU budget - somewhere between £4 billion and £7 billion - was wrongly spent.

And it complained that the entire 2007/13 budget process was "too focused on just getting funds spent and needs to place more emphasis on achieving results" - because of a "use it or lose it" approach.

Systems for choosing which projects to support "focused first on disbursing the EU money available, secondly on complying with the rules, and only then - and to a limited extent - on results and impact", it said.

"The European Commission and the member states must pay more attention to how they spend our taxpayers' money," ECA president Vítor Caldeira said as he presented findings that will intensify pressure to further cut EU spending.

Mr Cameron's spokesman said: "Is this further evidence of the importance of going further in reforms of the EU and EU budget accountability? Absolutely it is.

"It is one of the many reasons why the Prime Minister has sought to reduce the EU budget."

The ECA found there had been no progress since last year in tackling the vast sums being paid out in breach of the rules, with the worst-affected areas being regional policy, energy and transport, rural development, environment, fisheries and health.

It welcomed Commission efforts to track down and deal with errors, suggesting the rate would have been almost a third higher without them, and noted that spending jointly controlled by member states was more error-prone than that overseen by the Commission alone.

Typical errors, it said, included subsidiaries of large firms wrongly claiming cash meant for small businesses or extending public contracts without any chance for other firms to bid for the work.

Mr Cameron's hopes for support in his effort to clamp down on the number of EU migrants coming to the UK were dealt a blow with two European counterparts warning against efforts to change freedom of movement rules.

Finland's Alexander Stubb told The Financial Times: " We need to understand what the UK wants and the UK needs to learn where are the limits of other member states."

He added: "Whether some kind of arrangement can be found, I don't know. But to start putting restrictions on free movement in one way or another I would find quite difficult."

Mr Stubb said European principle of free movement of goods, money, services and people was "holy" and the appetite for a major treaty change was "quite meagre".

Swedish prime minister Stefan Lofven al so criticised Mr Cameron's approach, telling the newspaper: "It's not much of an internal market if we develop a market together and then one or two countries say we want to change this. We might have other things we want to change."

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