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Cameron hails EU budget cut 'first'

David Cameron has hailed a real-terms cut in the European Union's next seven-year budget.

The Prime Minister said the British public "can be proud" that the credit limit for Brussels spending had been brought down for the first time in the history of the EU.

After hours of tortuous negotiations, the latest EU summit broke up with an agreement that spending for 2014/2020 would be 908 billion euro (£773 billion).

Mr Cameron said spending for 2014-2020 would be 24 billion euro lower than during the last seven-year period. "I think the British public can be proud that we have cut the seven-year credit card limit for the European Union for the first time ever," he told an end-of-summit press conference. Mr Cameron said the final deal was 80 billion euro (£67 billion) lower than the original proposal on the summit table in November, when talks collapsed without agreement.

The European Commission had pressed for a seven-year budget increase from the current 943 billion euro (£797 billion) for the financial period 2007-14 to 988 billion euro (£835 billion). But hours of hard talking got that down to 908.4 billion euro (£768.2 billion) - an overall reduction in spending for 2014-20 of 35 billion euro (£29 billion). If a deal had failed this time, and the EU budget had to be frozen at 2012 levels until a deal could be done, the saving would have been less, at 24 billion euro (£20 billion).

What resulted was a "budget for growth", boosting energy projects, research and development, while still helping poorer member states - all the while leaving the British budget rebate intact. "Attempts to undermine the British rebate have been made again and again recently, on every side," said Mr Cameron. "I have fought off these attempts and the rebate is safe."

But he admitted Britain's EU contributions would rise despite the budget cuts and the rebate - because, said the Prime Minister, former Labour PM Tony Blair gave away part of the rebate in a previous budget negotiation, which included giving up the rebate on the parts of the British payment going towards restructuring in poorer member states. That was one reason why it was important for Mr Cameron to cut the overall budget figure - because the lower the maximum, the lower any British increase would be.

Overall, said Mr Cameron, the accord was "good for Britain and for Europe too - good for taxpayers in Britain and Europe". The real-terms cut in the long-term budget was the first since the EU began preparing seven-year spending cycles, and he could "look people in the eye" and declare a good deal. He warned MEPs, who have the power to veto the budget, to approve the package. European Parliament president Martin Schulz has announced the European Parliament vote will be conducted by secret ballot to stop governments pressuring their MEPs to back the deal.

The Prime Minister said it was "slightly baffling" that MEPs would invoke a secret ballot, saying it was "especially important to see what is happening" when politicians deal with money. But he was happy to make the case for the deal in the Commons: "I look forward to making the arguments - and I look forward to Labour's reaction." Asked about claims that he was isolated in Europe, Mr Cameron admitted he had been isolated when he alone rejected a treaty change at a summit 14 months ago - but not now: "Nobody comes to summits wanting to be on their own, having to stand up without allies. That was necessary in December 2011: I could not get the safeguards I wanted (against economic interference in the UK)." He went on: "No one should be frightened about (summit) isolation, but you should always try to work with allies to make sure taxpayers get the best deal".

Shadow chancellor Ed Balls: "At a time when taxes are being raised and services cut at home it cannot be right that the EU budget should rise in line with inflation. We will need to look very closely at the detail in the coming days and weeks, but if today's deal does result in a genuine real terms cut in the EU budget then the Prime Minister will have delivered what Labour and Parliament demanded."


From Belfast Telegraph