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02/12/2016

Cameron fumes at EU request for €2.1bn budget top up

UK & Europe

Cameron fumes at EU request for €2.1bn budget top up

David Cameron, UK Prime Minister, arrives at the Council meeting in Brussels, Oct. 23, 2014 [European Council/Flickr]

The United Kingdom received a surprise demand from the European Commission to contribute an extra €2.1 billion to the EU budget, owing to the good health of the British economy. 

The demand has overshadowed a meeting of EU leaders in Brussels last night.

British Prime Minister David Cameron is trying to garner support from other leaders to challenge the surcharge, which is meant to reflect the strengthening of the UK’s economy since the last time member states contributions were calculated.

The EU demand was ironically backed up unintentionally by Cameron himself, who expressed worries about Europe’s gloomy economic prospects as he walked in for the first day of the summit yesterday.

“Britain’s economy is growing well – we’re creating jobs and seeing new businesses start up,” Cameron declared as he walked into the meeting. “But we’re not immune to economic problems elsewhere in Europe and there are some worries and concerns about the state of other European economies, so I’ll be wanting to hear about plans others have to make it easier to employ people, to deregulate, to reform, to make sure that European economies grow so the British economy can continue.”

http://www.euractiv.com/video/cameron-worried-about-state-european-economies-309446

Britain is facing by far the largest contribution request, adding almost a fifth to the UK’s annual transfer, according to the Financial Times.

The request for additional funding came at an awkward time for Cameron, who faces an election in May with the anti-EU UK Independence Party cutting into his Conservatives’ share of the vote. Critics fear that the Prime Minister will find himself forced into playing partisan politics with the EU’s request, given the political capital that will likely be made out of it by Nigel Farage.

A British spokesman at the summit said Cameron discussed the issue with his Dutch counterpart Mark Rutte, who also faced a large bill, to be paid by 1 December.

“This is money the European Commission was not expecting and does not need, and we will be working with other countries to do all we can to challenge this,” the British spokesman said.

Patrizio Fiorilli, a Commission spokesperson justified the additional demand on Britain, as being part of normal adjustments to the EU budget.

“Britain’s contribution reflects an increase in wealth, just as in Britain you pay more to the Inland Revenue if your earnings go up,” Fiorilli said.

Cameron is understood to be furious that France is being rewarded for its failing economy with a payout of €525.3 million.

A Downing Street source told the FT, “It’s not acceptable to just change the fees for previous years and demand them back at a moment’s notice.”

Impact on Brexit?

British tabloids described the demand as a punishment for the UK’s relative economic success to the rest of Europe.

It comes weeks before the high profile by-election sparked by Conservative MP Mark Reckless’ defection to UKIP, and the balance is payable just days after the vote.

The 20 November by-election results will be scrutinised for signs of traditional Tory voters moving over to the hard-line Eurosceptic party.

A victory for UKIP will up pressure on Cameron to toughen his stance on the EU in the run-up to next year’s general election in May. The Tory leader has promised a referendum on the UK’s EU membership in 2017.

UKIP leader Nigel Farage told The Daily Telegraph, “Every single strategy the Prime Minister has adopted on the EU has failed. He now has two choices: to hold a referendum before the next general election or to lose the election.”

Further Reading