Danish prime minister Helle Thorning-Schmidt has said she will block talks on the 2014-2020 EU budget unless she is offered a rebate of 1 billion Danish crowns (€134 million).

The Danish government has already included the anticipated rebate in its tax reform plans for 2013, and the package would lack coherence without it, she said.

"We are going to get our rebate, and if we don't get our rebate, then we will have to use the veto. It's very, very simple," the prime minister told the Danish parliamentary committee on European affairs Thursday (25 October), according to the news agency Ritzau.

Denmark is one of the biggest net contributors to the EU budget, in proportion to the country's relative small size.

In 2011, it gave €2.12 billion to the EU's coffers, collecting €437 million in customs and farm trade duties on the EU's behalf, of which it retained 25% as an administrative fee, according to EU figures on country contributions.

Other EU member states with big net contributions such as Britain, Germany, Sweden, The Netherlands and Austria already get rebates in the form of lump-sum payments or reduced VAT call rates (>> Read European Commission summary of national compensation mechanisms).

In practice, Copenhagen argues that it funds such reimbursements.

Rare EU veto

The Cypriot presidency is now finishing a draft proposal for the 2014-2020 budget, in close cooperation with the president of the European Council, Herman van Rompuy. Nicosia has noted the noises coming from Denmark.

"We are taking these statements from the membership countries into account. No doubt about it," the spokesperson Nikos Christodoulides said.

Every EU member state must agree on the seven-year budget, and if Denmark blocks talks, it cannot be adopted. The veto is thus a consequential tool for a member state to use.

British Prime Minister David Cameron has also warned that he could veto the EU budget for 2014-2020 “if necessary”, and that measures would be taken to make sure that immigrants from EU countries would not take the jobs of fellow Britons.

Whether Denmark will get a rebate or not, the spokesperson declined to say.

"No one knows at the present time," Christodoulides said.

Support from Danish parliament

The Danish prime minister's statements were immediately backed by other parties in the Danish Parliament.

"This is totally new and really positive," said Nicolaj Villumsen, rapporteur on EU affairs for the EU-critical party the Red-Green Alliance.

The Liberal Alliance party's EU rapporteur, Merete Riisager, also welcomed Thorning-Schmidt's comments.

"It's about time Denmark put its foot down. It is insane that countries have to make cuts while the EU keeps spending," Riisager said. "It would delight me if we finally have a prime minister who can say no to the EU."

The leader of the eurosceptic Danish People's Party, Kristian Thulesen Dahl, was also pleased by the news.

"I think it's absolutely incredible if Thorning-Schmidt through this message would guarantee that we get this in every way reasonable rebate," he told the newspaper Politiken.

The Liberal's EU rapporteur, Lykke Friis, warned the prime minister's message could affect Denmark's influence on budget discussions, and complicate the country's diplomatic situation.

"She's playing a risky game," Friis added.

>> Read EurActiv's LinksDossier: EU budget 2014-2020: The €1 trillion deal