British Prime Minister David Cameron 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.
Speaking on the Andrew Marr show on BBC TV yesterday (7 October), the first day of the Conservative Party conference, Cameron said the EU budget was a "classic example” of where the UK “should probably start to draw new lines".
Cameron stated he would block talks if "massive increases" in the budget were proposed or if a deal that "does not have proper control" was put forward.
"I sat round that table – 27 countries, 26 of them signing up to a treaty and I said, 'This is not in Britain's interests, I don't care how much pressure you put on me, I'm not signing, we're not having it. … They know I'm capable of saying no and if I don't get a good deal I'll say no again."
The UK veto incited the EU to move forward on the fiscal treaty without the UK and the Czech Republic, which also refused to sign it. The fiscal compact treaty, which remains open for signature to all, will enter into force following the ratification by 12 of the 17 eurozone countries.
Special budget for the eurozone
Cameron also lent his support to a proposal for two EU budgets, one for the eurozone and another for Britain and other nations outside the single currency.
“There will come a time I believe where you're going to need to have two European budgets – one for the single currency, because they're going to have to support each other much more, and perhaps a wider budget for everybody else."
The idea of a special budget for the eurozone was first spelled out by European Council President Herman Van Rompuy in his recent “Issues paper on completing the Economic and Monetary Union”.
In the meantime, the idea of a second budget for the eurozone has been gaining supporters in the 17 countries sharing the same currency, including France and Germany.
The Financial Times Deutschland reported on Monday that European diplomats are discussing the possibility of a separate budget to improve monetary union in the euro to the annual amount of around €20 billion. In comparison, the annual EU budget is approximately €130 billion.
Germany reportedly supports the idea as a way of coordinating transfers among member states, and France is also in favour, which in terms of eurozone decision-making means it has substantial momentum.
The idea of a second budget for the eurozone is expected to be discussed among eurozone finance ministers at a meeting in Luxembourg on Monday (9 October). The meeting will mark the launch of the European Stability Mechanism (ESM), the €500-billion rescue fund of the eurozone.
Eurozone ministers are also expected to discuss the financial situation in Spain and Greece. The next day, the finance ministers of the EU will hold their meeting. On 18-19 October EU leaders will meet in Brussels for a summit, at which Van Rompuy is to present his interim report on finalising the economic and monetary union.
Visas for Bulgarians, Romanians?
Another area where Cameron could push harder is immigration – a topic by which British political parties often gain votes by taking a tough stance.
"Two weeks ago, I visited two factories in a week, and I asked the question how many people do you employ from other EU countries, what's the balance? In one, it was 60%; in the other it was 50%," he said. "Now, heaven's above, we have got so many unemployed people in our country," he exclaimed.
Cameron’s statements were confirmed by his Home Secretary Theresa May, who said in an interview with the Daily Mail said that visas could be introduced for migrants from some EU countries, while others would still be able to go the UK freely.
May spoke of “abuse of freedom of movement at EU level”, referring to the lifting of work restrictions on Bulgarians and Romanians from 31 December 2013.
When Bulgaria and Romania joined the EU in January 2007, a maximum period of keeping work restrictions of seven years was agreed in their Accession Treaty. Most EU countries have since lifted the restrictions, the UK being among the countries that still require Bulgarian and Romanian citizens to have a work permit. The others are Austria, Belgium, France, Germany, Ireland, Luxembourg, Malta and the Netherlands.