The man chairing today’s crunch European Union summit on spending has insisted that a “real-terms freeze” is on the negotiating table.
If spending doesn’t budge, then a deal isn’t going to be doable
European Council President Herman Van Rompuy effectively challenged David Cameron to take the deal on offer when Europe’s leaders gather in Brussels.
Talks on the Euro-budget for 2014-20 collapsed in November, with Cameron insisting on “at worst a freeze, at best a cut” in the size of the EU kitty to be funded by member states until the end of the decade.
The Prime Minister’s spokesman repeated Cameron once again remained ready to block a deal if he does not secure at least a real-terms freeze in the Budget, to reflect the cuts being made at national government level and in households across Europe during the crisis.
Van Rompuy issued a pre-summit statement which, without offering any new Budget figures, insisted the available deal amounted to a “real-terms freeze”.
He said the final deal must deliver a Budget providing sufficient funds to tackle the most urgent problems, such as youth unemployment. Van Rompuy said he would be proposing a new youth jobs initiative “of several billions of euros”.
The Budget also had to be “an engine for growth and jobs” which would require real-terms increases in spending on research, innovation and education.
But despite these planned rises, the next EU budget had to be one of “moderation”, Van Rompuy admitted,to reflect the savings efforts of the member states.
He went on: “That is why – for the first time ever – there will be a real-terms cut, compared to the current Budget.”
The problem with a Budget approaching €1,000 billion over seven years and with different calculations for “payments” and “commitments” is assessing what actual figures amount to a genuine reduction in spending across Europe compared with the last seven years.
The figure on the table and rejected by Cameron when the last talks broke down was close to £760 billion, and the Prime Minister is seeking more reductions.
His spokesman said: “We are working with a number of our allies, who all believe that spending needs to come down further. If it doesn’t budge, then a deal isn’t going to be doable.”
Countries including Sweden, the Netherlands, Denmark and Germany are also opposed to increases in the EU Budget, said the spokesman. Cameron and German Chancellor Angela Merkel confirmed their agreement on the issue in a phone call on Sunday.
Asked whether Cameron should refuse a deal if he could not get an agreement on a freeze or a cut, Labour leader Ed Miliband said he would have to “see what he comes back with”.
Miliband said he was in favour of a real-terms cut in the Budget, but accused the prime minister of failing to build the necessary alliances: “I think the Prime Minister should have been building alliances over the last two years in relation to the Budget. I don’t think he’s been doing that,” he said.
Earlier, French President Francois Hollande made a thinly-veiled swipe at Britain for demanding cuts in the EU Budget without making concessions at the same time.
In a speech to the European Parliament, Hollande said “there are those who want to see cuts, others – possibly the same – who want guarantees on their own rebate”. He also suggested that the UK should not be allowed to dictate terms to the rest of the EU.
“I have been told a solution cannot happen with Britain. But why should one country decide for 26 others? Indeed, we could have agreed at the last European summit,” Hollande said.
One EU official yesterday afternoon predicted that, if the summit fails to agree a Budget, another attempt may not be made until 2015.
In the meantime, existing spending levels would be “rolled over” month by month until a new Budget deal is done.
It is not the solution Cameron wants, one British official acknowledged – but it would guarantee that EU spending remains effectively frozen for the foreseeable future.