EU leaders argue over bloc’s €1tn budget cut

No deal reached.

New Statesman
David Cameron at the EU summit in Brussels. Credit: Getty Images.

Leaders of the 27-member European Union (EU) at the budget summit in Burssels have argued on how to cut the bloc’s €1tn budget during the period 2014 to 2020, without reaching a deal.

Before the summit, Herman Van Rompuy, president of the European Council, was planning to bring the budget to €957bn by cutting about €15bn from his earlier proposal. He, however, was considering even deeper cuts of €30bn to the budget payments category in a concession to Britain to further bring down the total to €912bn.

Britain demanded for a budget freeze compatible with the austerity sweeping national capitals, while the France and Italy argued for more spending to tackle the effects of recession.

Throughout the negotiations, the British prime minister David Cameron focused exclusively on payments citing that they are always smaller than the headline ceiling of budget commitments that are the standard measure used by other governments.

Cameron warned that “the numbers that were put forward [in November] were much too high. They need to come down, and if they don’t come down, there won’t be a deal.”

The German chancellor Angela Merkel said: “We have to be careful with the way we spend but also show solidarity between net contributors and recipients.”

Martin Schulz, president of the European parliament, warned that his members might block a deal if it strayed too far from the €1,033bn proposal made by the European Commission more than a year ago.

Alexander Stubb, Finland’s Europe minister, said: “The EU budget for the first time in its history is not going to increase. Stubb was optimistic that a deal would be reached. He said: “The mood, rumours, it keeps on changing. There’s always an element of theatre.”

A deal requires consent of the European parliament apart from unanimous approval from all 27 member states.

The EU members failed to reach a deal on budget cut in November 2012.