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28 October 2010

Cameron fights a war on two fronts in Europe

Eurosceptic anger as PM admits defeat on EU budget and Angela Merkel pushes treaty changes.

By George Eaton

As any army knows, it is never wise to fight a war on two fronts. But that’s the position David Cameron finds himself in as he heads to Brussels for a two-day European Council summit. The Prime Minister has already admitted defeat in his attempt to freeze the EU budget and is now fighting to limit the rise to 2.9 per cent. That would represent an increase in the British contribution of £435m; the full 6 per cent rise, as demanded by the European Parliament and the Commission, would mean an increase of £900m a year.

Meanwhile, much to Cameron’s dismay, Angel Merkel has decided that now is just the time for some more institutional tinkering. The German leader is demanding that the Lisbon Treaty be amended in order to create new sanctions against Greek-style profligacy.

The hint from Downing Street is that Cameron may accede to Germany’s demands in return for a reduced budget increase. But for Tory Eurosceptics, that would be one Faustian pact too many. As a non-eurozone member, Britain is exempt from any changes to economic governance and the coalition is not obliged to hold a vote under its “referendum lock”. But expect Tory MPs alienated by Wiliam Hague’s surprisingly pragmatic approach to use this as an opportunity to push for greater repatriation of powers.

Cameron’s Euroscepticism is part of his irreducible core. Britain’s humiliating withdrawal from the Exchange Rate Mechanism (which he witnessed as an adviser to Norman Lamont) convinced him that “ever closer union” was not an option. But as things stand, he is poised to dismay those Eurosceptics who finally thought that one of their kind was in Downing Street.

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