Cameron wants to see EU budget reduced

Prime Minister David Cameron (L) speaks to the media with Denmark's Prime Minister Lars Lokke Rasmussen at 10 Downing Street in London, August 12, 2010.

LONDON (Reuters) - Prime Minister David Cameron said on Thursday he wanted to see the European Union's 140 billion euro (115.4 billion pound) budget reduced over time.

"As we reduce our deficits at home, I think it's very important ... that we both argue to make sure that the European budget over time is reduced rather than increased," Cameron said at a joint news conference with visiting Danish Prime Minister Lars Lokke Rasmussen.

Cameron said he had discussed the issue with Rasmussen.

"We can't ask our members of the public to pay more here in the UK and have to pay more in Europe as well," he said.

Cameron, a Eurosceptic Conservative, heads a three-month-old coalition government with pro-European Liberal Democrats.

The EU's executive, the European Commission, is due to propose the size and shape of the 27-country bloc's overall budget for 2014-2020 around the middle of next year.

At a time when his government is embarking on sharp budget cuts at home to rein in a record peacetime budget deficit, Cameron does not want to be making higher British contributions to the EU budget.

A senior EU official said on Monday the European Commission is preparing proposals for an EU-wide tax that could fall on bank transactions or air travel to help finance the budget.

Cameron said he and Rasmussen both wanted to see strong deficit reduction in EU countries and said they would both press for open markets, deregulation and higher European growth rates.

"That's a very strong shared interest that we have," he said.

Rasmussen said Britain and Denmark must do whatever they could to get public finances back on a sustainable track.

"I realise it is not easy in the UK, it is not easy in Denmark, but there is absolutely no alternative," he said.

"We have to stick to a sustainable economic policy in order to create a situation where we can have growth and prosperity again in our societies," he said.

Denmark announced in May that it planned to save about $4 billion over the next three years, lowering its estimate for its 2010/11 budget deficits as recovery takes hold.

(Reporting by Adrian Croft)