Deal unlikely on "ludicrous" EU budget - Cameron

AMMAN Wed Nov 7, 2012 12:05am GMT

Britain's Prime Minister David Cameron visits WI Hall with with local MP Alistair Burt and Conservative Party PCC candidate Jas Parmar in Arlesey, Bedfordshire November 2, 2012. REUTERS/Paul Rogers/POOL

Britain's Prime Minister David Cameron visits WI Hall with with local MP Alistair Burt and Conservative Party PCC candidate Jas Parmar in Arlesey, Bedfordshire November 2, 2012.

Credit: Reuters/Paul Rogers/POOL

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AMMAN (Reuters) - Prime Minister David Cameron on Wednesday branded the EU's proposed budget increase "ludicrous" in one of his strongest attacks yet, and said hopes were low for an EU spending deal at a summit this month.

The tough rhetoric indicates Cameron is likely to use his veto, and comes ahead of talks with German Chancellor Angela Merkel later on Wednesday amid signs that EU leaders are growing increasingly annoyed by what they see as Britain's isolationism.

The prime minister has repeatedly threatened to veto the upcoming budget talks unless spending is frozen in real terms, and in December last year he vetoed a package of fiscal measures designed to help deal with the euro zone debt crisis.

Some European officials believe Britain is on a path to an acrimonious exit from the 27-member bloc.

The prime minister also said he would insist Merkel stick by a letter she and other European leaders signed in 2010 calling for a real terms freeze in the EU budget, which would ensure spending rises no higher than the rate of inflation.

"They're proposing a completely ludicrous 100 billion euro (80 billion pounds) increase in the European budget," Cameron told reporters.

"How can they argue that countries should be cutting spending and taking tough decisions if they're not prepared to take tough decisions themselves?" he said, adding, "I will be arguing for a very tough outcome. I never had very high hopes for a November agreement because you've got 27 different people round the table with 27 different opinions."

Britain, a net contributor to the EU budget, is not alone in calling for budgetary restraint, but it has been the loudest.

Cameron is under intense pressure from his own party and the public to take a tough stance on EU spending at a time of harsh austerity measures at home, giving him very little room to manoeuvre at the budget talks.

He is likely to be fiercely opposed by EU members such as Poland, net recipients from the EU budget, making a November deal unlikely given the budget has to be agreed unanimously.

The prime minister said he has always had "good, frank, open conversations" with Merkel, but that he would be making his arguments on EU spending to her "with vigour".

TWO EU BUDGETS?

Talks on the seven-year EU budget are due to be held in Brussels on November 22-23, and Cameron would have to submit any agreement to parliament for approval.

The growing influence of the eurosceptic wing of his party threatens to reopen the row over Europe that helped undo former Conservative prime ministers Margaret Thatcher and John Major.

Cameron suffered a major parliamentary rebellion last week when members of his ruling Conservative Party joined opposition Labour to win a non-binding vote calling for a real terms cut in EU spending, not just a freeze.

One of Britain's misgivings over the EU budget is the belief that too much money is spent to prop up the bloc's 17-member euro zone currency union, of which Britain is not a member.

Cameron said he would argue that euro zone countries, hit by costly sovereign debt crises, should have a separate budget.

"I understand the difficulties of the euro, but the European Union budget is for all 27 members of the EU, and we shouldn't be using the EU budget to make up for difficulties and problems in the euro zone," he reiterated.

(Reporting by Mohammed Abbas; editing by Ron Askew)

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