Bloomberg News

Cameron Suggests Two-Tier System for European Union’s Budget

October 07, 2012

U.K. Prime Minister David Cameron

David Cameron, U.K. prime minister. Photographer: Scott Eells/Bloomberg

U.K. Prime Minister David Cameron suggested the European Union should have a two-tier budget structure, with countries in the euro region paying more toward governance of the bloc.

“When you have got a single currency with a single bank behind it and more transfers between those countries there will come a time when you are going to need to have two European budgets: one for the single currency because they are going to have to support each other much more and perhaps a wider budget for everyone else,” Cameron told BBC television’s “Andrew Marr Show” yesterday.

The premier also said he’d be prepared to use the British veto unless he gets a “good deal” in negotiations over the 2014-20 EU budget. The Liberal Democrats, his coalition partners, reacted with dismay last year when Cameron took a stance opposing a pact enforcing stricter fiscal discipline within the EU.

Cameron, who spoke as his Conservative Party began its annual conference in Birmingham, central England, was seeking to reassure euroskeptic Tories, many of whom want a referendum on pulling out of the EU. He reiterated his desire to remain a part of the EU, saying he wants to renegotiate Britain’s relationship with the bloc after the 2015 general election.

“It’s very simple what I want: Europe is changing; the single currency is integrating rapidly,” he said. “I think this presents a great opportunity for Britain to get the sort of deal we’ve always wanted in Europe. That’s at the heart of a free-trading, open-market Europe, but we don’t want this endless political integration.”

‘New Settlement’

Cameron said that “the opportunity will open up, over time, to get a new settlement, and when we get that new settlement, after the next election, we should have new consent for that settlement.” he said.

That new consent “could either take place through a referendum, or possibly if it was close to one, at a general election,” Cameron said. “But a new settlement, new consent -- that’s what you’d get from a Conservative government.”

Foreign Secretary William Hague told the Tory conference yesterday that “over time we must take the opportunities for Britain to shape its relationship with Europe in ways that advance our national interest.” He highlighted “being part of the single market that has done so much for our prosperity, using the collective weight of European nations to advance our common interests, in free trade, open markets and cooperation on climate change.”

Labor Movement

Cameron said Britain is examining areas of policy opt-outs from the EU. When asked about the possibility of abandoning the free movement of labor in Europe, Cameron said, “heavens above, we have got so many unemployed people in our country,” refusing to say whether it is an area he is looking at.

Home Secretary Theresa May was cited by the Sunday Times newspaper yesterday as calling for a review of workers’ ability to switch countries, one of the EU’s central tenets, as the government seeks to control immigration.

“We are looking at this whole area of the abuse of the freedom of movement,” the newspaper quoted May as saying. “But we will go further on this, and the issue of free movement will be part of the review” the government is carrying out into Britain’s relationship with the EU.

To contact the reporter on this story: Kitty Donaldson in Birmingham, England, at kdonaldson1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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