Bloomberg News

Thrilled by EU Budget, Tories Demand More Europe Spats

February 11, 2013

Delighted by EU Budget, U.K. Tories Demand More Rows With Europe

Pedestrians walk along the River Thames opposite the Houses of Parliament and Big Ben clocktower in London. Photographer: Simon Dawson/Bloomberg

David Cameron appeared before U.K. lawmakers to report on his negotiation of a reduction in the European Union budget, with euro-skeptics in his party congratulating him and urging more confrontations in Brussels.

“May I congratulate the prime minister on a hugely impressive achievement,” Mark Reckless, who organized a record- breaking Conservative lawmaker rebellion over the budget, said in the House of Commons after Cameron spelled out the details of the deal in London today.

“The diplomats, the Liberal Democrats all said the best he could hope for was a freeze, but he delivered for Britain,” Reckless said in a telephone interview. He argued that the prime minister’s speech last month promising a renegotiation of EU membership terms and then a referendum “hugely increases leverage in Brussels -- they know if they don’t give us what we want, we’ll leave.”

EU leaders agreed on Feb. 8 to a seven-year budget that reduces spending for the first time after Cameron demanded cuts. In Germany, the biggest contributor to the EU budget, coalition lawmakers praised Chancellor Angela Merkel for forging the budget deal in an alliance of convenience with Cameron.

“We delivered a real-terms cut on what Brussels can spend,” Cameron told the House of Commons. “It’s a good deal for Britain, a good deal for Europe and, above all, a good deal for taxpayers.”

Merkel’s ‘Understanding’

It was in Merkel’s interests to go along with Cameron’s calls for a budget cut and the prime minister can’t rely on her future support in European negotiations, said Carsten Brzeski, an economist at ING Group in Brussels.

“When it comes to further integration, I don’t think Merkel will be as kind and as understanding as she might have been on the budget,” Brzeski said today in a telephone interview. “Cameron should not overdo it. This is a weapon he cannot use too often.”

Mark Pritchard, another euro-skeptic U.K. lawmaker, described the deal on his Twitter Inc. feed as “historic,” while noting it was “bittersweet” that the U.K.’s overall contribution to the EU budget will still rise, the result of previous negotiations.

“We have slashed 24 billion euros ($32 billion) off a real freeze on the last completed budget,” Cameron told lawmakers today.

‘Real Steps’

Reckless led a rebellion of Tory lawmakers, who joined forces with the opposition Labour Party to pass a vote on Oct. 31 demanding that Cameron negotiate a budget cut, rather than the freeze he had stated as his goal. The scale of antipathy towards Europe within his party was one reason Cameron last month pledged a referendum on EU membership.

Cameron last week said the results of the negotiations showed the referendum pledge hadn’t hurt his ability to negotiate in Europe. “It shows that, working with allies, it’s possible to take real steps towards reform in the EU,” he told reporters. “I don’t find it makes it more difficult to build partnerships, whether it’s with the German Chancellor or the Swedes or the Danes or the Dutch.”

Reckless offered his own analysis of the new dynamic. “Clearly our membership of the EU is in the EU’s interest, if not in ours,” he said. “Other countries have decided they want some money from us, rather than none.”

To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net; Thomas Penny in London at tpenny@bloomberg.net

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


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