The United Kingdom and the Netherlands are leading a campaign for the EU’s budget to be frozen in 2011 at its 2010 level. They argue that the budget increases proposed both by MEPs and the European Commission are unjustified.

David Cameron, the UK’s prime minister, said yesterday (27 October) that spending increases by the EU could not be countenanced while deep cuts were being made to public spending at home. “It is completely unacceptable at a time when we are making tough budget decisions here [in the UK] that we are seeing spending rise persistently in the European Union,” Cameron said.

His comments, which echoed similar concerns voiced earlier in the week by Mark Rutte, the new Dutch prime minister, came on the same day that formal negotiations on the 2011 EU budget began between the Council of Ministers and the Parliament. The two institutions set an ambitious 11 November target by which to reach a final deal. Under treaty rules the two sides have only 21 days to reach a compromise.

While the 2011 budget is not formally on the agenda of the European Council, which meets today and tomorrow (28-29 October) in Brussels, diplomats are expecting the 2011 budget to be discussed.

Germany and France will be arguing the case for a change to the EU’s treaty to set up a permanent mechanism to respond to financial crises. Cameron is expected to make a link between freezing the 2011 budget and any such attempt at treaty change.

In earlier negotiations, the UK and the Netherlands, plus Austria, the Czech Republic, Denmark, Finland and Sweden, opposed a proposal by Belgium, which holds the rotating presidency of the Council of Ministers, to increase the budget by 2.9%. But the seven states fell three votes short of the 91 votes needed to block the Belgian proposal. The seven continue to call for either an outright freezing of the budget or reductions in certain areas of EU spending.

Linkage to budget sources

Cameron and Rutte’s call for a freeze puts added pressure on Belgium, which is representing member states in the negotiations with the Parliament. The Parliament has proposed a budget increase of 5.9%.

Belgian ministers have already stressed to MEPs they will have to accept a smaller increase given that austerity measures are being implemented in many EU states.

Yves Leterme, Belgium’s acting prime minister, represented the Council’s negotiating team at the first round of talks with Jerzy Buzek, the president of the Parliament, yesterday. Further rounds of negotiations have been scheduled for 4, 8 and 9 November.

Buzek and other MEPs told Leterme yesterday that the Parliament wanted “firm assurances” from the Council to hold talks on finding new sources of income for the EU budget, in addition to national contributions. In exchange for such commitments MEPs would show “good will and accept a moderate budget”, a Parliament official said. The Belgians have so far refused to link a debate on new sources of income with the 2011 budget talks.

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