Saturday

10th Dec 2016

UK threatens to veto EU budget

British conservative Prime Minister David Cameron has said he will block the upcoming EU seven-year budget cycle if it goes against UK interests.

“They know I'm capable of saying No and if I don't get a good deal I'll say No again,” he told the BBC on Sunday (7 October).

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  • British conservative Prime Minister David Cameron has threatened to veto the EU budget (Photo: El_Enigma)

Cameron last year vetoed the fiscal compact treaty on budget discipline which commits member states to sign up to a debt brake.

“I sat round that table - 27 countries, 26 of them signing up to a treaty and I said, 'This is not in Britain's interests, I don't care how much pressure you put on, I'm not signing, we're not having it,” he said on Sunday.

Details of the treaty were fleshed out and then signed by all member states in March, except the UK and the Czech Republic.

Negotiations are currently underway on the EU’s multi-financial framework budget for the period 2014 to 2020. Some 80 percent of the budget goes to member states and covers everything from farm subsidies to research.

The European Commission proposed to increase the budget to a total of €1,033 billion. The European Parliament backs the commission’s budget line, but member states say it is too much, with the UK among those calling for a €100 billion cut.

All 27 member states need to approve the budget, but Cameron says they must first agree to a “proper control” of spending. He threatened to veto any “massive increase."

Two EU budgets

The prime minister also spoke of introducing a separate budget for the 17 member states using the euro.

“There will come a time I believe where you're going to need to have two European budgets - one for the single currency, because they're going to have to support each other much more, and perhaps a wider budget for everybody else,” he told the BBC.

European Council chief Herman Van Rompuy initially circulated the proposal in September and said it would entail, among other things, “a central budget whose role and functions would need to be defined."

The idea is gaining momentum among the Germans and the French.

French finance minister Pierre Moscovici has already suggested that such a budget could be used to address unemployment problems.

The Financial Times Deutschland on Monday reported that a eurozone budget would require around €20 billion.

The paper, without citing sources, said “a euro zone budget of around €20 billion would mean extra costs of around 0.2 percent of eurozone GDP.”

The paper noted that Germany would be liable “for just under €6 billion a year."

EU public lacks voice on banking laws

The complexity of financial laws and lack of NGO resources means the “man in the street” has little say on EU banking regulation, the EU Commission has warned.

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