Monday

25th Jun 2018

Cameron defeated in EU budget vote

  • Cameron's hands tied ahead of budget summit (Photo: parliament.uk)

British Prime Minister David Cameron suffered an important defeat in parliament on Wednesday (31 October) when opposition Labour party MPs sided with eurosceptics in his own Conservative party to demand a reduction in the EU budget

MPs voted by 307 to 294 in favour of a Tory-rebel amendment calling for the 2014-2020 EU budget to be "reduced in real terms."

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Ahead of the vote, Cameron portrayed himself as tough on Brussels but left wiggle-room to agree to an EU budget increase in line with 2 percent inflation.

"This government is taking the toughest line in these budget negotiations of any government since we joined the European Union," he said.

"At best we would like it cut, at worst frozen, and I'm quite prepared to use the veto if we don't get a deal that's good for Britain," he added.

The vote is not legally binding.

But it will make it politically more difficult for Cameron to make concessions when EU member states discuss the budget at a summit on 22 November.

For its part, the Guardian reported that some senior Conservatives did not back the amendment in order to spite Labour.

But the same grandees have threatened Cameron with a rebellion if he does not get EU spending down.

Meanwhile across the Channel, France added its name to the growing list of potential budget veto-wielders.

It said it is against a proposed cut to farm subsidies to bring down the overall cost of the €1 trillion package.

"France would not support a multi-annual budget that does not maintain the funds of the common agricultural policy," its EU affairs minister Bernard Cazeneuve said.

The statement comes after the Cypriot EU presidency proposed a modest cut of €5 billion to the farm pot.

Sweden, the Netherlands and Denmark are also - for differing reasons - waving the veto flag.

But poorer states in the east and south of Europe want spending to go up in line with European Commission and EU parliament ideas.

The challenge facing EU negotiators is not just whether the budget should be bigger or smaller but where the money should be spent.

The 27 member states are split into various groups - sometimes overlapping - which emphasize different priorities.

If the November summit ends without a deal, the deadline moves to next spring - the final moment to get the necessary EU legislation in place by 2014.

Greece and creditors proclaim 'end of crisis'

After late-night talks, the Eurogroup agreed on a €15bn disbursement and debt relief measures for Greece, while setting out a tight monitoring when the bailout ends in August.

Greek bailout exit takes shape

At a meeting next week, eurozone finance ministers and the IMF are expected to agree on new cash, debt relief measures, and a monitoring mechanism to ensure that Greece can live without international aid for the first time since 2010.

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The risks behind the 'green bond' boom

The EU should not overuse the financial system in order to achieve environmental goals, or it risks the emergence of a green bond bubble which would be detrimental to the financial sector and hinder the achievement of climate targets.

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Eurozone needs institutional reform

Both the examples of Greece and Italy test the limits of a system with inherent weaknesses that feeds internal gaps, strengthens deficits and debts in the European South, and surpluses in the European North respectively.

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