Cameron calls EU cuts a win

Budget victory said to show U.K. still a player despite exit ploy

AFP-JIJI, AP

Prime Minister David Cameron claimed victory in his battle to slash the EU budget Friday, saying marathon talks proved that his promise of a referendum on EU membership had not left Britain isolated.

Cameron had vowed to accept nothing less than a real-term freeze in the seven-year budget as he demanded savings to reflect austerity measures being imposed across the continent and as a necessary step toward reform of the bloc.

European Union leaders agreed to a significantly reduced seven-year budget worth €960 billion ($1.28 trillion) — the first cut in spending in the 27-country group’s history.

European Council President Herman Van Rompuy announced that the agreement had been reached after two days of nearly round-the-clock negotiations — the longest negotiations of his tenure in office. The final total was about €40 billion less than the European Commission had originally proposed.

The issue of what to give to the EU was made more difficult because, he said, its members were struggling with poor economic growth and harsh austerity measures.

“We simply could not ignore the extremely difficult economic realities across Europe,” Van Rompuy told reporters. “It had to be a leaner budget.”

He said it would amount to 1 percent of the European Union’s gross national income.

The final number was far less than the €1.03 trillion ($1.38 trillion) the EU’s executive arm, the European Commission, had originally proposed. The €959.988 billion total will cover the years 2014 to 2020; the budget for 2007 to 2013 was €975.777 billion.

At its heart, the summit was a tussle about what the 27-nation EU stood for. Some leaders argued it was a drag on national budgets in tough economic times, while others said the economic crisis highlighted the need for closer and deeper ties, which would compel the EU to do more than in the past.

It seemed a loss for many of the newer — and generally poorer — members, which see Europe as a club that is only as strong as its weakest member. That group, led by Poland and France, argued that Europe meant nothing if the budget were not used to bridge the wealth gap between rich and poor members and help restart growth.

But French President Francois Hollande also claimed victory, taking a small dig at Britain by noting that Cameron had moved farther from his government’s desired budget total than France had. More broadly, he sought to paint the agreement as a win for Europe, calling it a grand compromise that safeguarded important shared programs and values.

“If there was a loser, he could have blocked it,” Hollande said, referring to the fact that each of the 27 countries had the right to veto any agreement.

A weary-looking Cameron told reporters after the deal was done: “I have been determined to cut the spending limits and so to cut the amount that Brussels can spend. And working with like-minded allies, I have achieved that today. Every previous time these multiyear deals have been agreed, spending has gone up. Not this time.”

Cameron said the budget represented a “good deal for British taxpayers,” though he conceded that Britain’s contributions to the EU will actually go up under a long-agreed adjustment to its rebate, but by far less than before the deal was struck.

The prime minister made it clear for months that he would veto any agreement that did not reduce European Union spending, a demand that caused the last budget summit in November to collapse without a deal.

But critics had warned he had left himself with few allies following his veto of a crucial eurozone deal in 2011 and his pledge last month to hold a referendum on Britain’s membership in the EU by the end of 2017.

Cameron rejected this analysis Friday, saying he had worked closely with German Chancellor Angela Merkel to agree on the budget deal, as well as with other net contributors to the EU in Northern Europe.

Cameron’s determination to slash EU spending had put him at odds with France and other countries that were concerned about cutting investment that could boost growth and tackle the European Union’s record unemployment.

Cameron’s promise to hold a referendum succeeded in calming Euroskeptics in his Conservative Party but sparked concerns in many European capitals by putting the prospect of a British exit starkly on the table.

Nigel Farage, the leader of the U.K. Independence Party, said the deal agreed upon Friday was probably the best Cameron could get in the circumstances but warned it would not quell growing anti-European sentiment in Britain. “The argument in Britain now is about ‘in’ or ‘out,’ it’s not about shaving a few pennies off,” he said.