Cameron secures EU budget freeze

Prime Minister David Cameron has said the UK alongside France, Germany and other EU countries will publish a letter calling for a freezing of the EU budget at least until 2020.

Cameron has been lobbying behind the scenes at EU meetings in Brussels over the past few days to secure the real-terms freeze in the multi-billion euro budget.

The publication of the letter on Saturday by the rich net contributing countries could spell bad news for poorer states that are net recipients of EU funds, such as Poland, Bulgaria and Romania.

“All over Europe, countries are tightening their belts to deal with their deficits. Europe cannot be immune from that. We need to see real budgetary restraint from 2014,” Cameron told a news conference.

Some diplomats said the British demand would also be supported by the Netherlands, Sweden, Finland and Austria.

The 2011 EU budget will be €126.5bn (£107.3bn), of which more than 40 per cent will go towards agriculture and a third on aid to poor regions.

The EU’s 27 countries will start talks in mid-2011 on the long-term budget, which runs from 2014 until 2020 or longer.

Angela Merkel, Nicolas Sarkozy and I, together with a number of other partners, will publish a text ... to put a firm marker for these negotiations (on the EU budget),” Cameron said.

“The text to be published talks about at least a real terms freeze for that period.”

A draft of the letter seen by Reuters said EU budgets post-2013 should increase no more than the rate of inflation.

With high economic growth and low inflation, that could mean an effective cut in the budget over time.

One diplomat said Britain has scaled down its demands as it initially wanted to trim the budget to 0.85 per cent of the bloc's output, compared with the current one per cent.

“I don't think it is a big victory for Cameron. The letter could have been much stronger and it is not talking about significant cuts,” the diplomat said.