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| Britain's rebate could be cut under proposed EU budget changes | Britain's rebate could be cut under proposed EU budget changes |
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| Britain stands to lose around 1bn euros a year in its contentious EU budget rebate under the latest proposals being circulated ahead of what is certain to be an extremely bruising summit devoted to the trillion-euro budget next week. | Britain stands to lose around 1bn euros a year in its contentious EU budget rebate under the latest proposals being circulated ahead of what is certain to be an extremely bruising summit devoted to the trillion-euro budget next week. |
| The chair of the summit, Herman Van Rompuy, president of the European council of national government leaders, has drafted new seven-year budget proposals, slashing the original figures from the European Commission by between 75bn and 81bn euros. His team is presenting the reduced budget as a figure that David Cameron could live with despite the prime minister's threat to veto a deal unless EU spending is frozen at 2011 levels plus inflation until 2020. | The chair of the summit, Herman Van Rompuy, president of the European council of national government leaders, has drafted new seven-year budget proposals, slashing the original figures from the European Commission by between 75bn and 81bn euros. His team is presenting the reduced budget as a figure that David Cameron could live with despite the prime minister's threat to veto a deal unless EU spending is frozen at 2011 levels plus inflation until 2020. |
| The Van Rompuy team also say that the British rebate, worth 3.6bn euros last year, is being retained. But two changes to the way it is calculated would result in the rebate being cut by almost 28% or around 1bn euros a year, according to senior UK officials who on Thursday lambasted both the rebate rejigging and the overall thrust of the Van Rompuy proposals. | The Van Rompuy team also say that the British rebate, worth 3.6bn euros last year, is being retained. But two changes to the way it is calculated would result in the rebate being cut by almost 28% or around 1bn euros a year, according to senior UK officials who on Thursday lambasted both the rebate rejigging and the overall thrust of the Van Rompuy proposals. |
| Italy and France, who bear the brunt of funding the UK rebate because Germany won an exemption from contributing to the costs, are piling on the pressure for a new rebate regime, not to abolish it but to change the way it is calculated. | Italy and France, who bear the brunt of funding the UK rebate because Germany won an exemption from contributing to the costs, are piling on the pressure for a new rebate regime, not to abolish it but to change the way it is calculated. |
| The Van Rompuy draft says all 27 EU countries should have to finance the "correction", including Britain itself, which effectively means a rebate cut of almost 15%. Additionally, part of a deal struck by Tony Blair in 2005 would be scrapped meaning that there would be no redress for British money spent on rural development, resulting in a further 13% reduction in the UK rebate. | The Van Rompuy draft says all 27 EU countries should have to finance the "correction", including Britain itself, which effectively means a rebate cut of almost 15%. Additionally, part of a deal struck by Tony Blair in 2005 would be scrapped meaning that there would be no redress for British money spent on rural development, resulting in a further 13% reduction in the UK rebate. |
| Senior officials in Brussels familiar with the thinking behind Van Rompuy's gambit said he had "tackled the British rebate in a clever way." | Senior officials in Brussels familiar with the thinking behind Van Rompuy's gambit said he had "tackled the British rebate in a clever way." |
| But at a meeting on Thursday of senior officials on the draft budget, Sir Jon Cunliffe, the UK ambassador to the EU, argued strongly for a retention of the status quo and rejected any attempt to shift the rebate's calculation on to a different basis. | But at a meeting on Thursday of senior officials on the draft budget, Sir Jon Cunliffe, the UK ambassador to the EU, argued strongly for a retention of the status quo and rejected any attempt to shift the rebate's calculation on to a different basis. |
| The rebate row multiplies Cameron's problems and isolation on the EU budget ahead of what is certain to be a very fraught summit that may fail to decide how to fund the EU in the years ahead. | The rebate row multiplies Cameron's problems and isolation on the EU budget ahead of what is certain to be a very fraught summit that may fail to decide how to fund the EU in the years ahead. |
| Cameron is caught between his own backbenches and a host of EU leaders alarmed at his threat to veto a budget deal unless the outcome is a lot lower than everyone else is willing to accept. | Cameron is caught between his own backbenches and a host of EU leaders alarmed at his threat to veto a budget deal unless the outcome is a lot lower than everyone else is willing to accept. |
| Van Rompuy has stitched together his proposals in such a way as to produce an actual reduction, his officials say, of 2% in spending planned for 2014-2000 compared to the 2007-2013 period. His total comes out at 973bn euros, 75bn less than the initial commission draft from last summer. It would cut 25bn from farm spending and another 25bn from cohesion funds that go to the union's poorer areas - by far the biggest items in the budget. | Van Rompuy has stitched together his proposals in such a way as to produce an actual reduction, his officials say, of 2% in spending planned for 2014-2000 compared to the 2007-2013 period. His total comes out at 973bn euros, 75bn less than the initial commission draft from last summer. It would cut 25bn from farm spending and another 25bn from cohesion funds that go to the union's poorer areas - by far the biggest items in the budget. |
| Officials say this would enable Cameron to claim victory in the budget battle by demonstrating that EU spending is being cut and not merely frozen. | Officials say this would enable Cameron to claim victory in the budget battle by demonstrating that EU spending is being cut and not merely frozen. |
| But British officials on Thursday abruptly dismissed the Van Rompuy estimates, saying the cuts did not go far enough. The 973bn figure contrasts with a UK target guesstimated of just over 900bn for the seven-year period. The British are refusing to show their hand and name a figure for their preferred budget to the frustration of key senior officials in Brussels. | But British officials on Thursday abruptly dismissed the Van Rompuy estimates, saying the cuts did not go far enough. The 973bn figure contrasts with a UK target guesstimated of just over 900bn for the seven-year period. The British are refusing to show their hand and name a figure for their preferred budget to the frustration of key senior officials in Brussels. |
| For different reasons, the Van Rompuy draft has also managed to alienate several other countries. France rejected the proposals because the cuts to farming subsidies were too high. Portugal, Poland, Austria, and Hungary are also incensed. The Germans are pushing a figure that would entail shaving another 20bn from Van Rompuy's total. | For different reasons, the Van Rompuy draft has also managed to alienate several other countries. France rejected the proposals because the cuts to farming subsidies were too high. Portugal, Poland, Austria, and Hungary are also incensed. The Germans are pushing a figure that would entail shaving another 20bn from Van Rompuy's total. |
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