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| EU demand for extra £1.7bn from UK prompts emergency meeting | EU demand for extra £1.7bn from UK prompts emergency meeting |
| (about 2 hours later) | |
| Europe’s finance ministers are to convene an emergency meeting after the disclosure of a demand for some countries, including Britain, to contribute billions more to the EU budget, the British prime minister’s spokesman has said. | Europe’s finance ministers are to convene an emergency meeting after the disclosure of a demand for some countries, including Britain, to contribute billions more to the EU budget, the British prime minister’s spokesman has said. |
| David Cameron has said he believes the demand for £1.7bn from Britain is “unacceptable” and has secured a gathering of Treasury ministers to discuss the recalculation of contributions, which has hit the UK, Italy and the Netherlands with additional bills, while France and Germany are to receive a rebate. | David Cameron has said he believes the demand for £1.7bn from Britain is “unacceptable” and has secured a gathering of Treasury ministers to discuss the recalculation of contributions, which has hit the UK, Italy and the Netherlands with additional bills, while France and Germany are to receive a rebate. |
| The meeting is a minor victory for No 10 following Thursday night’s disclosure that Britain has been ordered to pay the money because its economy is performing better than others in the union. | The meeting is a minor victory for No 10 following Thursday night’s disclosure that Britain has been ordered to pay the money because its economy is performing better than others in the union. |
| Cameron is under increasing pressure from his backbenchers and Ukip to face down the European demand as his party resists another major challenge from the anti-EU party at the Rochester byelection next month. | Cameron is under increasing pressure from his backbenchers and Ukip to face down the European demand as his party resists another major challenge from the anti-EU party at the Rochester byelection next month. |
| British and European commission officials confirmed that the Treasury had been told last week that budget contribution calculations based on gross national income (GNI) adjustments carried out by Eurostat, the EU statistics agency, had exposed a huge discrepancy between what Britain had been asked to contribute and what it should be paying, because of the UK’s recovery. | British and European commission officials confirmed that the Treasury had been told last week that budget contribution calculations based on gross national income (GNI) adjustments carried out by Eurostat, the EU statistics agency, had exposed a huge discrepancy between what Britain had been asked to contribute and what it should be paying, because of the UK’s recovery. |
| Cameron’s spokesman said: “He is not the only head of government who has raised this issue. He spoke to the Dutch prime minister yesterday. | Cameron’s spokesman said: “He is not the only head of government who has raised this issue. He spoke to the Dutch prime minister yesterday. |
| “We are rightly challenging this. What is needed is a detailed discussion by finance ministers, and that is what will now happen. I believe Eurostat is clear that this is a provisional estimate.” | “We are rightly challenging this. What is needed is a detailed discussion by finance ministers, and that is what will now happen. I believe Eurostat is clear that this is a provisional estimate.” |
| The meeting could also discuss why the recalculation includes estimates of the black economy in each country, including prostitution, drugs and tax evasion, and whether this can be used to manipulate contribution figures. | The meeting could also discuss why the recalculation includes estimates of the black economy in each country, including prostitution, drugs and tax evasion, and whether this can be used to manipulate contribution figures. |
| The prime minister’s spokesman would not answer repeated questions about when the British government was first told of the demand, instead saying that the disclosure of the additional payment had only been released over the last few days. | The prime minister’s spokesman would not answer repeated questions about when the British government was first told of the demand, instead saying that the disclosure of the additional payment had only been released over the last few days. |
| The commission told the various countries of the revamped figures on 17 October, EU officials said. They said Britain had until 1 December to provide €2.1bn (£1.7bn), roughly a fifth of the UK’s annual net contribution to the EU. | The commission told the various countries of the revamped figures on 17 October, EU officials said. They said Britain had until 1 December to provide €2.1bn (£1.7bn), roughly a fifth of the UK’s annual net contribution to the EU. |
| On an LBC radio phone-in on Friday morning, the Ukip leader, Nigel Farage, said Cameron would have little option but to go along with the demand. “Of course he will pay up. These are the rules, the contributions to the European Union was a very complex formula and part of it is a measurement of your GDP against everybody else’s. There’s nothing he can do.” | On an LBC radio phone-in on Friday morning, the Ukip leader, Nigel Farage, said Cameron would have little option but to go along with the demand. “Of course he will pay up. These are the rules, the contributions to the European Union was a very complex formula and part of it is a measurement of your GDP against everybody else’s. There’s nothing he can do.” |
| Cameron joked about the EU’s attempt to get hold of “my money” as he visited Rochester on Friday. | Cameron joked about the EU’s attempt to get hold of “my money” as he visited Rochester on Friday. |
| Speaking to a handpicked audience of community representatives, the prime minister said he had not allowed the EU to get its way. | Speaking to a handpicked audience of community representatives, the prime minister said he had not allowed the EU to get its way. |
| “It’s great to be here. Apologies for being late. These European councils, there are too many of them, they go on far too long and they always try and get hold of your money. I’ve had all of those things this time, but they didn’t get my money and I managed to get here in the end.” | “It’s great to be here. Apologies for being late. These European councils, there are too many of them, they go on far too long and they always try and get hold of your money. I’ve had all of those things this time, but they didn’t get my money and I managed to get here in the end.” |
| Cameron signalled he could be prepared to compromise on the bill, as he only ruled out paying as much as the £1.7bn demanded. | |
| Asked if the UK would eventually cough up, he suggested that a lower sum could be acceptable. | |
| “If it is €2bn, no we are not. That is not acceptable. We do have these changes where they look at how economies have grown. Sometimes you pay a little bit more, sometimes you pay a little bit less. But it has never happened like this before, with a €2bn bill.” | |
| He acknowledged it was frustrating that the EU demand had fallen in the middle of the byelection, but said voters wanted a leader who could stand up for Britain in Europe, not someone like Farage who was just “gloating” down the pub posing with a pint. | |
| Cameron said it was “perfectly natural” that Treasury ministers and officials knew about the bill “a day or so before” he did. | |
| The bombshell, first reported by the Financial Times, was dropped into the middle of an EU summit in Brussels where Cameron and 27 other leaders were mired in tough negotiations over climate-change policy and attempts to agree big reductions in greenhouse gas emissions by 2030. | The bombshell, first reported by the Financial Times, was dropped into the middle of an EU summit in Brussels where Cameron and 27 other leaders were mired in tough negotiations over climate-change policy and attempts to agree big reductions in greenhouse gas emissions by 2030. |
| “The Treasury looks at these things and provides advice for ministers and then gives ministers advice. As soon as I found out about it I took very rapid action to build an alliance with the Italians, the Dutch, the Greeks, the Maltese and others who were affected, and actually stopped the European council effectively, and said: ‘Right, we’re not going to talk about anything else until we’ve talked about this and made sure that there will be an emergency meeting of finance ministers in Europe’. That’s what you can do when you’re actually in the room with the power, with the ability to get things done rather than posing down the pub.” | |
| Cameron said the commission president did not know about the demand: “He was totally blindsided by this, which I thought was extraordinary. So it is the scale of it that is completely unacceptable.” | |
| The demand for the money is political dynamite for a prime minister wrestling with dilemmas over Britain’s future in the union and broadly seen to be making increasingly Eurosceptic gestures to the restless backbenchers who want to deal with Farage’s Europe rejectionists. | The demand for the money is political dynamite for a prime minister wrestling with dilemmas over Britain’s future in the union and broadly seen to be making increasingly Eurosceptic gestures to the restless backbenchers who want to deal with Farage’s Europe rejectionists. |
| “The timing is far from ideal,” said Patrizio Fiorilli, a spokesman for the EU budget commissioner. “But there are rules we have to follow.” | “The timing is far from ideal,” said Patrizio Fiorilli, a spokesman for the EU budget commissioner. “But there are rules we have to follow.” |
| Cameron and his party, under pressure from Ukip to bolster their anti-EU credentials, are already embroiled in fights with Brussels and other EU capitals over freedom of movement and immigration, and over Cameron’s insistence on rewriting the terms of Britain’s EU membership before putting a new deal to an in/out referendum in the UK by 2017, if he wins the election next year. Cameron has set great store on campaigning to reduce the overall EU budget, arguing that at a time of austerity and spending cuts across Europe, the Brussels pot could not remain immune. | Cameron and his party, under pressure from Ukip to bolster their anti-EU credentials, are already embroiled in fights with Brussels and other EU capitals over freedom of movement and immigration, and over Cameron’s insistence on rewriting the terms of Britain’s EU membership before putting a new deal to an in/out referendum in the UK by 2017, if he wins the election next year. Cameron has set great store on campaigning to reduce the overall EU budget, arguing that at a time of austerity and spending cuts across Europe, the Brussels pot could not remain immune. |
| Eurostat arrived at the €2.1bn figure on the basis of new methods of calculating member states’ GNI since 1995, taking account of previously unreported or under-reported black economy elements, such as the drugs and sex industries. Eurostat concluded that the UK economy had been doing much better than previously assumed since 1995, relative to other European countries, and, as such, its contributions needed to be increased. | Eurostat arrived at the €2.1bn figure on the basis of new methods of calculating member states’ GNI since 1995, taking account of previously unreported or under-reported black economy elements, such as the drugs and sex industries. Eurostat concluded that the UK economy had been doing much better than previously assumed since 1995, relative to other European countries, and, as such, its contributions needed to be increased. |
| “It changes the way contributions to the budget are calculated,” said Fiorilli. “Some member states have booming economies. Everyone can see the UK is growing much faster than others.” | “It changes the way contributions to the budget are calculated,” said Fiorilli. “Some member states have booming economies. Everyone can see the UK is growing much faster than others.” |
| He said the commission and Eurostat used 1995 as the benchmark for calculating the impact of GNI figures because member states, including Britain, had decided on that year. | He said the commission and Eurostat used 1995 as the benchmark for calculating the impact of GNI figures because member states, including Britain, had decided on that year. |
| The demand comes as part of what is known in Brussels as an amending budget proposal, a routine event that occurs regularly and is dependent on the ebb and flow of payments into the EU. There are another six amending budgets on the table in Brussels, some of which may entail returning funds to Britain, meaning the overall bill could yet be cut. | The demand comes as part of what is known in Brussels as an amending budget proposal, a routine event that occurs regularly and is dependent on the ebb and flow of payments into the EU. There are another six amending budgets on the table in Brussels, some of which may entail returning funds to Britain, meaning the overall bill could yet be cut. |
| While the €2.1bn bill is theoretically due by 1 December, the amending budget has to be endorsed by the 28 governments of the EU and the European parliament, meaning it could run into resistance if Britain is able to marshal enough allies, including European governments reluctant to hand an easy victory to those campaigning to take the UK out of the EU. | While the €2.1bn bill is theoretically due by 1 December, the amending budget has to be endorsed by the 28 governments of the EU and the European parliament, meaning it could run into resistance if Britain is able to marshal enough allies, including European governments reluctant to hand an easy victory to those campaigning to take the UK out of the EU. |
| But prominent Tory critics of Europe continued to demand that Cameron make a stand. Backbencher John Redwood said the surcharge “offended all our principles of natural justice and fair taxation”. He suggested the UK should refuse to pay the extra amount and that parliament should be asked to pass a law declaring the payment illegal. | |