Victory for David Cameron as EU budget faces cuts for first time in history

Proposals tabled early on Friday morning for Brussels budgets for the period 2014 to 2020 would slash the EU’s spending by £30 billion between 2014 and 2020 compared to current levels of spending, reports The Telegraph.

The historic cuts package tabled by Herman Van Rompuy, the EU president, after a bitter battle between the Prime Minister and François Hollande, the French President, could save the British taxpayer up to £500 million a year.

A “negotiating box” was tabled at 6.30am on Friday morning and the first ever deal that reduces EU expenditure was close to agreement after Angela Merkel, the German Chancellor, threw Germany’s weight behind Britain during almost 20 hours of gruelling talks.

“For the first time in the EU’s history there will be a real budget cut,” said Dalia Grybauskaite, Lithuania’s President and former EU budget commissioner during the last seven year Brussels spending round in 2005.
The cuts include a £1.7 billion reduction in the size of the EU’s administrative budget.

But the deal could be blocked by MEPs after Martin Schulz, the speaker of the European Parliament, threatened to use new powers under the Lisbon Treaty to veto any cuts in the size of the EU budget.

“As President of the European Parliament, whose signature is required for the definitive adoption of the budget, I cannot, will not and, indeed, may not accept what amounts to deficit budgets,” he said.

“Savings made in the EU budget are savings made in the wrong place, because the EU budget is one of the most powerful sources of investment in Europe, a source of investment which people now need more than ever. We are talking about massive real cuts. I don’t know if this can be described as realistic financial planning.”

In a dig at Mr Cameron’s pledge to hold a referendum on EU membership, Mr Schulz pointed out that the seven-year budget will cover “a time span during which at least one member state has said that it may leave the European Union”.

Nigel Farage MEP , the leader of Ukip dismissed the deal.

“This is a dud deal which is already out of date because the debate in Britain has moved on from EU reform to EU exit,” he said.

Talks began acrimoniously on Thursday afternoon when President Hollande snubbed a meeting with Mr Cameron and the German Chancellor.

The French president failed to attend a scheduled meeting in Brussels with the Prime Minister and Angela Merkel of Germany, who are trying to overcome French resistance to cuts in EU spending.

Over almost 20 hours of negotiations, France was the major obstacle to a deal that would squeeze the EU budget and cut billions from the pay and perks for European bureaucrats.

Before the formal summit talks, Mr Cameron had been due to meet Mr Hollande, Mrs Merkel and Mr Van Rompuy. However, the French leader did not attend the hour-long meeting, refusing to answer frantic telephone calls form the EU president.

Diplomats confirmed that France was the cause of “difficulties” at the summit, as the French president forged an alliance with Italy, Spain and Poland, countries that benefit from EU spending.

A budget proposed last year would have set EU spending at £830 billion over seven years. Mr Cameron said that was too high, declaring: “The numbers need to come down.”

Mr Hollande and his allies tried to block a deal to cut spending to £800 billion as talks dragged on into Friday morning.

Despite working closely together recently over military operations in Mali, Mr Cameron and Mr Hollande have openly disagreed over EU issues, including Mr Cameron’s promise of a British referendum and his call for budget cuts.