EU bids to keep Britain engaged in budget debate

Thu Nov 8, 2012 3:25pm EST
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By Charlie Dunmore

BRUSSELS (Reuters) - EU negotiators remain hopeful of a deal later this month on the bloc's next long-term budget, despite differences of opinion between Germany, Britain and other major financial contributors.

Talks on Wednesday between German Chancellor Angela Merkel and British Prime Minister David Cameron failed to produce a compromise on the budget plan, worth a proposed 1 trillion euros ($1.28 trillion) between 2014-2020.

While both countries want to cut the spending blueprint proposed by the European Commission, London is pushing for a deeper reduction than Berlin by insisting on a real terms budget freeze.

"There is still an important distance between Britain and Germany on the overall figure, but I don't rule out some convergence before the summit," said one EU diplomat involved in the negotiations, who spoke on condition of anonymity.

Hopes of a deal at the November summit - which could drag on for three days - appeared to recede last week when Cameron was defeated by opposition lawmakers and rebels in his own party who voted for a real terms cut in EU spending.

The government had already threatened to veto any summit deal that went against Britain's national interests, and the parliamentary setback appeared to further restrict Cameron's room for maneuver at the talks.

"People will now know that we are serious when we talk about the need for a spending freeze," one British government official said.

While many governments share Britain's desire to limit their contributions to Europe, Cameron could find himself isolated at the summit if he is unwilling to look for a compromise.   Continued...