Britain rejects EU request for more cash, says it was wrong to ask

By Andrew Osborn

LONDON (Reuters) – The British government rejected on Thursday a European Commission proposal for EU states to provide more money to cover higher spending, telling the bloc to get by with the money it already has.

The issue of how much the EU spends and who pays for it is a sensitive one for Prime Minister David Cameron. Last year, he hailed an EU budget that cut spending as an example of how he was reforming the EU. This year, a party of UK Eurosceptics to his right has just won elections for the European Parliament.

“At a time when countries across Europe continue to take difficult decisions to deal with deficits, the European Commission should not be asking Europe’s taxpayers for yet more money,” a spokeswoman for Britain’s finance ministry, the Treasury, said in a statement.

“The UK firmly believes the EU should manage any additional spending pressures through the reallocation of existing funds within the agreed budget.”

Britain would work with other member states to enforce budget discipline and to ensure that this year’s EU budget reflected what she called the economic reality in Europe and last year’s budget deal, she added.

Britain was responding after the Commission, the EU’s executive, on Wednesday said it needed another 4.7 billion euros (3.82 billion pounds) this year to cover regional aid to member states and for Ukraine.

The Commission said it was looking for 2.1 billion euros of that money to come from member states. A British government source said that would equate to London handing over an extra 500 million pounds in 2014 ($835.30 million).

Cameron is under mounting pressure to show he is serious about altering the country’s ties with the EU after his Conservatives were beaten into third place in last week’s European elections. The Eurosceptic UK Independence Party (UKIP) won the elections.

Cameron faces a difficult national election next year and has promised to try to reshape Britain’s EU ties if re-elected, and then to give Britons an in/out EU membership referendum, a pledge he hopes will head off an electoral threat from UKIP.

Agreeing to release more funds to the bloc just as the government is both trying to look tough on the EU and pushing through spending cuts to reduce the country’s public debts is therefore seen as politically impossible.

Britain pays more to the EU than it gets back, despite enjoying a rebate famously negotiated by the late prime minister Margaret Thatcher, who was reported to have thrown down her handbag at an EU summit before asking for the country’s money back.

($1 = 0.7354 Euros)($1 = 0.5986 British Pounds)

(Additional reporting by William James; Editing by Larry King)

Britain rejects EU request for more cash, says it was wrong to ask