David Cameron Reacts Furiously to 'Appalling' EU Budget Demands

Britain's Prime Minister David Cameron arrives at the European Council headquarters ahead of a EU summit in Brussels October 23, 2014. Christian Hartmann/Reuters

Britain’s Prime Minister David Cameron reacted angrily after the UK was told it must pay an extra €2.1 billion (£1.7bn) to the EU by 1st December.

"It is not acceptable, it an appalling way to behave," a visibly angry Cameron told a news conference after crisis talks with European leaders in Brussels. "I'm not paying that bill on December 1st. If people think I am they've got another thing coming. It is not going to happen."

Recent recalculations of member states’ economic performance since 1995 have allocated EU rebates to France, Germany and several other countries, while Britain, the Netherlands, Italy and even the beleaguered economies of Cyprus and Greece have been asked to pay more.

The economic performance analysis was carried out by Eurostat, the European Commission’s statistics agency, and takes into account black market activity in the economy.

However, Britain’s bill is being seen as disproportionately high. Earlier this year, the Italian GDP was also re-calculated using black market estimates, yet Italy has been asked to pay only £223 million - around 13% of Britain’s total. France will receive a rebate of €1 billion according to the planned measures.

European Commission President Jose Manuel Barroso responded that the rules were the rules and should not be called into question, an EU official said.

The announcement of the surcharge has provoked anger in many quarters of British politics, with reactions from politicians of all parties largely hostile, not least from Nigel Farage, leader of the UK Independence Party, who described the EU as “a thirsty vampire feasting on UK taxpayers' blood”.

The chancellor, George Osborne, was apparently told of the planned budget hike several days ago. "I learned earlier this week and it’s totally unacceptable," he told This Week. "It’s unacceptable to be presented with a multi-billion-pound demand with six weeks to pay."

Conservative MEP Daniel Hannan described the EU’s demands as “outrageous” and a “surcharge on success”.  

“This budget hike is a surcharge on success - why else are we being asked to fund it?” he said.

Britain has been hardest hit, he added, “because we’ve had the affrontery to keep our currency, and to make the necessary budget cuts, in consequence we’re being punished.”

He added that “if the EU was serious about raising money, it would have also have exacted fines from nations in breach of the Stability and Growth Pact”.

The Stability and Growth Pact is an EU wide agreement to limit budget deficits in eurozone countries. The pact obliges member states to limit their budget deficits to no more than 3% of their total economy, and avoid overly high levels of public spending in times of recession.

Offending nations include the two of the most influential EU member states, Germany, and France - both of whom are set to profit from the planned rebates.

Hannan added that the EU’s demands would have a profound impact on the British economy. “We’re dealing with serious money here. The £1.7 billion would enough to hire 60,000 nurses and pay their salaries, and enough to take 4p off income tax. It will demand an extra £65 from each family on top of the £527 they already pay towards the EU,” he told Newsweek Europe.

Hannan referred to the addition of black market estimates to the surcharge as a “tiny, ludicrous distraction”. The true figure, he said, would be nowhere near the £1.7 billion, “even if they’ve re-calculated the black economy”. He added that “drug dealers and prostitutes will still be contributing to the British economy through VAT. The figure is absurd.”

Speaking on LBC radio this morning, Ukip leader Nigel Farage said that David Cameron will have no choice but to concede to the EU’s demands.  

“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,” he said.

Daniel Hannan, on the other hand, argued that the PM might be able to renegotiate the surcharge. “It will be hard, but it could be done.”

Polling expert professor John Curtice of Strathclyde University said that David Cameron’s response would be critical in regard to political threat posed to his Conservative Party by Ukip in upcoming elections. “In the short term it doesn’t make Mr Cameron’s life any easier. Although the issue that’s more central to public opinion is immigration rather than payment, this is nonetheless a bit of a gift to Ukip.”

However, Curtice added, in the long-term, a successful opposition to the bill could prove a boost to Conservative electoral chances. “In the past Cameron has profited from being seen to stand up to Europe. If he can turn this fight into a winning battle it might actually do him and his party’s ratings some good”.