Cameron refuses to pay £1.7 billion EU surcharge

October 25, 2014 08:31 pm | Updated May 23, 2016 03:54 pm IST - LONDON:

David Cameron

David Cameron

Speaking at the end of a European Summit in Brussels, an angry David Cameron said that a surcharge of £1.7 billion that the European Commission has asked the United Kingdom to pay by December 1 was “completely unacceptable”.

“I’m not paying that bill on December 1,” the Prime Minister said. “It is not going to happen.”

The demand for the one-off payment comes because of new estimates of U.K.’s gross national income on the basis of standards set by Eurostat, the European statistical agency. These estimates show that Britain’s economy has performed better than other European economies and is therefore required to pay more into the common fund. Britain therefore has to pay its arrears as it were, although it has been hit with a bill much higher than say for the Netherlands, Italy, Cyprus and Greece.

It now transpires that the British Treasury knew about the surcharge but had not briefed the Prime Minister before the summit. The Chancellor of the Exchequer George Osborne knew about the impending demand but did not brief Mr. Cameron.

Mr. Cameron was put in a spot when the media asked him why his own Chancellor had not kept him informed about the payment. “You want to know the ‘who knew what whens’ and all the rest of it but actually, frankly, you don’t need a Cluedo set to know that someone has been clubbed with the lead piping in the library.”

He also found little support within the European Commission. The Dutch government, for example, had set aside reserves for its payment; the French President Francoise Holland (France is to receive a rebate of one billion euros) told Mr. Cameron to “stick to the rules”; and Italian Prime Minister Matteo Renzi denied that he had ever said “This is not a figure, this is a lethal weapon,” a statement that Mr. Cameron attributed to him.

National treasuries knew of the payments they would have to pay early this week as the EU budget of 2015 is being finalised. Nine countries have been identified for paying extra costs, and the concerned leaders have convened an emergency meeting of Finance Ministers next month to sort out the disagreements.

The issue will have political repercussions for Mr. Cameron and the Conservative party, who are facing pressures from eurosceptic right wing in both the United Kingdom Independence Party (UKIP) and even within their own ranks. There is a by-election coming up in Rochester where there is a Conservative-UKIP face-off. Mr. Cameron has promised an in-out referendum on the EU in 2017 if his party forms the next government. He has also promised a restructuring of ties with the EU if the referendum is not for pulling out of the EU.

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