EU Budget Freeze the Most Britain Will Tolerate, Alexander Says

U.K. Chief Secretary to the Treasury Danny Alexander reiterated a call for the European Union to freeze its budget, saying “excessive spending” risks eroding support for the austerity being imposed in its member states.

European Commission President Jose Barroso should follow national governments across the EU and find ways to reduce spending rather than increase it, Alexander said in a speech in Rome today. The commission is seeking a budget increase of more than 100 billion euros ($130 billion) over the next seven years, he said.

“The commission’s proposal is the wrong proposal at the wrong time,” Alexander said, according to remarks released by his office. “It is completely divorced from economic reality facing ordinary people across Europe. A real freeze is the most we can accept.”

The comments come as Prime Minister David Cameron heads for talks with EU leaders at a summit in Brussels starting today. Cameron said this month he’s prepared to use the British veto again unless he gets a “good deal” in negotiations over the 2014-20 budget.

The U.K. gets a refund from its contribution to the EU budget and has long opposed increasing it given that 40 percent goes to agriculture. The commission, the 27-nation bloc’s executive arm, said total spending over the seven years starting in 2014 should be a maximum 1 trillion euros.

France is the biggest beneficiary of European farm aid, which the commission wants to shift to growth-boosting areas in the wake of the worst recession since World War II. The U.K.’s budget rebate, which then Prime Minister Margaret Thatcher negotiated in 1984 when Britain was one of the poorer countries in the bloc, was worth 3.5 billion euros in 2010.

To contact the reporter on this story: Gonzalo Vina in London at gvina@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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