Cameron Shown Hard Line by EU Budget Chief Over Surcharge

The European Union’s budget chief said the U.K. should be prepared to pay a 2.1 billion-euro ($2.7 billion) surcharge to the EU this year or face the threat of penalty fees, drawing a hard line over Britain’s latest spending spat with the bloc.

European Budget Commissioner Jacek Dominik said he was surprised by the outrage that British Prime Minister David Cameron expressed at an Oct. 23-24 EU summit about the extra invoice to the British government from the European Commission, the 28-nation bloc’s executive arm.

The additional bill stems from an adjustment to the economic-output data of all EU countries dating as far back as 1995 and was shared with them in mid-October, said Dominik. He said no EU government, including the “experienced” U.K. administration, sounded an alarm bell during consultations earlier this month.

“They all knew about it,” Dominik told reporters today in Brussels. “None of the member states has raised any questions concerning the data.”

The comments signal a lack of EU appetite to give Cameron a face-saving way out of a political corner that highlights Britain’s growing EU skepticism. Faced with a U.K. general election in May, Cameron is seeking to blunt gains by the U.K. Independence Party as it steps up its campaign to take the country out of the EU four decades after joining.

On Oct. 24 in Brussels, Cameron called the EU’s demand for an extra U.K. contribution due at the beginning of December an “appalling way to behave” and said “I’m not paying that bill on Dec. 1.”

This Week

U.K. Chancellor of the Exchequer George Osborne plans to discuss the budget surcharge with his German counterpart, Wolfgang Schaeuble, this week. EU finance ministers may address the issue at a meeting scheduled for Nov. 7.

Cameron, who today repeated his refusal to pay the bill on Dec. 1, risks having few supporters in the European budget spat this time around. The Netherlands, a traditional British ally on such matters, signaled it would cough up an extra 643 million euros that the EU has demanded of the Dutch government.

“If the facts and the figures are correct, we’ll pay,” Dutch Finance Minister Jeroen Dijsselbloem told domestic TV program Nieuwsuur in a broadcast yesterday. “But first I want to know what’s the reason behind this huge increase in contribution.”

Dominik said the latest adjustments in national contributions to the EU’s 140 billion-euro annual budget, while being larger than usual, are part of yearly commission procedures that member nations have long accepted. He said Cameron’s stance risks politicizing an issue that EU governments have traditionally regarded as technical in nature.

Payment Period

Asked whether it would be possible to stretch the payment period this year beyond Dec. 1 given the size of the extra bill for Britain, Dominik said it would be “extremely difficult” because such a step would require fast-track legislation supported by a weighted majority of EU governments.

He also said seeking to extend the payment deadline could backfire on Britain by bringing into question a longstanding refund that the U.K. receives from the EU budget.

“It would also concern the U.K. rebate,” Dominik said. “You open a Pandora’s box.”

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