MercoPress. South Atlantic News Agency

EU paymasters reject point blank proposal for a 5% budget hike

“Well above what the German government considers appropriate”, said Foreign Affairs minister Guido Westerwelle

The European Commission’s request for a 5% hike in member states’ contributions in the next EU budget met immediate resistance from big countries such as Germany, France and Britain yesterday.

With Denmark and the Netherlands also taking a strong line against the proposal, the stage is now set for a long and difficult negotiation of the EU fiscal plan for the years 2014-2020.

Britain and the Netherlands also said they opposed the commission’s proposals for EU-wide taxes on financial transactions and for a common EU value-added-tax charge.

Unanimity is required on tax questions in Brussels, so diplomats believe this element of the plan will be difficult to execute. In some eyes, however, the proposal for EU taxes is designed to put it up to those contributor countries that accept such taxes to provide the additional money.

The response from major budget contributors was immediate and almost overwhelmingly negative as powerful countries drew a contrast between the climate of austerity and the commission’s request for a budget rise.

“My first impression from the proposal issued today is that the total volume of the financial framework laid forth by the commission is significantly above what the German government considers appropriate,” said German foreign minister Guido Westerwelle.

In a statement, the French government said the proposal did not meet its aim of keeping its contribution to the EU budget stable. “France regrets that the commission did not apply the same budgetary discipline and reform to other policies as it proposes for the CAP,” it said.

The office of British Prime Minister David Cameron said the proposal was unrealistic. “The EU has to take the same tough measures national governments are taking across Europe to tackle public deficits,” it said.