German Chancellor Angela Merkel holds a news conference
after addressing the political groups at the European
Parliament in Brussels. REUTERS/Eric Vidal
Germany's Angela Merkel has warned Britain not to turn
its back on Europe ahead of talks in London with Prime Minister
David Cameron aimed at overcoming divisions that threaten to
block a European Union budget deal later this month.
Cameron has said he is ready to veto the EU's seven-year
budget and has attacked its "ludicrous" spending plans, in
comments likely to fuel a view among many in Europe that
London is drifting away from the 27-nation union.
German officials are exasperated by what they see as London's
move towards Europe's margins, a feeling reinforced last week
by the British parliament's vote calling for a real-terms cut
in the EU's 1 trillion euro budget.
Before the talks, Merkel told the European Parliament she
could not imagine a Europe without Britain, the world's sixth
largest economy which relies on the EU for half its trade.
"I believe you can be very happy on an island, but being
alone in this world doesn't make you any happier," Merkel
said after British politician Nigel Farage, leader of the
anti-European UK Independence Party, urged her to tell
Cameron that Britain should leave the EU.
Cameron, who wants to stay in the bloc, will back a
real-terms freeze in its budget for 2014-2020. He argues the
EU must tighten its belt at a time of austerity and shrinking
household budgets in many countries.
He was humiliated by the parliamentary defeat and opponents
have accused him of losing control over his Conservative
Party's anti-Europeans, a group that helped bring down former
leaders and that wants a referendum on Britain's EU
Cameron said there should be a separate budget for the EU's
crisis-hit, 17-state, euro zone currency union, of which
Britain is not a member.
"They are proposing a completely ludicrous 100 billion euro
($128.01 billion) increase," Cameron said. "I never had very
high hopes for a November agreement because you have got 27
different people round the table with 27 different opinions."
Debate over a referendum on Britain reworking its EU role or
even leaving has risen up the political agenda. A YouGov
survey in October found 49 percent of those polled would vote
to leave the EU if they were given a say, against 28 percent
who would vote to remain in it.
Before the talks with Merkel, Cameron's spokeswoman denied
suggestions Britain was slowly disengaging with Europe after
nearly 40 years as a member of the EU and its predecessors.
"The prime minister is very much engaging with discussions on
the EU budget and wants to ensure that we get a good deal for
the British taxpayer," she said.
Cameron's threat to block a budget deal could delay a funding
increase for the poorest east European member states and
isolate Britain from disgruntled EU nations. He has already
ruffled feathers by talking of using closer euro zone
integration as a chance to repatriate some powers from
France and Denmark have also threatened to block a budget
deal to press their own interests, highlighting the obstacle
course facing EU leaders later this month.
The budget accounts for just over 1 percent of EU gross
domestic product, compared to between 40 and 56 percent spent
on national budgets. Most EU money is spent on agriculture
(around 40 percent) and regional development in poorer parts
of the bloc (about 35 percent), with the balance going on
research, overseas development aid and 6 percent on
Merkel said last week that veto threats would not help the
EU's budget negotiations. Germany is the biggest net
contributor to the budget while Britain, which receives an
annual rebate on its payments, is the fourth largest net
payer after France and Italy.