Video | Malta supporting David Cameron's call for limiting EU budget increase

Cameron has reportedly won support from ten European Union leaders, including the Maltese Prime Minister.

The 6.2 percent rise planned by the European Parliament and European Commission would be “especially unacceptable at a time when we are having to take difficult decisions at national level to control public expenditure,” the leaders of 11 countries including Germany, France, the U.K. and Sweden said in a letter to be sent to EU President Herman Van Rompuy today.

A Bloomberg report says that EU governments voted for a 2.9 percent budget increase earlier this year and their negotiators will meet with parliamentary representatives to hammer out a compromise. “We are clear that we cannot accept any more than this,” said the leaders, who started a two-day meeting in Brussels yesterday.

The EU budget of 123 billion euros this year is equal to about 1 percent of the bloc’s gross domestic product compared with national spending by member countries that averaged 51 percent of domestic GDP in 2009.

Cameron, who called for “a freeze or a cut” to next year’s EU budget in an Oct. 23 Daily Mail interview, said as he arrived at the meeting yesterday that he was determined to discuss EU spending even though it’s not on the formal agenda.

He’s seeking to set the tone for discussions of the principles that should guide budgets between 2014 and 2020 in the EU’s seven-year budget-setting process. The U.K. and six other countries voted against the 2.9 percent increase.

‘Strong Signal’

“This letter sends out a strong signal to the European Parliament and the Commission that they need to demonstrate the same commitment to budgetary discipline and efficiency as the rest of us,” Cameron’s spokesman Steve Field told reporters.

Cameron clashed with Jerzy Buzek, the president of the European Parliament, yesterday after Buzek addressed EU summit leaders, Field said. Buzek told Cameron that if he refuses to back a 6 percent increase, he is anti-European, to which Cameron replied that because he has cut budgets for police it doesn’t make him anti-police, Field said.

German Chancellor Angela Merkel then said that she is not anti-German even though she has cut the German budget, Field told reporters.

‘Split’

“Opinions were shared; there was no clear support for what Prime Minister Cameron has proposed,” Buzek told reporters after the meeting. “I would say that opinions are split.”

The 11 EU members that signed the budget-limit letter are Britain, Germany, France, the Netherlands, Sweden, the Czech Republic, Denmark, Austria, Finland, Slovenia and Estonia.

“Six percent is not acceptable and I want to build alliances, work with colleagues and put a stop to that and see if we can come up with something better,” Cameron told reporters yesterday. “At a time when European countries, including the U.K., are taking tough decisions on their budgets, and having to cut some departments, it’s completely wrong that European institutions should be spending more money on themselves.”

Cameron sought to head off disagreements in his coalition government over whether there should be a referendum on any changes to EU treaties. He emphasized that the U.K., which is outside the 16-country euro region, will not be affected by agreement at the summit on a rewrite of the treaties to create a permanent debt-crisis mechanism by 2013 to prevent a repeat of the Greek-led fiscal crisis that jolted the euro.

“The prime minister secured beyond any doubt a full British opt-out from possible sanctions on individual member states and established that any possible future treaty change would not affect the U.K.,” Cameron’s office said in an e- mailed statement.

Under the terms of the agreement that formed the coalition between Cameron’s Conservatives and the Liberal Democrats there must be a referendum on any change to European rules that “transferred areas of power” from the U.K. to the EU.

Prime Minister Gonzi's concluding press conference

Speaking from Brussels at the end of the EU Summit, Prime Minister Lawrence Gonzi welcomed the “concrete steps” being taken by the EU to ensure that “we (Europe) avoid the same situation we’ve been experiencing over the past two and a half years.”

Flanked by Malta’s EU Perrmanent Representative Richard Cachia Caruana, the Prime Minister said expressed satisfaction that the EU agreed to a permanent mechanism that would spring into action when a member state would be headed into a crisis.

He welcomed the EU members’ “unanimous approval”, adding that the consultation process can now begin on how this mechanism be implemented, including any necessary amendments.

Gonzi said how these important steps “clearly show that the economic crisis is still with us.  Countries should never assume that simply because they have started experiencing some growth that they are out of it. It is the greatest mistake they could make.”

He said that every country needs to consolidate its own position financially and fiscally, encouraging economic growth sustainably and cautiously.

Gonzi underlined that Malta’s position adopted the recent 2011 budget fell in line with that adopted by the EU throughout this summit: “Fiscal consolidation and cautious growth aimed at generating employment.”

Additional reporting by Nestor Laiviera