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UK faces interest charges on EU payment demand | UK faces interest charges on EU payment demand |
(about 9 hours later) | |
The UK is facing interest charges of more than £3.5m next month if it refuses to make an additional £1.7bn payment to the European Union. | The UK is facing interest charges of more than £3.5m next month if it refuses to make an additional £1.7bn payment to the European Union. |
Prime Minister David Cameron has said the UK will not meet the 1 December deadline set by Brussels and has no intention of paying the full amount. | Prime Minister David Cameron has said the UK will not meet the 1 December deadline set by Brussels and has no intention of paying the full amount. |
The European Commission said the interest rate for non-payment would increase every month. | The European Commission said the interest rate for non-payment would increase every month. |
But a Treasury source told the BBC the UK may not end up paying any interest. | But a Treasury source told the BBC the UK may not end up paying any interest. |
'Currency survival' | |
EU finance ministers could agree on Friday - or at a later meeting - to alter not just the total owed but also the process under which interest is charged, the Treasury source said. | EU finance ministers could agree on Friday - or at a later meeting - to alter not just the total owed but also the process under which interest is charged, the Treasury source said. |
Chancellor George Osborne, who is expected to be at that meeting, told BBC2's Newsnight that the UK's relationship with the EU was "not working properly". | |
He said: "I think it is causing problems for us, because you see essentially a European Union morphing more and more into a eurozone focused on the survival of its currency. | |
"Now I happen to agree that that's what they need to do, but that does have an impact on the UK. | |
"And it's perfectly all right for the UK to say, as the big country that's not in the euro, 'this relationship's not working properly for us'." | |
'Unacceptable' deadline | |
The £1.7bn bill is based on a calculation of how well the economies of member states have fared since 1995. It would add about a fifth to the UK's net EU contribution of £8.6bn for this year. | |
The demand generated an angry reaction from Mr Cameron, who said the figure and the deadline were "unacceptable". | The demand generated an angry reaction from Mr Cameron, who said the figure and the deadline were "unacceptable". |
The prime minister told MPs the UK would be "challenging this in every way possible". | The prime minister told MPs the UK would be "challenging this in every way possible". |
Following the budget adjustment, some countries, such as France and Germany, are due to get a rebate. | Following the budget adjustment, some countries, such as France and Germany, are due to get a rebate. |
Greece and Cyprus are among the other countries asked to pay a surcharge. | Greece and Cyprus are among the other countries asked to pay a surcharge. |
European Commission spokesman Margaritis Schinas told journalists that by law, every member state had to pay what was due by 1 December. | European Commission spokesman Margaritis Schinas told journalists that by law, every member state had to pay what was due by 1 December. |
Asked about the possibility of a penalty, he added: "Rather than fines, there is a process of interest being accumulated." | Asked about the possibility of a penalty, he added: "Rather than fines, there is a process of interest being accumulated." |
According to calculation methods released by the commission, the UK's interest charge would be more than £3.5m next month if it does not make the payment on time, the BBC's Europe correspondent Chris Morris said. | According to calculation methods released by the commission, the UK's interest charge would be more than £3.5m next month if it does not make the payment on time, the BBC's Europe correspondent Chris Morris said. |
The amount levied would work out at an average of £114,247 per day for the first month, and if no UK payments were made within the first year, the average interest charged could rise to nearly £250,000 per day over the course of the year. | The amount levied would work out at an average of £114,247 per day for the first month, and if no UK payments were made within the first year, the average interest charged could rise to nearly £250,000 per day over the course of the year. |
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