UK to pay £1.7bn EU bill in full despite Osborne’s claim to have halved it
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Version 0 of 1. The government has accepted a £1.7bn top-up bill to the EU budget despite repeatedly denouncing its size as unacceptable. George Osborne, the chancellor, has won a respite, however – avoiding a 1 December deadline and deferring the payment interest-free until next September, well after the general election. Britain’s automatic rebate on its contributions to the EU budget was expected to knock €1bn off the demand for €2.1bn, leading the chancellor to brag that he had halved the payment. “Instead of footing the bill, we’ve halved the bill,” he said following a meeting of EU finance ministers in Brussels and talks with the European commission vice-president in charge of budgetary affairs, Kristalina Georgieva. The chancellor asserted that a bill for £1.7bn was now one for £850m – to be paid by 1 September next year in two instalments, one by the deadline, the other in July. While insisting that the invoice had been reduced, Treasury aides conceded that Britain will pay the £850m while also returning the rebate cheque to Brussels, meaning that the full £1.7bn will still be paid. British officials argued that it had not been clear whether the UK would qualify for a rebate since Brussels dropped the bombshell bill. But that would have been unique since Britain’s gross contributions to the EU budget have automatically benefitted from the rebate since the 1980s. Osborne’s claims that the bill had been halved were refuted by other participants in the meeting. “The sum cannot be challenged. We said this and so did many others,” said the Austrian finance minister, Hans Jörg Schelling. Luis De Guindos, the Spanish finance minister, said the same. Schelling said that the compromise had not involved any arguments about the amount owed, only about whether the debt payments could be delayed and paid in instalments without incurring interest. “This proposal is supported by Great Britain,” he said. The row over the budget surcharges erupted a fortnight ago at an EU summit in Brussels when David Cameron was presented with the extra bill, based on more accurate calculations of how the UK economy has been performing since 1995. Cameron turned apoplectic, denounced the commission in the strongest terms, vowed not to pay by the deadline and called the size of the bill unacceptable – a position repeated over the past two days at a north European summit in Helsinki. In Finland he warned that the demand had eroded British public support for the EU by 10% in two weeks. The commission also came under attack for mismanaging the toxic issue and Georgieva admitted on Friday that the eurocrats had learned several lessons from the episode. Friday’s agreement meant that the commission had to amend the regulation on the budget financing, which then has to go back to national governments and the European parliament and be finalised by 1 December to avoid interest payments being added to the outstanding bills. |