David Cameron angry over €2.1bn EU surcharge
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David Cameron has lashed out at the EU, saying a €2.1bn surcharge for the UK was “unjustified”, even as it emerged that British officials played a role in endorsing the calculations.
The UK Treasury would have been aware that a surcharge was looming and chancellor George Osborne was personally warned of the bill on Tuesday night but failed to raise the alarm with the prime minister.
Speaking at the end of an EU summit on Friday, which Mr Cameron interrupted for an hour to protest against the bill, the British prime minister said he felt “downright anger” at being blindsided by the decision and refused to pay by the due date of December 1.
While Mr Cameron’s outrage won support from the Netherlands and Italy, which also face top-up bills, there was little sympathy from other EU countries. French President François Hollande, whose country will receive a €1bn rebate, told Mr Cameron to “stick to the rules”.
Those involved in the complex calculations made clear that British officials agreed big revisions to the national accounts this year, knowing that they would result in a significant one-off bill to the EU.
One UK government official described the episode as “a screw-up by officials who failed to spot the magnitude of what they were dealing with”. But fingers were also pointed at Mr Osborne and the Treasury.
Underpinning the hefty one-off bill was an agreement by the Office for National Statistics, the UK’s statistical agency, to bring its measurement of six sectors of Britain’s economy – the most important being the charitable sector – into line with European norms. The ONS agreed with Eurostat, Europe’s statistical agency, to implement the changes this year, knowing that they would date back to 2002.
As a result of the recalculation, £74bn was added to Britain’s measured gross national income in 2013.
Since the EU budget is partly financed on the basis of the national income of member states, any large rise in Britain’s GNI was going to result in back payments, officials at the ONS told the Financial Times.
The ONS said the recalculation was a process of “putting things on a level playing field” and the revisions were “improvements” to the national accounts. The office published a report in May showing that it was aware of the scale of the revisions and their potential effect on the EU budget.
However, on Friday Mr Cameron’s ire was directed at the European Commission.
“It is an unacceptable way for this organisation to work – to suddenly present a bill like this for such a vast sum of money with so little time to pay it,” he said.
José Manuel Barroso, the departing commission president, said he would not speculate on what would happen if Mr Cameron did not pay the bill on time. But he defended the process as a technocratic calculation that used rules agreed by all EU member states, including the UK.
“This is an annual exercise based on figures given by each member state through their own statistical offices,” Mr Barroso said. “This should not have come as a surprise to the member states as the maths are based on [the rules] they have agreed unanimously.”
Mr Barroso insisted that Brussels had been “careful not to politicise the process we have been asked to administer”. The departing commission president signalled that he would not negotiate with Mr Cameron over the size of the bill. “We cannot have a negotiation about the GDP [gross domestic product] of the different countries,” he said.