Good afternoon. When I arrived in Brussels yesterday, I made clear that getting a grip of EU spending was my top priority. I said at the time when many national governments around Europe, including ours at home, are taking tough steps to clamp down on dangerous deficits, it was completely unacceptable to be talking about large increases for the European budget. At this Council, we have indeed taken important steps to begin to bring the EU’s finances under control.
There are three specific and important outcomes from this meeting.
First, Britain won backing from twelve other member states, including Germany and France, to put a stop to the 6% increase in the 2011 EU budget that was being senselessly proposed by the European Parliament. We have issued a joint letter, which makes clear that a 6% increase is, and I quote, “Especially unacceptable at a time when we are having to take difficult decisions at national level to control public expenditure”. More than that, the joint letter goes on to say, and I quote, “We are clear we cannot accept any more than the 2.9% increase being proposed by the Council”.
This is a very clear statement of intent: the 6% increase is dead. The 2011 budget was not on the agenda for this Council; we put it on the agenda. We persuaded other countries to reject that 6% increase. Britain has made a real difference.
Second, Britain has secured an unprecedented and important new principle, one that, frankly, I think was long overdue: from now on, the EU budget will reflect the spending cuts being made by national governments. To quote the conclusion’s text: “Heads of state or government stressed that at the same time as fiscal discipline is reinforced in the European Union, it is essential that the European Union budget, and the forthcoming Multi-annual Financial Framework reflect the consolidation efforts being made by member states to bring deficit and debt onto a more sustainable path”.
Let me put this as simply as possible: Britain is making difficult decisions at home because we simply have to deal with our massive deficit. So is Germany, so is France, so are many others. Now we have agreed that the EU budget must reflect what we are doing in our own countries. This applies for every single year from now on, including the crucial 2014 to 2020 EU spending round.
This is, I think, incredibly important. It will have a direct impact on the pocket of the UK taxpayer back at home. It is a significant prize that we have got in this conclusion’s text.
Third, there has been a discussion on Europe’s economic governance arrangements. Britain is not a member of the Eurozone, and we will not be joining the euro, but stability in the Eurozone is in our national interest, which is why we support Eurozone countries’ efforts to get their own house in order. While final decisions were not taken at this Council, we have, and I quote, ‘Endorsed the report of the Task Force on Economic Governance including the clear UK opt-outs contained within it.’ It is explicitly agreed that strengthened enforcement measures need to be implemented for all EU member states, except the UK, as a consequence of Protocol 15 of the Treaty.’ So, we have established beyond doubt a full British opt-out from possible sanctions on individual member states.
We have also established that any possible future treaty change, should it occur, would not affect the UK. To be absolutely clear: no powers will be transferred from Westminster to Brussels. In terms of what Eurozone countries have agreed for themselves, the most likely outcome is they will simply put on a more formal basis the arrangements which exist already for bailing each other out in the event of a crisis. We welcome that. It is good for the UK, because it means the UK taxpayer is protected from the risk of having to pay up to sort out another EU country’s debt.
So, let me leave you with a final thought. Much of the focus at this summit has been on the Eurozone’s arrangements to get its own house in order. Three days ago, there was little focus on the EU budget and the need to protect our taxpayers. Britain has helped to put that vital issue on the agenda. Just as at home we inherited finances that were a complete mess, so too in Brussels we have inherited a budget deal completely out of touch with the economic situation we face across Europe.
I believe that as a result of Britain’s intervention, the spotlight has now shifted to reigning in the excesses of the EU budget. This will not be an easy debate. The Parliament, the Commission, and some member states will continue to oppose us, and it will take time, but I am absolutely clear that Britain’s national interest, and our highest priority in Europe, must lie in protecting British taxpayers from reckless spending in Europe. At a time when we are making painful decisions at home to put our economy back on track, I will not allow Brussels to derail it. We prevented a crazy 6% rise in the EU budget. We have made sure the EU budget must reflect domestic spending cuts, and we have protected the UK taxpayer from having to bail out EU countries that get themselves into trouble.
At this meeting, we have taken the first vital steps. There is a long way to go, but we have started a process, and we will stick at it. Thank you.