EU says UK must pay up

European Union Budget Commissioner Jacek Dominik said Monday in Brussels that the European Union has warned Britain that the substantial EU budgetary rebate from which the country has benefited for thirty years will be at risk if Britain attempts to modify EU budget adjustment rules.

Dominik said a modification of those rules would in fact be necessary for Britain to avoid timely payment to the EU of 2.1 billion euros ($2.67 billion) in supplementary budget contributions by the first business day in December.

Dominik warned that if the UK demanded changes in the EU's budget rules, it would put at risk the special rebate on budget contributions that the UK has enjoyed since then-Prime Minister Margaret Thatcher negotiated it in 1984 - a rebate that no other EU member country enjoys.

"If you open this act, you open a Pandora's Box," the Commissioner said.

The same set of rules and data used to calculate Britain's supplementary contribution for the year were also used to calculate Britain's special rebate, Dominik noted, saying Britain's rebate for 2014 alone totalled 5.9 billion euros - a sum the data suggest should increase by a further half billion euros next year.

"I think it would be extremely difficult to explain to other member states why on Monday you like this data, [but] on Tuesday you don't like it," Dominik said.

Cameron's ostentatious outrage questioned

On Friday (24.10.2014), British Prime Minister David Cameron had made a great show of surprise and anger at the EU's presentation of a supplementary budget contribution invoice to the UK of 2.1 billion euros.

Cameron had interrupted a European leaders' summit meeting in Brussels on Friday to announce he would refuse to pay the contribution on the required date, and demanded an emergency meeting of finance ministers to investigate how the amount was arrived at.

On Monday in London, Cameron followed up by telling the British parliament that "we're not paying two billion euros on the first of December and we're not paying ... a sum anything like that."

EU officials, in turn, expressed surprise at Cameron's apparent outrage, saying that they had advised UK Treasury officials of the budget adjustment well before the Brussels leaders' summit.

The latest anti-Brussels flap in Britain is occurring at a time when Euroskeptic political parties have been gaining support in the UK as well as other countries.

The UK is scheduled to hold a national election in May 2014, and Cameron's Conservative Party is facing stiff competition on its right wing from the anti-EU UK Independence Party (UKIP). UKIP won an unprecedented 23 of the UK's 76 seats in the European Parliament elections of May 2014.

Annual budget adjustment standard procedure

The EU's budget commissioner said Monday that the UK's required supplemental contribution was calculated according to standard, well-established EU budget adjustment rules.

Macroeconomic data compare how well the economies of different EU member countries are doing. Common rules and data determine how much money each member country is expected to put into the EU's kitty - and countries that have been doing a little better are expected to put in a little more.

"It came to us a little bit as a surprise that ... a typical process, an annual process, repeated for so many years, creates suddenly such a problem," Dominik said.

He noted that the budget top-up data had been transmitted to member states, including to the UK Treasury, on October 17.

"Up to this moment, there was no single signal from the UK administration that they have a problem with this figure," he added.

France presents newest budget promises

The EU no longer concerns itself exclusively with Brussels' own budget. Since the most recent reform of the EU's Stability and Growth Pact in 2011, the new "Euro Plus Pact" has given the EU powers to confirm or reject national budgets of member countries, if these risk overstepping the agreed maximum of a 3-percent deficit.

France presented its newest national government budget projections for 2015 on Monday in Paris. Under pressure by EU budget disciplinarians like Germany and Finland to reduce spending, France's Minister of Finance, Michel Sapin, announced that the public deficit would be 3.6 to 3.7 billion euros smaller than had been expected in the previous estimate.

The UK's economy has been doing better than expected in recent years - that's why it owes a supplemental 2.1 billion euros to the European Union budget.

France, in contrast, has been doing less well, and so its contribution to the EU budget is expected to be 300 to 600 million euros smaller than expected in a previous set of estimates, the French finance ministry said.