Cameron seizes victory with cut to EU budget - The Times (subscription)

The age of austerity hit the EU yesterday after David Cameron secured an unprecedented cut to its budget.

After gruelling talks lasting more than 25 hours, the Prime Minister emerged as the main victor as he won the crucial support of Germany to secure the first budget cut in the EU's 55-year history.

A two-year pay freeze for Brussels officials will form part of a €34 billion (£28.7 billion) reduction for 2014 to 2020, in a package that was praised by Tory Eurosceptics at Westminster.

The Prime Minister was quick to declare victory yesterday. He said that he was "proud" of the cut, which was "part of a new settlement" he was seeking to build between Britain and the EU.

"People do understand that the major problem we had was that the credit card limit for the European Union has been too high," he said. "There are lots of people who wanted to put it up and at last someone has said this has got to stop."

Angela Merkel, the German Chancellor, resisted French pleas to oppose the depth of cuts being demanded by Mr Cameron. But the EU's huge agricultural payments, which benefit French farmers, were largely preserved. President Hollande had positioned himself as the champion of spending for growth in areas such as research and infrastructure.

The Prime Minister also conceded that UK contributions to the EU would rise over the next seven years as funds for Eastern Europe increase. Cuts to the UK's net payments were never possible under its existing EU agreements.

But there was no doubt that Mr Cameron was a big winner from the summit, having headed to Brussels demanding "tens of billions" of further cuts from the last proposed budget of €942 billion. The figure agreed yesterday was €908.4 billion. The Prime Minister said that even compared with the level of spending in 2012, the next seven-year budget was €24 billion lower.

He also protected Britain's £3 billion rebate, secured by Margaret Thatcher in 1984, despite repeated attempts to cut it. "It was attacked from every side, but I fought off these attempts," he said.

Mr Hollande argued that he and Mr Cameron had met halfway on the seven-year payments figure and insisted that there had been no losers at the summit. The French leader said that he had sought a budget of €930 billion at the outset, while Mr Cameron had asked for €885 billion. The final outcome was nearer the French figure, Mr Hollande said. Challenged about the Cameron-Merkel alliance by the French media, he said: "Mrs Merkel worked as much as possible to promote agreement among everyone."

Mrs Merkel's support for Mr Cameron and the disciplinarian northern bloc reflected both her belief in the need for more rigour in EU spending and her desire that Britain should not be isolated further in Europe.

"It is important that we have also set a sign for solidarity," she said. "Results sometimes take time, but the European Union is capable of reaching results."

However, the deal could yet be blocked by the European Parliament, which has traditionally backed higher spending. Its president, Martin Schulz, threatened to use a secret ballot next month to encourage MEPs to vote down the budget. Eurosceptics on the Tory back benches claimed that Mr Cameron's deal vindicated their rebellion in October, when they voted with Labour to demand cuts in the EU budget.

Douglas Carswell said Mr Cameron deserved "three hearty cheers". "Under pressure from the taxpayer, MPs instructed ministers not to hand over extra amounts of money," he said. "And ministers appear to have responded by securing a deal that does precisely that. Well done to all those MPs who did the right thing. Just please do not call us 'rebels' for doing what Parliament is there to do."