Merkel to charm London

Rather than hold awkward discussions in a large group, Chancellor Angela Merkel prefers to share a meal. On Wednesday evening she will sit down to a working dinner with British Prime Minister David Cameron and try to coax him into being more accommodating at the upcoming EU budget summit. At this summit, which will take place on November 22 and 23, leaders will discuss concrete figures for the new EU budget for the years 2014 through 2020.

"The budget debate is like a lightning rod for the ill-humor that's developed on both sides of the Channel," said Giles Merritt, Secretary-General of the Brussels-based think-tank Friends of Europe.

Haggling over the EU budget

Great Britain's attitude towards the European Union is currently more distanced than ever, so the stance it takes in talks about the EU budget could be a good indication of the future of Britain's EU policy.

Fierce debates have already taken place on the new seven-year budget, with the European Commission calling for a budget of some one trillion euros ($1.3 trillion) for the seven-year period starting in 2014. That's an increase of five percent on the budget from 2007-2013. The Cypriot presidency of the Council of the European Union would like to see 50 billion euros less in EU coffers than the Commission's demand. Germany, Sweden and France want at least 100 billion less. And the British?

British Prime Minister David Cameron himself wants to keep the budget as it stands, which would undercut the Commission's suggestion by more than 200 billion euros. But for the majority of parliamentarians in the British House of Commons, even that doesn't go far enough. They not only want to freeze it, they want to slash it. Cameron is under pressure from all sides.

In this context, budget negotiations will be extremely difficult - even though the amount in question is comparatively slim. Just one percent of gross national income flows into the EU budget. The national budgets of most EU member states, by contrast, swallow up 40 to 50 percent of national gross income.

Tense atmosphere

The upcoming budget summit and the euroskeptic movement in Great Britain will be closely monitored. The mood is tense in Brussels following the announcement in mid-October of the withdrawal from a total of 130 European programs for cooperation on judiciary and security issues, the debate over a referendum for remaining in the EU, and the euro-critical course the vote took last week in the House of Commons.

Marco Incerti, of the Brussels-based research institute Ceps, analyzes it as follows: "Not all that long ago, EU partners wanted to keep Britain on board at any cost. But now they've realized that that isn't working." So far the parties have managed to compromise, but now both sides are frustrated. "People will have to start the discussion all over again at some point," Incerti says.

Great Britain should make up its mind, says EU parliamentarian Marcus Ferber, whether it wants to truly play a constructive role in Europe and be actively involved, or whether it just wants to participate in the market. It could, like Norway, do the latter - by working the European market without being an EU member.

Guy Verhofstadt, former Belgian Prime Minister and chairperson of the liberal EU parliamentary group, holds a similar view: that there is a "fundamental problem" with Great Britain in the EU. "It wants to be in the EU, but is hardly ever prepared to be involved any strategies. It's hard to be a member of the club but not play the club's game," Verhofstadt notes.

And this is why Giles Merritt of Friends of Europe believes there is a 50-50 chance that Great Britain will leave the EU within the next five years. 

Cooperating rather than passing the buck

Fabrizio Fiorilli, spokesperson for EU Budget Commissioner Janusz Lewandowski, cautions against pushing Great Britain to the brink. It's every state's right to put in a veto during negotiations, he says, adding that Britain is not the only one with special requests for the upcoming negotiations. Denmark has also announced that it will veto budget talks if its contribution payments are not reduced. And France has said it would not agree to further cuts in the agriculture sector.

Fiorilli therefore expects negotiations to be very difficult. But that's no surprise, since the budget talks will affect all areas of the EU and indicate the direction it will take in the future.

If no new budget is agreed upon by the end of 2013, the current one will remain in place - a result that would not correlate with anyone's wishes, whether British, German, or eastern European. So Fiorilli is optimistic: "The ray of hope is that everyone will realize that if no new budget emerges it will harm each and every one of us."

It's now up to Angela Merkel to convince David Cameron of this. "Brussels is hoping she will be able to charm him," says Merritt. If their talk in London lays the groundwork for a strife-free EU summit and an upcoming agreement on the budget, this will be seen as a good sign as far as Britain's overall position within the EU is concerned.