David Cameron may not placate his backbenchers by threatening a veto now — but he might in future

By Peter Hoskin
_{Follow Peter on Twitter}

As the Spectator’s Isabel Hardman reports, the number of MPs who have signed up to the amendment put forward by Marks Pritchard and Reckless — calling for a real-terms cut in the EU Budget across the years 2014-2020 — stands at 35 and rising. It’s very possible that the final total could top last year’s rebellion over Europe, even with the more PM-friendly amendment that Jacob Rees-Mogg and Peter Bone tabled this morning.

And so Mr Cameron will likely go to next month’s Eurosummit with his backbenchers’ demands for cuts still ringing in his ears. And he’ll also know that a veto probably won’t be enough to satisfy them. If there isn’t unanimous agreement on Europe’s Multiannual Financial Framework (MFF) by the end of next year, then the 2013 Budget will be rolled over into 2014 with an extra 2 per cent slapped on top to account for inflation — a real terms freeze, but still more than the Prime Minister wants, as he’s said to be basing his proposed freeze on 2011 payment levels.

So if the PM is to achieve real savings for Britain, it seems his best shot is probably a grand bargain over the composition of the EU Budget, of the sort presented by Will Straw on this site earlier, or by Open Europe’s Mats Persson in the past. But judging by today’s shenanigans, Europe isn’t particularly in the mood for bargaining at the moment. Cyprus — currently occupying the presidency of the Europe Council — presented an alternative MFF for discussion this morning. It’s £50 billion lower than the European Commission’s proposal, but is still over £50 billion higher than Britain is prepared to countenance. And it went down predictably badly.

Which brings me, finally, to the words of the PM’s spokesman earlier — who sounded remarkably serene about the prospect of stalemate at next month’s summit. Asked about what would happen if a deal isn’t reached, he replied, “The day afterwards, nothing. The day after that? Not a great deal. The week after? Not much.” No doubt he was referring to the fact that negotiations for the MFF can, in theory, continue into next year, so nothing has to be decided yet. But I wonder if Downing Street also has something more mischievous in mind; something captured in this useful summary by Peter Becker:

“...many lines of European expenditure are dependent upon the successful negotiation of a new MFF. The multiannual programmes in cohesion policy, the European Agricultural Fund for Rural Development of the second pillar of CAP and the multiannual framework programme for research will all end on 31st December 2013. Without new legislation, the European Union is not allowed to continue the programmes let alone to launch new spending programmes. And without a new MFF there will be no legislation for new multiannual programmes.

Thus, it’s not the question who can and will be prepared to live on with the budgetary status quo and who will play the game really hard. A failure would mean that the EU will not be able to continue its multiannual programmes to help poorer regions, to improve competitiveness, to finance European student programmes etc. Deadlock in the European financial framework negotiations would mean serious repercussions for the European integration process as such.”

In other words, the possibility of a British veto might not mean much to anyone at the moment. But if Downing Street plays the waiting game, and is able to hold on until the end of next year, it may squeeze much more out of those countries that are currently set against the cuts. 31st December 2013 — not now — is set up to be Europe’s barrel-of-a-gun moment.