EU finance ministers have agreed to emergency talks after British Prime Minister David Cameron challenged a demand from the EU for an extra £1.7 billion by December 1, because the UK economy has done better than other EU members since 1995.
Cameron interrupted a meeting of EU leaders to tell Jose Manuel Barosso, the head of the European Commission, that the demand for extra cash from the UK was unacceptable.
The Prime Minister emphasized that a lot of money was being demanded and that it was not just a problem of dealing with Euroskeptic sections of the British media and public.
The demand from the EU will add about a fifth to the UK’s annual contribution of £8.6 billion (US$13.8 billion).
The bill comes after the EU modified how it works out how much each state should pay based on national income. The surcharge now includes estimations from illegal trade in the so-called black economy, such as prostitution and drugs.
“It is not acceptable, it an appalling way to behave,” Cameron told a press conference in Brussels on Friday. “I'm not paying that bill on December 1. If people think I am they've got another thing coming. It is not going to happen.”
A spokesman for the British government said they would be pressing Brussels to explain the bill and that the amount of money they were demanding needs “a full political-level discussion.”
“This money the European Commission was not expecting and does not need, and we will be working with other countries to do all we can to challenge this,” said a British spokesman.
Cameron was supported by Matteo Renzi, the prime minister of Italy, who has also been hit for extra payments by the EU.
But although other countries were also asked for extra cash, including €642 million ($814 million) from the Netherlands, figures seen by the Financial Times suggest that Britain has been asked for the most by far.
In contrast Germany and France actually received a rebate from the EU worth €779 million and €1 billion respectively.
Chancellor George Osborne was furious at the “totally unacceptable” financial demand and said the UK along with other member states whose economies had fared better had been given “no warning.”
“This is not the way an organization like the European Union should act. This organization is not working as it should and Britain’s relationship with this organization is not as we would wish it to be,” he said.
But an EU official insisted the cash demand was purely a “technical matter,” while Borosso said he was unaware of the issue.
The budget demand could not come at a more awkward time for Cameron, who is facing a general election next May in which one of the key battleground issues will be Europe.
The EU’s request also comes just weeks before a crucial by-election in Rochester and Strood, where the anti-EU UKIP is hoping to snatch a second seat from the Conservatives.
Several Tory MPs have described the financial demand as “illegal” and suggested that the UK should just refuse to pay.
“We are just being taken for ride. Roll on the referendum – this will just strengthen the resolve of the British public to get out of this superstate,” said Peter Bone, Conservative MP for Wellingborough.
While Conservative MEP Daniel Hannan pointed out that the extra money being demanded could fund 60,000 nurses and their pension schemes.
There was also little patience with the demand from the Labour and Liberal Democrat camps.
A spokesman for the Lib Dems said the demand for such a large amount of money “at the drop of a hat” was “unacceptable” and that the UK should work with other EU states who have also been asked for extra money to challenge the decision.
However the Shadow Chancellor Ed Balls questioned the Treasury’s insistence that they had only just found out about the request.
“How could [Cameron] suddenly be surprised about this, surely the Treasury has known about this for weeks and weeks and weeks?” he told the BBC.