The austerity philosophy of U.K. leaders is about to insinuate itself into the European Union budget, which already covers a region in which national austerity has become a habit, and perhaps not a good one.
Many economists continue to argue that a lack of stimulus in weak nations such as Spain and Greece will damn them to years of recession. The British insist that the rest of Europe cannot solve its financial problems via what it sees as overspending.
After an all-night bargaining session interspersed with catnaps on couches at EU headquarters in Brussels, the leaders reassembled at 6:30 a.m. to consider a 2014-2020 spending ceiling of 960 billion euros ($1.3 trillion), down from an original proposal of 1.047 trillion euros and less than the 994 billion euros spent in the current budget cycle.
At the center of the controversy was (U.K. PM) Cameron, making his first EU summit appearance since announcing plans for a referendum that could result in Britain leaving the 27-nation bloc as early as 2017. Britain’s demands for savings ran into opposition from France, Italy and eastern and southern European economies keen to tap EU subsidies.
“The numbers that were put forward were much too high,” Cameron told reporters before the summit started yesterday afternoon. “They need to come down, and if they don’t come down, there won’t be a deal.”