British PM claims victory in EU budget talks

Prime Minister David Cameron claimed victory in his battle to slash the EU budget Friday, saying marathon talks proved that his promise of a referendum on EU membership had not left Britain isolated.

Cameron had vowed to accept nothing less than a real terms freeze in the seven-year budget as he demanded savings to reflect austerity measures being imposed across the continent and as a necessary step towards reform of the bloc.

After more than 24 hours of wrangling in Brussels, leaders were looking at a cut in spending of around three percent compared with the previous budget.

"I have been determined to cut the spending limits and so to cut the amount that Brussels can spend. And working with like-minded allies I have achieved that today," a weary-looking Cameron told reporters after the deal was done.

"Every previous time these multi-year deals have been agreed, spending has gone up. Not this time."

Cameron said the budget represented a "good deal for British taxpayers" though he conceded that Britain's contributions to the EU will actually go up under a long-agreed adjustment in its rebate, but by far less than before the deal was struck.

The prime minister made it clear for months that he would veto any agreement that did not reduce European Union spending, a demand which caused the last budget summit in November to collapse without a deal.

But critics had warned he had left himself with few allies following his veto of a crucial eurozone deal in 2011 and his pledge last month to hold a referendum on Britain's membership of the EU by the end of 2017.

Cameron rejected this analysis on Friday, saying he had worked closely with German Chancellor Angela Merkel to agree the budget deal, as well as with other net contributors to the EU in northern Europe.

"Working with the Dutch, the Danes, the Swedes, working very closely with Angela Merkel, that is not isolation -- that is Britain with allies getting things done in Europe, coming up with good results," the premier said.

Cameron's determination to slash EU spending had put him at odds with countries such as France who were concerned about cutting investment that could boost growth and tackle the European Union's record unemployment.

The tensions were laid bare when French President Francois Hollande pulled out of a pre-summit meeting with Cameron on Thursday, although officials insisted it was a scheduling problem, not a snub.

The British leader on Friday said that "obviously on this issue we had some debates and some discussions" but that the two leaders had talked positively about France's military operation in Mali, which Britain is supporting.

Cameron's promise to hold a referendum succeeded in calming eurosceptics in his Conservative party but sparked concerns in many European capitals by putting the prospect of a British exit starkly on the table.

According to one well-placed diplomat, Italian premier Mario Monti said at the negotiating table: "We cannot accept a deal dictated by Great Britain -- a country we can't even say with certainty will still be in the EU in 2017."

Cameron denied that the question mark over Britain's future had undermined his position, saying: "We always have our arguments and disagreements around the council table but people know Britain is a serious player."

In his speech on January 23 setting out his referendum plans, Cameron said he believed Britain should play an active role in the EU but that the bloc must reform, particularly in reining in its bloated bureaucracy.

Nigel Farage, the leader of the UK Independence Party (UKIP), said the deal agreed on Friday was probably the best Cameron could get in the circumstances but warned it would not quell growing anti-European sentiment in Britain.

"The argument in Britain now is about 'in' or 'out', it's not about shaving a few pennies off," the European lawmaker told AFP.