Chancellor George Osborne has promised to get a “better deal” for Britain and argue the case against the £1.7 billion bill at a meeting of EU finance ministers in Brussels.
David Cameron has consistently said that the UK will not pay any extra money to the EU by the 1 December deadline, but EU officials have warned that failure to pay by the deadline would incur interest charges of millions of pounds per day.
The UK was presented with a bill for a further £1.7 billion payment to the EU because Britain has under-reported its GDP since 1995, as it did not previously include the black economy and service sectors, as agreed under EU rules.
Cameron and Osborne have consistently argued for the bill to be cut, but they have found little support from other countries with the EU, including other nations from northern Europe that often create alliances with the UK. Britain has happily welcomed rebates when they have been due from the EU, and finance ministers from other EU nations have warned that a failure to pay would open a “Pandora’s Box”.
The bill comes at an embarrassing time for the Conservative party, as Cameron attempts to placate the Eurosceptics in his party by promising an in/out referendum in 2015 and trying to show he is a hard-nosed negotiator with the EU.
While Osborne may be able to negotiate a deal where the UK pays the full bill in interest-free monthly instalments, unless the bill is reduced Cameron will struggle to sell the deal as a victory at home.