EU summit collapses; UK and Germany bond over budget

Money, money, money. No, I've not got my gold spandex on watching Abba on YouTube - I'll leave that until Saturday - I'm reading about the budget the EU summit tried to agree on for Europe for the next seven years.

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The latest meeting of the EU summit in Brussels disintegrated without the nations that make up our wonderful continent settling on a budget for the period 2014-2020.

The sticking point seems to be that the more provident countries formed an alliance rebuffing the €971bn proposed budget, prompting the president of the EU Council, Herman Van Rompuy, to bring the curtain down on this particular EU summit in discord.

Cameron and Merkel spearhead alliance at EU summit

There are aspects of David Cameron I truly detest with every gut-wrenching breath I take. But his stance in Europe has to be admired. Prior to this EU summit, critics lambasted the UK Prime Minister for isolating the UK philosophically in Europe as much as it is physically set adrift from the mainland.

But that all changed in one fell swoop. Standing firmly by Cameron's side, spearheading the alliance that point blank refused the seven year budget was none other that German chancellor Angela Merkel.

On either side of arguably the two most profitable countries' leaders were the Dutch and Swedish Prime Ministers, Mark Rutte and Fredrik Reinfeldt, respectively. The bottom line is that the sum is simply too much to commit to in the current economic climate with Austerity Measures looking set to be around until 2018, which we'll look at in today's business article.

UK is not alone in looking at further taxation

But this wind of change from Germany goes further than just protecting the interests of Das Vaterland. Merkel is reported to have been 'furious' at the EU summit with both Van Rompuy and European Commissioner José Manuel Barroso's attempts to isolate the UK on their stance. It seems the UK has many allies, with Denmark and Finland also offering support.

The real problem lies in the fact that many of the countries who've joined the EU more recently - and some of the more longstanding ones - have never been entirely strict about imposing taxes. Now that they are culpable under EU law, neither do their electorates like paying taxes (who does?) nor can those respective countries handle the responsibility of imposing them.

This was underlined by Cameron's summary following the collapse of last week's EU summit. The PM told reporters,
There were other countries I have worked with; together we're making sure that we were all standing up together for taxpayers and to make sure we have a fair outcome to this budget when we are cutting our budgets at home."

Whilst this new alliance may steal the headlines, don't ignore that very last sentiment. More 'cutting our budgets at home' to come, with Osborne eying another £10bn of the current welfare budget to be deployed elsewhere. More in the next report.