The Foreign Office is already sounding the retreat over the EU budget discussions. They imply that we cannot do more than work with Germany to keep the increase under control. They say that whilst we can veto the budget, the EU can always go on to month by month budgets if there is no long term agreement.
I think the budget is the best possible time and topic to highlight the difference between what the UK wants and what most Euro members want and need. A club advertised and sold to the UK people as a trade arrangement has become a project to create Europe as a federal country. The UK has to state clearly it wants no part of that mission. We want to trade with them, be friends with them, have sensible arrangements over flights and ferries, pipelines and communications links, maybe do some things together where both sides want to. We do not wish to be governed by them, be subject to a common wide ranging law, have to follow a foreign policy laid down on the continent or an immigration and criminal justice policy designed in Brussels. We want a different kind of relationship with them, or at the very least the veto restored over all important policy areas, so we can still make up our own minds if we wish.
The UK should state clearly why we regard much EU expenditure as marginal at best. In a budget crisis cutting EU spending would be an obvious relatively easy way of making some of the cuts we need. As a sovereign nation we should be able to do that. Just as Margaret Thatcher negotiated us a rebate, so this government needs to demand a cheaper membership for the UK wishing to be a trade member but not a fully integrated member of the EU, Euro and new political union. I appreciate many of you would rather just withdraw from the whole thing. There would still need to be negotiations over the issues of overlap if the UK electorate did vote to come out. As you appreciate, I have been trying to help secure us all a vote on this central issue of membership of the present EU, but a federally inclined Parliament refuses. The budget negotiations are likely to predate any new attempt to get a referendum, as nothing much has shifted in a Parliament which voted strongly against a referendum recently.
The UK could also set out how the overall budget could be cut for the benefit of all. It is unlikely they will see it that way, but it would highlight the paradox of the EU. The EU lectures states to cut spending and cut deficits, whilst making the task more difficult by putting up the bills.
If there is no agreement, moving to ad hoc monthly stand still budgets will not be comfortable for the Union. The UK should dig in and demand a better deal for us.