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Britain and other European Union countries put their weight behind Franco-German calls for tougher eurozone rules at a summit today (29 October), agreeing on "limited" changes to the EU's main treaty in return for a cap on the EU budget.

Officials struggled to deliver the message that legal tricks could accommodate both Germany's push for treaty change and conflicting calls from several other countries which had rejected the idea. Regarding treaty change, the key word is "simplified", officials explained. A simplified provision, enshrined in Article 48, Section 6 of the Lisbon Treaty, allows member countries to unanimously adopt a decision amending all or part of the main elements of the Treaty on the Functioning of the EU (TFEU), which governs how the Union carries out its work. Such a procedure would avoid the need to call a constitutional convention, experts explained. In addition, the European Parliament would only be "consulted" instead of enjoying full voting rights as part of the normal co-decision procedure. The changes to the treaty are to be settled by mid-2013, before the expiry of the present emergency fund agreed earlier this year to deal with crises such as the one that hit Greece. The objective is to replace that with a permanent mechanism. The simplified treaty change procedure will not enter into force until it is approved by member states in accordance with their constitutions. Most EU countries are expected to ratify the decision by a simplified procedure in their parliaments. As for Ireland, it remains unclear whether a change effected in this way would require another referendum.

UK Prime Minister David Cameron appears to have been instrumental in forging a deal, lending his backing to Franco-German calls for treaty change in return for keeping a lid on the EU's 2011 budget. 11 member states, including Britain, France and Germany, will send a letter to the European Commission and Parliament today saying that their plans to increase the EU budget by 5.9% in 2011 are "especially unacceptable at a time when we are having to take difficult decisions at national level to control public expenditure". The letter was signed by the leaders of the UK, Germany, France, the Netherlands, Sweden, the Czech Republic, Denmark, Austria, Finland, Slovenia and Estonia. The bloc's finance ministers had earlier voted for a limited increase in the EU budget of 2.9%. "We are clear that we cannot accept any more than the 2.9% increase proposed by the finance ministers," the leaders say in the letter. Cameron argued that a planned increase in the EU budget would cost his country's taxpayers the equivalent of one billion euros. The 2.9% rise would still cost them £435m (500m euros). Parliament to fight back By agreeing to cap the budget, EU leaders set themselves on a collision course with the European parliament, which has the power to approve or reject the proposed budget. Negotiations between the European Parliament and the Council, which represents the 27 member countries, over the EU's 2011 budget kicked off on 27 October (see 'Background'). "If Cameron is prepared to give up the British rebate [...] then we can for sure discuss a reduction of the budget," said Martin Schulz, leader of the Socialist & Democrats group in the European Parliament, speaking to EUX.TV, the European policy news channel powered by EurActiv. "The European budget is not to be compared with national budgets," said Schulz. "There are no own resources. We have no European taxes. We have no own money. It is money coming from the member states. We can make no debts. The British budget must be reduced because there is enormous debt. Europe has no debts," he said.

The EU's three largest member states - Germany, France and the UK - are set to publish a text on Saturday (18 December), calling for spending restraint in the bloc's long-term financial framework (post 2013). Initiated by British Prime Minister David Cameron, the letter will call for a freeze in the long-term spending plan, excluding inflation, and also seek to rein in the bloc's 2012 and 2013 annual budgets.

The move puts the group of large member states on a direct collision course with the Brussels-based EU institutions, already battered after their call for a six percent rise in next year's EU budget was cut in half by national capitals. With the commission not set to publish formal proposals on the multi-annual financial framework until June 2011, the EU institution may also perceive London's latest initiative as a move to undermine its right of initiative. Still undecided, the framework's period is likely to cover 2014-2020. It is then broken down into annual budgets. Poland and other eastern countries may also be horrified by the attempt to curb future EU payments of which newer member states are large recipients. But other EU members are also set to sign the austerity-letter, with Austria, Italy and Finland among the names suggested by diplomats.

European Commission President Jose Manuel Barroso sought to downplay the letter's significance. "We know different groups of member states sometimes try to position themselves," he said. "What is important in the end is the commission's proposal that is being put forward [next June], and then the discussions on the basis of that proposal." European Council President Herman Van Rompuy was also phlegmatic. "If there are letters, we are very polite people, we read our letters we receive," he said.