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Nicholas Leonard: Sceptics seizing on crisis in bid to renegotiate EU relationship

Here's an intriguing question: what would you think is the most effective way of offering a bribe of billions of euro to the British prime minister, David Cameron, and his coalition government to persuade them to make a radical change in their financial policy?

Would you send a letter to 10 Downing Street marked 'Very Strictly Private and Confidential' or try to find a trusted go-between who could reach Cameron on a secure telephone line and set out your proposal?

It is hard to imagine that you would simply set out the terms of your bribe in an article for a Sunday newspaper but that, somewhat bizarrely, is what the president of the European Commission, Jose Manuel Barroso, did at the weekend.

In a scrappy and confused piece, Barroso said that the EU was willing to pay a lump sum of €25bn to the UK if the coalition, in turn, was willing to abandon the budget rebate negotiated in 1984 and which last year was worth about €3.3bn.

The chancellor, George Osborne, is so short of cash these days that getting a large windfall, which would be paid just before the next general election, must look superficially attractive.

But it took only a matter of hours for the Treasury yesterday to make it clear Barroso was not going to get a deal. Instead, eurosceptic Tory MPs are seizing on the crisis in the eurozone as a unique opportunity to try to renegotiate the entire basis of the relationship between the UK and the EU.

Many of them would like the UK to pull out completely but they know that Cameron would not accept this and that, to their coalition partners, the Liberal Democrats, it would be completely anathema.

Instead, they want the UK to use its veto and lobbying powers to try to reverse the stated aim of 'ever closer union' in the EU with a new commitment to focus on a lean, 'vibrant' free-trade approach which, they think, could liberate the EU from the shackles of bureaucracy in Brussels to become an effective services and industrial grouping.

Coming down mountains is notoriously as tricky as going up them and changing the direction of the EU towards a simple free-trade agreement, while avoiding the constant temptation for individual members to resort to protectionism, would be a difficult, maybe impossible, challenge.

The queen is the latest target of the Treasury in its efforts to run the UK on a leaner, meaner basis. In future, she is going to get a "sovereign grant", which will initially be worth about €40m a year and will be linked to the performance of the economy as a whole.

Moreover, for the first time, parliament is going to have the power to scrutinise royal spending in the same way as it monitors government departments. The aim, said Osborne, was to achieve "proper accountability and value for money".

The tighter rein on those who reign coincides with an awkward row over Osborne's plans to cut housing benefits. Conservative MPs were delighted a few months ago when he said that, in future, no one could get more financial help with their housing than the average UK national income (about €28,500 a year).

Thanks to the latest in a long series of embarrassing leaks from Whitehall departments, it is now revealed that the cutbacks could result in as many as 40,000 families losing their homes. Local councils would then have to find them temporary housing and that, in turn, would probably end up costing the government more than the €300m due to be saved by the cutbacks.

Cameron is finding out the hard way that the leaner, meaner approach to running things is not as simple as it looks.

Irish Independent