More confused or at least confusing analysis of the EU Budget in the Daily Telegraph:

The Prime Minister last week promised to fight plans to increase the European Commission’s budget by 5.9 per cent and said its 2011 budget should be frozen or cut.

Last night, however, British sources conceded that the £107 billion EU budget will rise by at least £3.15 billion in 2011, with Britain’s share set to grow by £435 million.

The budget deal, to be discussed at a Brussels summit today, is likely to trigger protests from many Conservative MPs, who want a cut in Britain’s payments to Europe.

The European Parliament has angered voters and EU leaders by demanding a 5.9 per cent rise in the European Commission budget for 2011.

The BBC piles in:

Prime Minister David Cameron has phoned several European leaders, hours before an EU summit, urging them to reject a big rise in the organisation’s budget.

He spoke to German Chancellor Angela Merkel and French President Nicolas Sarkozy among others and argued for the "lowest possible" increase.

His plea came amid fears that a 6% rise would cost the UK another £900m a year.

Labour’s Wayne David accused Mr Cameron of "vacuous rhetoric" on Europe and said he should demand a budget freeze

Folks. Listen carefully.

As previously explained, EU budgets are agreed in slabs called the Financial Perspective (FP). We are currently plodding through the 2007-2013 Perspective.

Spending by any given country flutuates during the Perspective period. But in our case it is expected to rise over that period, in part because a lot of EU money is going to the new member states (esp Poland) and it takes a while for them to get round to drawing it down.

In other words, the UK has both agreed and budgeted for what we are currently getting. Within that no doubt there is some scope for haggling as to what happens in any one coming year. But not much, as the funds are in effect pre-committed.

A totally different – and far more important – story is the next FP negotiation coming into view. There a huge amount is at stake. What sort of increase (in real/absolute/nominal terms) might be agreed for funding common EU schemes? Or will there be a cut (in real/absolute/nominal terms)?

NB that trying to identify what IS an increase or a cut is no easy task. 

Once we get into serious EU Budget negotiating for the next FP period, the UK as a major net contributor has to decide just how tough it wants to be. It surely has to be very tough: it would be intolerable politically to be carving back domestic budgets and increasing taxpayers’ contributions to EU spending.

This issue will get entangled with what others want. Germany is fed up with being forced to pay for the fecklessness of other Eurozone countries, and hankers after Treaty changes.

Can the UK go along with Treaty change as Germany wants IF Germany accepts EU Budget cuts in serious proportions, trading Less EU Money for More Honest EU Money?

The Daily Telegraph hints that this is what is happening:

Mr Cameron spoke to Mrs Merkel and Mr Sarkozy by telephone yesterday.

Government sources said that Mr Cameron will only agree to the Franco-German plan for new EU rules in exchange for support over the EU budget.

The fascinating negotiating theory angle of all this lies in the fact that in the areas of Treaty change and Budget voting all 27 EU member states have a veto. So it comes down to a stirring game of chicken – who dares hold out to the very very end?

And if you plan to do so, is it best to say so at the start? Or stay quiet and watch the ghastly battle unfold?

As for Labour’s Shadow Europe Minister Wayne David MP, he should keep stay modestly in the shadows.

It was Labour who negotiated the current Financial Perspective which David Cameron is now faced with, when PM Tony Blair in 2005 hauled the mewling (mEUling?) EU back up on to its feet after the French/Dutch referenda debacles. T Blair should have driven a far harder bargain at that point, but didn’t.

Nothing more vacuous than that.