Angela merkel

David Cameron is setting off with his children to visit Angela Merkel on Friday. It's part of his EU reform mission that started and was thrown off course on Monday following the death of Margaret Thatcher. As I blogged back then, the circumstances aren't perfect, and one of the reasons for that is that France and Germany recently snubbed an invitation to be involved in the UK's 'balance of competences' review. But today Cameron tried to play down the significance of this. He told Adam Boulton: 'Our review of competences was always and will be a British exercise. We didn't particularly, that story was… anyone's free to feed into our review, but that piece of work is a British piece of work. For years people said you'll never have the European budget cut, I've got it cut.

Germany has elections on the way, Spain is just about holding a lid on its economic crisis while keeping a wary eye on the uphill struggle that its neighbour Portugal faces to avoid a second bailout, and François Hollande has his own political crisis to deal with (and is apparently also mourning the death of a camel). So is now really the best time for David Cameron to pitch up in Madrid, Paris and Berlin to argue for reform of the European Union? The PM visits the first two cities today, with a meeting with Angela Merkel planned for later this week on the same topic.

There’s ‘no secret plot to get Britain out of the EU’ declared David Lidington on the Sunday Politics. In an interview with Andrew Neil, the Europe Minister was determinedly vague on the issue of what powers the next Conservative manifesto will seek a mandate to repatriate. But he made clear that the free movement of people is not going to be part of the renegotiation nor will Britain seek the right to strike its own trade deals with other countries. Having given the speech, David Cameron and his team don’t want to give a running commentary on what they might or might not seek to change about Britain’s terms of EU membership. Indeed, I suspect that they would like to go into the next election seeking as vague as possible a mandate.

Angela Merkel’s statement yesterday was a big fillip to David Cameron’s European strategy as it suggested renegotiation was possible. One senior government source called it ‘as good as we could have hoped for'. I understand that Merkel and her officials have indicated to the Cameron circle that they want Britain to stay in the EU and are prepared to consider Britain’s concerns. But Merkel does not wish to look like she is interfering in British domestic politics; she doesn’t want to appear to be endorsing the Cameron approach. Secondly, she does not yet know how much room for manoeuvre she has.

The major gamble that David Cameron is taking with his strategy on Europe is, as James explains in this week's magazine, that he's relying on signals from Angela Merkel that she is keen to help him with a renegotiation. She has certainly given a few of those in recent months. But today one of her colleagues in the Christian Democrat party undermined some of the confidence that has been building about Merkel's position. Gunther Krichbaum is the chair of the Bundestag's European Affairs Committee, and is leading a two-day cross-party delegation to Britain. He believes a renegotiation would open a 'Pandora's Box', and that Britain should tread carefully: 'There is certainly a risk that [a referendum] could paralyse efforts for a better Europe and deeper integration.

So, the EU budget summit has — as expected — broken up without agreement. We await the date of the next discussion of the matter. But for the moment it means there is nothing that David Cameron will have to try to pilot through parliament. Talking to those close to the Prime Minister, I sense that they are not unhappy with this conclusion. In Downing Street, they feel that their criticisms of the running costs of the EU bureaucracy have struck a chord with other contributor countries. They’re also pleased that Cameron has managed to strike a tough negotiating position without isolating himself. But what is giving them the greatest satisfaction is how solicitous of the British position Angela Merkel was. They regard this as a promising sign for the coming renegotiation.

The Sunday Papers and the broadcast shows are packed with accounts of Britain’s fractious relationship with the European Union, and what that means for David Cameron. The Observer gives space to a poll, the headline of which says that 56 per cent of Britons would ‘probably or definitely’ vote to leave the EU against 30 per cent who would probably or definitely vote to remain in the union. The Independent on Sunday carries a ComRes poll on the more immediate question of next week’s EU budget discussions. The findings will give Mr Cameron a headache: 66 per cent of voters want the budget ‘cut rather than frozen’. The voters will be disappointed: a cut is a fantasy. Even a freeze is looking unlikely because recipient countries are likely to oppose it.

Are Britain and Germany heading for an almightily clash over the future of the EU? In this week's Spectator, Christopher Caldwell argues that Angela Merkel has had enough of Britain's position and is out to give David Cameron a kicking over Britain's lack of solidarity with her nation. On the latest View from 22 podcast, Fraser Nelson explains the significance of about is about to happen: 'The [problem is the] extent to which Europeans don't understand us, they can not get that for Britain, it is an issue of sovereignty. They keep thinking well the Brits don't want to agree the next budget, let's give them a few sweeteners — a subsidy here, a commissioner there. They are trying to horse trade with us, where for us now it's gone beyond that.

Will David Cameron be denied his veto moment after all? Brussels sources appear to think the European Union budget summit on 22 and 23 November could still be cancelled. A report from Italian wire service ANSA quotes one source saying 'everything indicates that it will be impossible to overcome the British veto' and that cancelling the summit remains an option. This follows reports recently that Angela Merkel was threatening to cancel the summit as it was pointless if Britain was going to veto any increase above one in line with inflation. The German Chancellor had a lengthy dinner with Cameron to discuss the summit on Wednesday night, but their talks haven't stopped the European rumour mill.

David Cameron and Angela Merkel are eating dinner together tonight, over which they will discuss the forthcoming European Budget summit. The discussion may make even the sweetest crème brûlée taste rather sour, with Cameron continuing to threaten to veto anything above a real-terms freeze in the budget. He has told reporters following him around on his tour of the Middle East that he will make the argument for a freeze 'with vigour'. As she arrives in Downing Street, Merkel will be mindful, though, that she has a key role in trying to reach a consensus between the British position and the desire of other countries in the union for more money.

The EU budget negotiation, now a month away, promises to be David Cameron’s next big European test. The Prime Minister has repeatedly declared that he wants to see the EU budget frozen at 2011 levels and that he’s prepared to use the need for unanimity to achieve that. The Economist this week has a very useful scene-setter for the budget talks. It sketches the contours thus: ‘Countries are coalescing around loose (yet often divided) groups. There are the 'friends of cohesion': the net recipients of regional spending, such as Poland, Hungary and the Baltic states. And there are the 'friends of better spending': the net contributors, such as Germany, France, Britain and several northern European states.

David Cameron appears to be looking for a suite of examples for his party that he's still fighting their corner. He's about to deliver his speech on offenders, and his spokesman has just suggested he's up for a real scrap on the European Union budget, too. The FT's splash this morning is that Angela Merkel is threatening to cancel next month's European budget summit if Britain refuses to approve any other deal than a total freeze on spending. The paper reports that Merkel believes there is no point in holding the summit if Cameron is going to veto any deal on the table. The problem for the German Chancellor is that if Cameron vetoes a deal, it will be good for him politically, but bad for Merkel as Germany will lose its rebate and therefore will have to contribute more.

The Prime Minister and Angela Merkel spoke last night on the phone to discuss the European Council meeting later this week. Downing Street said the pair 'agreed that further work is needed before agreement can be reached' on banking union, which is a coded acknowledgement that David Cameron is concerned the current proposals are not in Britain's interest and do not currently protect the single market and that he will push for greater compromise when leaders meet. This is all part of the Prime Minister's big Europe week. He has a Cabinet meeting this morning, and as its members are increasingly piling pressure on Cameron for a referendum on Britain's membership of the European Union, the topic may well come up.

In case you were in any doubt about how committed eurozone leaders are to the survival of the single currency, Angela Merkel has put out another statement on doing 'everything possible to protect the eurozone', this time with Italian Prime Minister Mario Monti. The pair had a phone conversation on Sunday and their remarks follow the joint statement released by Merkel and François Hollande on Friday, and Mario Draghi's announcement last Thursday that the European Central Bank would do 'whatever it takes' to protect the euro. The markets are looking forward to something decisive later today as US Treasury Secretary Tim Geithner arrives in Europe to meet German finance minister Wolfgang Schaeuble and then Draghi later on.