By Thomas Lauritzen in Brussels and Jakob Hvide Beim in Strasbourg

Prime Minister Helle Thorning-Schmidt has dug her heels in and rejected a rebate proposal from EU President Herman van Rompuy as it is too low, maintaining Denmark’s demand for DKK 1 billion per year.

“At the weekend we received a rebate offer from van Rompuy, but it was some hundreds of millions of kroner lower than we have asked for. So we have said no,” a source close to the government tells politiken.dk.

The statement confirms information from sources close to van Rompuy, who is heading the 7-year budget negotiations that begin in Brussels tomorrow. Similar signals have been received from the EU Commission, whose president, José Manuel Barroso is also involved in the negotiations.

“The feeling is that a rebate for Denmark is unavoidable, but that it also unavoidable that the rebate must be lower than the one Denmark has demanded,” a Commission source says.

The van Rompuy cabinet is currently in the process of putting the final touches to a new proposal for the EU’s 2014-2020 budget. The proposal is to be presented to EU heads of state and government on Thursday afternoon at around 4 p.m.

Several sources say that there is still a possibility that the new proposal will include a lower rebate to Denmark in the region of DK600 million to DKK800 million per year over the seven year budget period.

Another option would be to cut back on rebates to other EU countries in order to fulfil Danish demands.

Great Britain, Germany, the Netherlands, Sweden and Austria currently all have rebates, although the Austrian rebate is expected to be removed.

Thorning-Schmidt told the Parliamentary Europe Committee today that Denmark would be able to accept compensation in the form of cutbacks in its contributions to rebates for other countries.

But irrespective of how the DKK 1 billion for Denmark is put together, the prime minister has dug her heels in deep.

The issue heralds a battle of nerves over Denmark’s demands, with all the signs suggesting that the summit will develop into a dramatic meeting about the EU’s coffers.

“As things stand we have not received the rebate we want,” a diplomat says.

Prime Minister Helle Thorning-Schmidt has repeatedly threatened to veto the EU budget if Denmark’s rebate demands are not met.

There are also signs of some sympathy for the Danish position among leading members of the European Parliament.

“The rule should be that no countries get a rebate at all. But that rule was set aside a long time ago and continues to be so. So I am not surprised that other countries have the same idea,” says Parliament President Martin Schultz.

Hannes Swoboda, the group chair of the European socialists and social democrats is also against rebates in principle.

“But I understand fully well why the Danish government asks why it doesn’t have a rebate when others do,” Swoboda tells politiken.dk.

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