Merkel, Sarkozy, Cameron Tell EU’s Barroso to Rein In Spending

German Chancellor Angela Merkel, French President Nicolas Sarkozy and U.K. Prime Minister David Cameron told the European Commission to rein in spending as debt-laden member states face market pressure to cut deficits.

“European public spending cannot be exempt from the considerable efforts made by the member states to bring their public spending under control,” the three leaders, Dutch Prime Minister Mark Rutte and Finnish Prime Minister Mari Kiviniemi wrote in a letter to EU Commission President Jose Barroso.

“The action taken in 2011 to curb annual growth in European payment appropriations should therefore be stepped up progressively,” according to the letter released today. “Payment appropriations should increase, at most, by no more than inflation” over the next several years.

European governments are forced to keep a lid on spending to curb budget deficits that were inflated by the financial crisis and subsequent stimulus packages. They also face rising borrowing costs as they fund rescue plans for Greece and Ireland.