The Danes are set to get a yearly rebate of 1 billion Danish crowns (€134 million), the country's first, according to the newest EU budget proposal by European Council President Herman Van Rompuy.

Danish Prime Minister Helle Thorning-Schmidt had in autumn indicated she would be willing to veto the EU budget if her country didn't get a rebate in the new EU budget for 2014-2020.

The Danish rebate was confirmed by a Council source who cautioned that the budget negotiations were not yet over.

Denmark has for years been unhappy with the rebate system, claiming that the country finances other member states' rebates.

Other EU states with big net contributions such as Britain, Germany, Sweden, the Netherlands and Austria already get rebates.

In October 2012, Thorning-Schmidt told the Danish parliamentary committee on European affairs: "We are going to get our rebate, and if we don't get our rebate, then we will have to use the veto. It's very, very simple."

The rebate has been a big issue for the Danish red-green coalition government as it has already included the anticipated rebate in its tax reform plans.

Opening Pandora's box on rebates

Janusz Lewandowski, the EU Commissioner for financial programming and the budget, told the Danish newspaper Politiken in January that a Danish rebate would "open a Pandora's box" and create an avalanche of demands for rebates from member states.

"You're the second richest country in the EU so in my book you are not entitled to a rebate," Lewandowski said.

On the eve of the EU summit, Thorning-Schmidt had softened her veto threat.

"If, for example, the existing rebates are being reduced so that Denmark's financing of these rebates will also be reduced, then it will have the same effect as a rebate," the prime minister told the newspaper Berlingske Tidende.

Last weekend, the Danish newspapers Politiken and Berlingske Tidende revealed that Van Rompuy had already offered a rebate between €80.4 million and €107.2 million, but Thorning-Schmidt had rejected the offer.