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Just at the moment when Europe's leaders are demanding severe austerity cuts from Greece comes a moment of huge insensitivity.

Last night over dinner the President of the Council, Herman Van Rompuy, pulled from his case a brochure illustrating the refurbishment of a building for the European Council. The price tag: a cool 240m euros. The project is expected to cost UK taxpayers £25m.

David Cameron reacted with irritation.

"When you see a document being circulated with a great glossy brochure about some great new building for the European Council to sit in, it is immensely frustrating," he said.

"And you do wonder whether these institutions actually get what every country, what every member of the public, is having to go through as we cut budgets and try to make our finances add up."

During the dinner other leaders expressed astonishment that, at this time, the EU should unveil such a brochure.

The new building - to be called Europa - was commissioned in 2004. It will host EU summits. The justification for the extra space is to accommodate the staff of President Van Rompuy and the staff of the new diplomatic service under Catherine Ashton. Both posts were set up under the Lisbon Treaty.

"It seems to me," said David Cameron, that the current building is doing "a perfectly good job of housing the European Council. The microphones work, there is plenty of room and the food isn't bad either. What is the problem?"

The problem is that much of the money for the Europa has already been spent.

What the whole episode does do is to challenge the position of many MEPs in the European Parliament. They have called for a 5.8% increase in the EU's budget.

The President of the Parliament, Jerzy Buzek, said recently: "Nearly 95 % of the EU budget is spent on various kinds of investment, only 5% accounts for administrative costs. Reducing the EU budget would cripple our ability to invest in areas such as research and development or efforts to tackle climate change or harm our energy security."

This building is likely to be cited as an example of where Brussels needs to adjust to the current realities in Europe