Anglo-French row over EU budget worsens

EUObserver ^

[Alex Marko]

BRUSSELS - EU foreign ministers abandoned a closed-door meeting on the EU budget on Sunday evening without agreement and with positions hardening on the British yearly rebate and what to do about the bloc's large farm subsidies.

Ministers went into the meeting having been witness to a growing Anglo-French spat as London and Paris traded insults over their respective red lines.

British foreign secretary Jack Straw set the tone of the meeting by branding demands by French president Jacques Chirac that the around 4.6 billion euro annual British rebate be given up as "deluded".

"The rebate is not the issue, and people are deluded if they think it is the issue", said Mr Straw following calls by Mr Chirac last week that London make a "gesture of solidarity".

"The rebate is a symptom of a fundamentally distorted budget system that continues to give the UK the lowest receipts per capita of any country because our agricultural sector is efficient and relatively small.

"It is the better-off states of the EU that perversely stand to gain most from agricultural subsidies", said the foreign secretary referring to the fact that some 40 percent of the bloc's budget goes to farm subsidies, and of those subsidies, France receives the lion's share.

France hit directly back at Mr Straw's comments.

"The near totality of member states favour putting back on the table the British cheque", Europe minister Catherine Colonna said. "The rebate defies community logic and undermines EU solidarity".

During the meeting, the UK had some support from Sweden which is also in favour of cutting back farm subsidies, said diplomats.

Germany reiterated its position that it would be prepared to compromise on its demand that spending be capped at 1 percent of gross national income (GNI) if others also moved.

The Netherlands on the other hand, still reeling from its referendum rejection of the constitution two weeks ago, indicated that it does not want to continue to pay the largest amount per capita into the EU - it also criticised the Luxembourg EU presidency's proposal that money would flow back to the Netherlands, Germany and Sweden, saying that it did not go far enough.

War of words The war of words between France and Britain is set to continue up to the summit as both leaders meet to discuss the issue on Tuesday (14 June). Mr Blair is also set to meet Luxembourg prime minister Jean-Claude Juncker to discuss the issue.

A diplomat said the "decks are being cleared" so that the EU budget can be discussed on Friday (17 June) morning among the EU 25.

Thursday evening will be devoted to discussing how to proceed with the constitution in the hope that this issue will be agreed meaning leaders only deal with the budget the following morning.

"If I were a betting man, I would say that there will be no agreement [on the budget] at the summit" said one diplomat but added that there is compelling factor in Luxembourg's favour: "it will not get any easier in the next six months".

The UK takes over the EU presidency in July making agreement on the budget even more unlikely.

For its part, the European Commission, which has taken a backseat role in the discussions, has repeatedly warned that no agreement this month will mean that regional aid and structural aid payments to member states will be delayed in 2007.

According to Polish newsagency PAP, Luxembourg has not ruled out holding another summit in June if no agreement is reached on Friday.

Meanwhile, a senior Luxembourg diplomat said on Friday that she expected the summit to go on longer than scheduled but joked that it has to be over by 19 June (Sunday) when the presidency must be in Canada for a bilateral summit with the EU.

[advance_copy]

The EU is on the rocks. I see that as a good sign.

[RJL]

Previously I read that without the rebate the UK would be paying 15 times as such as France, and even with the rebate the UK is paying more.

There is no way I'd volunteer to pay 15 times what the frogs pay.

[happyathome]

Odd how things have changed in a few years. 2 years ago France, Germany loudly proclaimed solidarity (and leadership of a significant portion of the world) in opposition to the US in its invasion of Iraq.

Now, foreign governments are grudgingly starting to see the light regarding bringing democracy to the Middle East. Meanwhile, Germany is in disarray and France is picking fights with everyone - repeat, everyone - over issues big and small.

[Malesherbes]

Chirac's domestic and foreign policies are on the rocks. What better time to change the subject by picking a fight with the Brits.

[Neville72]

Maybe it's time for another Waterloo for the Frenchies to be shown their place.

[river rat]

Fruck the Fench....
Let them eat.........&^*(&^((*&


Semper Fi