Posted on 12/17/2005 1:50:20 AM PST by ScaniaBoy
Tony Blair was preparing his biggest climbdown over Europe last night, offering to slash Britain's EU budget rebate by £1 billion a year without winning any commitment from France on early reform of farm subsidies.
Sources said he was ready to surrender a total of £7 billion from the rebate between 2007 and 2013 in response to demands from President Jacques Chirac and other leaders in the EU.
Mr Blair: 'It is for people to make up their own minds'
He also bowed to a Franco-German demand, backed by farming nations and new members from east and central Europe, to abandon calls for budget discipline and expand EU spending dramatically during the next period.
William Hague, the shadow foreign secretary, said: "Seldom in the course of European negotiations has so much been surrendered for so little. It is amazing how the Government has moved miles while the French have barely yielded a centimetre."
Mr Blair said: "There are 25, 27 countries trying to negotiate incredibly complex issues. . . so it is an immensely complicated budget.
"We are, however, in a position where shortly we will put down our final negotiating box and then it is for people to make up their own minds frankly whether they want to do a deal or not."
Britain caused outrage earlier in the month among countries which benefit most from EU subsidies by proposing that EU spending be held to £575 billion, or 1.03 per cent of total European output.
By early evening yesterday EU sources said that the Prime Minister was preparing to bow to a proposal to raise spending by £9 billion to £584 billion. They said that to help pay for that and meet Britain's "fair share" of the cost of enlargement, he was ready to forgo at least £7.1 billion from the rebate, a sharp rise on his offer of £5.5 billion at the start of the month. President Chirac raised the stakes further by telling a press conference that the rebate, which Margaret Thatcher secured 21 years ago, should be scrapped within the decade.
The money surrendered by Britain would benefit eight eastern European nations that joined the union last year. When Britain took over the EU presidency six months ago, Mr Blair tried to win over partners by putting the rebate on the table for the first time in return for "fundamental" reform of the Common Agricultural Policy. He also agreed to calls to hold EU spending to £556 billion, or one per cent of GDP.
The rebate was worth £3.5 billion last year but was poised to spiral upwards as overall EU spending soared with last year's enlargement from 15 to 25 nations.
Although Mr Blair chaired the Brussels summit of EU leaders, he was cornered by a twin assault from established EU farming nations and from his much-vaunted allies in eastern and central Europe.
Shortly before lunchtime, a French-led bloc of farming nations, including Spain, Austria and Italy, handed him an ultimatum that he make deep, permanent cuts to the rebate.
Behind that demand lay the public threat of a French veto if he pushed for reforms of the Common Agricultural Policy any time before the end of the 2007-2013 period.
At the same time, Mr Blair came under assault from states which joined the EU last year, led by Poland. They called on him to reverse a plan to slash EU spending by £14.5 billion, largely by restoring billions of pounds in aid for east and central European nations.
Britain's call for huge cuts was unveiled at the beginning of the month and caused immediate outrage in Poland and other ex-communist nations.
The Polish prime minister, Kazimierz Marcinkiewicz, said that he suggested a budget comprising 1.05 percent of the EU's gross national income, compared with the 1.03 per cent proposed by Mr Blair.
In June Mr Blair did not hesitate to veto an earlier budget plan, proposed by Luxembourg, that would have raised EU spending to £589.7 billion over the 2007-2013 period.
That plan, drafted in close collaboration with France and Germany, sought to slash the rebate, asking the Government to pay an extra £12.2 billion into the EU coffers.
On June 18 Mr Blair did not mince his words as he explained why he rejected the deal, saying that at present 40 per cent of EU spending would be on the Common Agricultural Policy.
"What we can't justify is a budget so skewed in the way that it is now," he said. Britain had failed to obtain "sufficiently clear commitments to reform" of the CAP.
A LOST CHANCE
A BILLION here, a billion there and pretty soon you are talking about real money.
Last night Tony Blair caved in to the French and handed over another billion a year to keep the shambolic EU in business.
The fiendishly complex gravy train defies rational explanation. But we know it is wasteful and corrupt.
Each Pound shrinks by 20p just by passing through the bureaucratic EU wringer. Vast sums are sprayed around the world in inefficient aid.
Much of the rest sticks to grubby fingers as its passes along the line.
Some actually ends up in new roads and bridges, but in the most expensive way imaginable.
Year after year, EU auditors refuse to sign off the accounts.
Tony Blair had a chance to put a bomb under this scandal last night.
He could have vetoed plans to spend even more and force a shake-up of the whole shambles.
Instead, to Gordon Brown’s fury, the PM signed up to an extra £7BILLION over seven years.
That’s money the Chancellor must find in higher taxes to pay for a spending splurge which is running out of steam.
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The policial question now is if Gordon Brown will mount a challenge against Mr Blair, and if so will he be able to pull it off. No amount of fluff will hide the fact that Blair caved in completely to the French and also to the Poles, who had allied themselves with the French.
Unfortunately, a Brown PM-ship will be relying more on the left wing of the Labour party, which may have effects on Britain's Iraq policy.
PING!
A high price to pay in lost friendships
When the cost of the EU budget row is totted up, the highest price for Britain may be the broken friendships with new member states.
Until a few weeks ago, Britain was the "champion of enlargement". Of the large, old EU states, only Britain threw open its employment markets to Polish plumbers and Latvian builders. The post-Communist leaders branded themselves as "Blairites", and trumpeted "Anglo-Saxon" economic reforms.
During the US-led invasion of Iraq, Britain was joined by Poland, the Czech Republic, Slovakia, Hungary and three Baltic nations in the "coalition of the willing".
Then came the budget row. The trouble started in June, when the then president of the EU, Luxembourg, tabled a draft budget for 2007 to 2013 that was crammed with cash for all, especially the new boys in eastern Europe.
But the deal asked Britain to forgo some £17 billion from its rebate to fund the largesse and Mr Blair refused.
Earlier this month, Britain - which took on the presidency for the second half of the year - unveiled an alternative plan which was both clever and brutal.
The plan either improved the lot of the EU's old, power-broker nations, or left their net positions untouched. Britain also backed away from an assault on farm subsidies - knowing that Paris would block any attempt at real reform instantly.
Instead, British officials took money from the new member states, slashing some £10 billion from the development funds allocated by Luxembourg to the new members and awarded itself the lion's share of the savings to improve on the June deal.
Britain had logical defences for the move. The new member states could not spend all the money they were being given so would not notice a 10 per cent cut.
The public reaction was uniformly furious.
On Thursday, Britain's punishment seemed to have arrived, when a joint letter from the Polish and French foreign ministers signalled the emergence of a new Franco-Polish axis against the budget plan.
Had that axis lasted more than 12 hours, Mr Blair's humiliation would have been complete. Happily for Britain, once yesterday dawned, France seemed to have forgotten its new friends in the east, as Mr Chirac concentrated on slashing London's rebate and defending French farmers.
He held bilateral meetings with the usual "big beasts" of old Europe, then issued a joint declaration with Spain, Germany, Italy and Luxembourg.
A Polish official said his nation had shed "romantic" illusions about allies like Mr Blair. "We are learning it's not about friendships, it's about coalitions of interests."
For two guys that can stand up to the terrorists and not blink, Blair and President Bush fold faster than Superman on Laundry day when it comes to the political opposition.
What really frightened me in the build up to the Iraq invasion was Blair's very uncharacteristical strong and unwavering stand on the issue. Suddenly he had lost all interest in focus groups or polls.
The only way I could interpret it was that he was convinced about a real and imminent danger.
"We are learning it's not about friendships, it's about coalitions of interests."
Quite right Mr Polish Official. Which is why the idea of a federal Europe is doomed to failure. No state (particularly France) will ever be in it for any reason than to feather their own nests.
I can't believe Blair's caved in on the rebate and allowed increased expenditure. Well, I can, but I'm disappointed he has.
It is always depressing to see anyone give in anything to France, especially when all one gets for the bother is a string of insults. And what are people getting in exchange for over one percent of their total economic output? Government projects from a quasi government that makes the United Nations look like a worthwhile and well oiled machine.
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