Straw to outline EU budget proposals
Monday, 5 December 2005 12:00 AM
Foreign secretary Jack Straw is today expected to put forward its proposals for European Union budget reform ahead of a crunch meeting of member states in a fortnight's time.
Tony Blair met with eastern European leaders last week to try to secure their support for a deal on the 2007-13 EU budget, where he indicated that Britain's controversial rebate could be reduced in an effort to reach a deal.
Budget talks have been in deadlock since the summer, but the government is keen to secure a deal at the European summit meeting later this month, and before the end of the UK presidency of the EU on December 31st.
Today's deal is expected to call for a cut in the overall EU budget, with a cut in funding to the new member states of up to ten per cent and a corresponding cut - believed to be between 12 and 15 per cent - in Britain's £3.5 billion rebate.
This has prompted concern from all sides. The accession countries are unhappy at plans to cut their funding, although Mr Blair has insisted that it is vital that a budget deal be reached, as otherwise the current budget would be rolled over, and funds to the new states delayed.
Meanwhile at home, the prime minister has been accused of surrendering the rebate secured by Margaret Thatcher in 1984, without corresponding reform of agricultural subsidies.
Mr Blair has always insisted that there would be no rebate cut without reform of the common agricultural policy (Cap), but last week he admitted this was looking increasingly unlikely.
Speaking after a meeting with the leaders of Estonia, Lithuania and Latvia on Thursday, he said the Cap and the British rebate were still "inextricably linked" but admitted that "at this stage it looks very hard to achieve" reform of both.
A compromise deal would therefore have to include provisions that Britain "pay[s] our fair share of the costs of enlargement", the budget be reduced, and a mid-term review be set up to allow for changes at a later stage.
In addition, he said: "We need to be in a position where there is rough parity on a national income basis between Britain and like-sized countries at the end of any budget deal."
However, yesterday the Conservatives accused the government of wasting the EU presidency and going back on its promises.
"Tony Blair's EU presidency has been historically inept and a wasted opportunity," said shadow foreign secretary Liam Fox.
"He has now claimed that we need substantial reform of Cap but it was his government that negotiated a ten-year agreement only two years ago. Then, only months ago he said there was no chance of renegotiating the rebate before agricultural reform was carried out.
"Sadly this UK presidency has lacked all consistency and ambition. Labour's whole European policy is an incoherent shambles. If a deal is not reached on the budget it will be a pitiful moment for the British presidency."
Newsletter sign up