Blair defends EU budget deal

A bigger EU budget will only be possible after reform of Europe’s financing, UK leader Tony Blair has told MEPs.

Blair has defended an agreement on Europe’s expenditure for 2007 to 2013 brokered during grueling negotiations last weekend by the British EU presidency.

EU spending levels agreed after 17 hours of tense talks on December 17 are well below levels set by European Parliament proposals.

The shortfall between the parliament’s arithmetic and a financing package agreed by EU leaders is over €110 billion.

Blair told MEPs that more “ambitious” levels of spending are not possible until the EU reforms financing structures, especially spending on farm aid.

“I would agree that there should be a bigger budget, if it was a reformed budget,” he said.

“I think you would find there is a tremendous willingness right across the member states of the EU to contemplate a more ambitious budget in the context of a reformed budget.”

The British prime minister insisted that a commitment to an EU budget review in 2008 would later be regarded as a significant aspect of the 2007 -  2013 agreement.

Blair has come under domestic criticism for trading €10.5bn of the UK’s annual rebate against an open ended EU promise to rethink the Common Agriculture Policy.

He, and the European Commission, see the review rendezvous as a chance to shift EU spending away from direct farm subsidies to economic spending.

Blair is prepared to consider how much is spent and throw open negotiations on CAP and the system by which national governments pay into Brussels coffers.

"I think the budget agreement we reached, with a commission-led review in 2008, gives the opportunity to debate from top to bottom the EU budget... and allows us to look right from the very beginning at what a sensible, modern budget is."

"I think in time this will come to be seen as of critical importance - we really do need a seriously reformed budget for the future," he said.

“One of the things we have all learned form the budget process is that we really do need a seriously reformed budget.”

Blair highlighted transfers under the new financing package to Europe’s newest and poorest member states – up from around €20bn to over €170bn.

The UK leader trumpeted the agreement as an opportunity for the EU’s new countries to get cracking with Brussels funds aimed at economic development.

“There is no point in championing enlargement and then not being able to will the means to make enlargement a success,” he said.

The British EU presidency is talking up a deal that boosts competitiveness spending by 7.5 per cent and research funding over 70 per cent.

Blair argues that agreement to shift 20 per cent of direct farm subsidies to rural development budgets and to set a new globalisation fund is the best deal possible.

“We believe the budget settlement we achieved is the best we can achieve in the present circumstances,” he said.

“It was a budget that, as ever with these budgets, there will be people who will say it should be lower, there will be people who say it should be higher.”

“We thought as heads of state that it represented a fair settlement at the present time.”

MEPs are unhappy with the overall level of spending set by EU leaders but are unlikely to use parliament’s veto to block a deal.

Speaking for the parliament’s Socialists Austrian MEP Hannes Swoboda expressed disappointment but hinted that the EU assembly would not put up a fight.

“This budget gives us too little to live on but we are not prepared to die for it,” he said.

In June, the parliament proposed a budget of €975 bn, or 1.018 per cent of Europe’s Gross National Income, well over the €862.4bn or 1.045 per cent of GNI agreed last weekend.

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