Merkel holds fire in EU budget war

New German Chancellor Angela Merkel has refused to take sides in EU budget wars between Britain and France.

Merkel spent her first two days in office in private talks with French President Jacques Chirac in Paris and UK Prime Minister Tony Blair in London.

Both leaders are at odds over future EU expenditure for 2007 to 2013 and bitter battles lie ahead at a December 15 Brussels summit – to be chaired by Blair.

Paris has called for the UK’s €4.6 billion annual EU rebate to be scraped and London has demanded that Europe’s generous farm subsidies to France be cut.

Merkel has drawn back from her previous public stance on either issue – a departure from her pro-UK position expressed last summer when she was opposition leader.

The German leader told journalists on Thursday that “the situation of each country has to be taken into account” and stepped back from making any predictions of a deal under the UK’s EU presidency. 

“If anybody forgets one country's interests then you won't get any success,” she said in London.

“I don't really want to look into a crystal ball but we have three weeks left and I think everybody will make his or her contribution and then we will see.”

“It is a complicated question to make a budgetary prediction and provision and my visit yesterday [to Paris] has shown too that no country should ask more than another.”

Back in June, Merkel gave a clear view of her sympathies just days before a Brussels summit chaired by the Luxembourg EU presidency ended in discord and disarray amid UK and French in-fighting over farm aid and the rebate.
 
The then-opposition leader lent her support to Britain’s annual cash back arrangement, negotiated in 1984 by Margaret Thatcher.

Paris secured agriculture spending in a Franco-German 2002 deal, ring-fencing EU farming subsidies that benefit France until 2013 – taking agriculture out of the equation for the current budget round.

Merkel’s view then, at least, was that if France can lock off agriculture spending then the UK’s rebate – linked to Britain’s low take up of farm cash – should remain too.

“The British rebate is the result of the fact that Britain as a net contributor gets significantly less than other countries in agricultural subsidies, especially France but also Germany,” she said on June 13 2005.

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