By Bruno Waterfield - 12th June 2005
Europe’s budget battles have centred on calls to scrap the UK’s annual EU €4.7 billion rebate – a debate dismissed as “deluded” by London.
Europe’s foreign ministers are meeting in Luxembourg in a bid to lay the basis for agreement on EU spending from 2007 to 2013 at a Brussels summit this Thursday.
Paris, reeling from a May 29 referendum rejection of the EU constitution, has moved to shift the political spotlight to Britain.
French President Jacques Chirac is concerned about being branded as “black sheep” of Europe after defeat in the EU vote.
He asked London last week to give up the rebate as a “gesture of solidarity” in the EU’s constitutional crisis.
The UK has responded by going on the offensive over France's refusal to open negotiations on EU farming subsidies.
“The rebate is not the issue and people are deluded if they think it is,” the UK foreign minister said yesterday.
Jack Straw has turned Britain’s fire on Europe’s agriculture budget – 40 per cent of the 2007 to 2013 total – which benefits countries such as France.
“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,” he said.
France receives some 25 per cent of EU farm subsidies, worth €10.5bn per year, the UK nets under €4bn.
The row has overshadowed efforts to secure an EU budget deal on June 16, failure could see agreement delayed until after July’s UK EU presidency into 2006.
The European Commission has warned that postponement could hit the EU’s regional funds – cash aimed at Europe’s areas.
The Netherlands – hit by the Dutch referendum rejection two weeks ago – is seeking to slash EU contributions.
The Hague, along with Austria, Britain, France, Germany and Sweden, has pushed to cut EU expenditure to one per cent of Europe’s Gross National Income (GNI).
But last Friday, Berlin and Paris signalled willingness to back compromise proposals at 1.06 per cent – a move that will still see cuts to an original 1.14 per cent set by Brussels.
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