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Budget stalled by britain over french farm subsidies

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EU ministers to vent anger at UK over budget
Sun Nov 20, 2005 10:11 AM GMT

By Paul Taylor

BRUSSELS (Reuters) - European Union foreign ministers will vent mounting anger on Monday at the British EU presidency's go-slow tactics on the bloc's long-term budget, three weeks before a crucial summit on future financing.

Foreign Secretary Jack Straw has promised comprehensive proposals on the multibillion-dollar 2007-2013 budget just before a special ministerial meeting on December 7, but Britain's 24 partners are frustrated at being kept waiting.

"We are wasting time talking about secondary issues without tackling the real problem," one EU ambassador complained.

Another senior diplomat said ministers might as well exchange statements by letter and save the plane fare to Brussels since there was to be no negotiation.

Talks broke down in acrimony last June when Britain blocked a compromise by refusing to accept any curb on its annual rebate from EU coffers unless it won a promise of future cuts in generous farm subsidies that benefit France most.

Any chance of agreement at the December 15-16 summit hinges on Prime Minister Tony Blair's willingness to give up part of the rebate, worth 5.1 billion euros (3.5 billion pounds) last year, but some diplomats question whether he is domestically strong enough to do so.

France has shown no willingness to give an inch on farm payments, standing by a 2002 agreement which pegged agricultural spending at current levels until 2013.


In a tough speech to the European Parliament last week, Straw said it would be very hard to get a deal unless there were significant changes in the 871 billion euro package proposed by Luxembourg, which others see as the basis for a solution.

He also sought to play down the urgency, saying last time around, agreement had only been reached at the March summit before the start of the new budget period.

Diplomats said he would hammer home the same message to ministers, making clear that just because it held the revolving presidency did not mean London would drop its national interest.

European Commission President Jose Manuel Barroso warned last week that another failure to agree on the budget would plunge the EU into "a real crisis".

The nightmare scenario gaining ground in Brussels is that there could be no long-term budget at all, sending the EU back to the pre-1992 system of annual budgets agonisingly negotiated in last-minute battles with the European Parliament.

Without an agreement, the existing budget would be rolled over, adjusted for inflation. The British would keep their rebate, the French their farm subsidies.

The first victims would be the 10 new, mainly east European member states that joined the 25-nation bloc last year, since it would push new spending priorities to the bottom of the pile and make long-term financial programming impossible.

The newcomers are urgently awaiting promised EU investments in their transport and environment infrastructure.

Blair is likely to hear a chorus of anguish when he meets central European leaders on December 2.

But aides say Britain would not be worried at the prospect of isolation in the EU if it failed to get a deal in December, and Blair would be more popular at home than if he sacrificed part of the totemic rebate for the sake of Europe.

(Additional reporting by Yves Clarisse and Carsten Lietz)

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