Richard North, 02/12/2005  

If the EU has succeeded in anything, it is in its ability to evoke profoundly mixed emotions – variously suspense, irritation, utter contempt and complete boredom. In the long-running saga of the EU budget, however, it has managed to evoke all of these at the same time – or perhaps this down to our great leader, Tony Blair.

First, there is the suspense: will he won't he give up the rebate? Then there is the irritation - why doesn't he get on with it instead of messing about, pretending that he is going to keep it intact. The utter contempt comes easily, as this man postures and prances, gobbling up the air miles, when we all know he is going to give in when the going get tough. And as for the boredom, well, we seem to have been discussion the budget forever – this is groundhog day to the nth power.

Anyhow, the Beeb is telling us that the UK (i.e., Blair) is prepared to reduce EU rebate – not give it up, mind, but reduce it, and he has waived his “red line” demand that any such reduction could only come on the back of fundamental reform of farm subsidies. In other words, it looks as if The Telegraph, earlier this week, might have been partly right.

But the exact deal seems to be a new scheme. The budget cut is kept in place but the UK will undertake not to claw back its rebate from the "poorer countries" in central and eastern Europe. This reflects the arcane way the rebate is calculated, in arrears, so that member states receive their gross handouts from Brussels and then have to pay some back later to fund the rebate. Hence, it appears to them as if they are giving money to the UK.

No figures have been released yet and, for that, we have to wait until Monday – more suspense.

Needless to say, the Conservatives are having a field day, with Tory Europe spokesman Graham Brady crowing that: "Before the general election there was an absolutely solid pledge the rebate would be maintained, then there was an offer it would be given away but only in return for solid fundamental reform of CAP, and now finally we see part of the rebate with nothing concrete in return at all."

Straw's response is a fascinating exercise in double-speak, denying that the prime minister was negotiating a "significant reduction" in Britain's rebate while saying that: "We have always made clear that we are not going to negotiate our rebate away but we have always acknowledged our responsibility towards the accession states who are that much poorer."

According to Reuters, leaders of seven of the eight ex-Communist bloc accession countries have signed a letter to Blair which states: "We will not be prepared to accept reductions in allocations for the new member states in cohesion policy and rural development." The exception is Slovakia, to which the UK has reportedly promised extra funds for decommissioning nuclear power stations.

Interestingly, if that is the right word - EU Budget Commissioner, the Latvian Dalia Grybauskaite, it not happy, telling Le Figaro: "If the scenarios circulating at the moment become reality, it will be a politically short-sighted budget creating a two-speed system which will divide Europe even more." Polish prime minister, Kazimierz Marcinkiewicz, says the EU must uphold the fundamental principle of solidarity – which, roughly translated, means "givvus the cash".

So will he, won't he? Blair, that is. The suspense is killing me. I can't stand it.


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