Blair and Chirac deadlocked over EU budget

A decision on the European Union budget is looking increasingly unlikely as Prime Minister Tony Blair and French President Jacques Chirac continue to hold firm on their stances on Britain’s rebate at the European Summit in Brussels.

Mr Blair has refused to discuss Britain’s £3 billion rebate unless there is a reform of the controversial Common Agricultural Policy (CAP), which provides £7 billion in farm subsidies to France. However, Mr Chirac said today that any attempts to reduce French farm subsidies was “unacceptable” and that the British rebate should not be linked to a reform of farm expenditure.

Both Britain and France have rejected a proposal by Luxembourg to freeze the rebate until 2013.

Swedish Prime Minister Goran Persson has suggested postponing the decision on the budget, which will set EU spending from 2007 – 2013, rather than making a “bad compromise”. He said: “It is better to take a year more and continue to negotiate.”

At the summit yesterday, it was agreed to postpone the 2006 deadline for ratification of the European Constitution, following the rejection of the proposed treaty in referendums in France and the Netherlands.

A number of other countries, including Denmark, Ireland, the Czech Republic and Portugal have also postponed their referendums. UK Foreign Secretary Jack Straw announced that Britain was putting plans for a referendum on hold earlier this month, following the result of the Dutch referendum.

Ten countries – including Germany, Italy and Spain – have ratified the treaty so far. The constitution needs to be ratified by all 25 members of the EU in order to be introduced.

(KMcA/SP)