Blair ‘could compromise’ on EU budget

Prime Minister Tony Blair could compromise on Britain’s EU rebate in a bid to finalise a deal on the EU budget, it has been reported.

Mr Blair is widely expected to offer to give up as much as 15% of the £3 billion rebate, in an attempt to break the deadlock over the EU budget.

The Prime Minister is holding talks with the leaders of Hungary, Poland, Slovakia and the Czech Republic today, following talks with the leaders of Estonia, Latvia and Lithuania yesterday.

Mr Blair has been attempting to win support for proposals, which would require the new EU member states to give up 10% of their payments, before Britain’s EU presidency ends at the end of the month.

The Prime Minister has stressed that the delay in setting the budget for 2007-13 means that the new member states cannot access funds for regeneration projects. He has also said that the UK would pay its “fair share” of the costs of enlarging the EU.

However, Mr Blair has been the target for much criticism over the deadlock on the budget. The President of the European Commission, Jose Manuel Barroso, accused the Prime Minister of acting like a modern-day Robin Hood and robbing from the poor to give to the rich.

However, at Westminster Mr Blair has faced accusations of betrayal in giving up part of the rebate without a reform of agricultural subsidies.

An attempt to break the deadlock on the budget agreement failed during the summer, when Britain clashed with France over the Common Agricultural Policy (CAP). Britain refused to give up its rebate, unless there was a review of farm spending - something which French President Jacques Chirac refused to accept.

Conservative leader Michael Howard accused Mr Blair of “squandering” Britain’s current leadership of the EU and of preparing to “surrender” the rebate, which was won by Margaret Thatcher in 1984. He said: "We are not going to get fundamental reform of the EU budget in the last days that remain of the British presidency. We could have had it, but we squandered a tremendous opportunity. Now Tony Blair's deal will cost the British taxpayer £1 billion a year or more."

Liberal Democrat treasury spokesperson Vince Cable said that any deal must involve a reform of the common agricultural policy. He said: "Whilst it is right that new members of the EU are not disadvantaged by any potential budget, the Prime Minister must be careful not to give away any leverage Britain has without securing changes to the CAP.

"The Prime Minister's poor negotiating skills have led to a situation where he has alienated our allies and has been forced into a corner. Complaining about the CAP without explaining how it should be reformed has significantly weakened the UK's position.

"The government will have only itself to blame if it misses the opportunity presented by Britain's EU presidency and fails to put together a budget."

(KMcA/SP)