France and Poland unite against UK at summit

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The UK has added 2.5 billion euros in its revised proposal for the EU’s long term budget, which is to be handed out in small amounts to the new member states. But France and Poland have voiced loud opposition.   

The UK’s 14 December proposal adds a mere 2.5 billions euros. This is spread out in small portions mainly to the 10 new member states, who stand to lose around 12 billion euros of the 160 billion euros in structural funds. This would amount to cutting roughly 10% off the money that the new member states were set to receive under the Commission’s proposal. 

Greece and Portugal have also been given small amounts of extra funds.

The controversial UK budget rebate is not mentioned in the 14 December proposal, but it is widely expected that the UK will have to make a further concession on the rebate in order for the summit to reach a deal. So far the UK has offered to give up 8 billlion euros of the budget rebate. 

The UK wants the summit to back a 2008 review clause on the EU budget and CAP spending. Such a review would however only take effect in the following budget period starting from 2013.  

UK Foreign Secretary Jack Straw said on 14 December that he would prefer no deal to a bad deal. Straw added that "the area of negotiation is narrow".

Commission President Jose Manuel Barroso, who has already voiced his strong opposition to what he calls a 'mini-Europe' budget,  said that the new proposal was "wholly inadequate".

Polish Prime Minister Kazimierz Marcinkiewicz said that the proposal was “in no way satisfactory”. Poland, which stands to lose the most, around 6 billion euros, has teamed up with France, and is threatening to veto the proposal. Philippe Douste-Blazy and Stefan Meller, French and Polish foreign ministers respectively, argue that the poorer member states will be making “substantial sacrifices" while only one country, the UK, would “see its position considerably improved”. They warn that a summit deal will only be possible if the UK pays its “fair share” of the cost of EU enlargement. In other words, to give up more of the rebate.

German Finance Minister Peer Steinbrück said there was a 60% chance of a deal at the summit: "The more the British give up of the rebate, better the chances of a deal," he said.  

The Dutch government which wants to reduce its net contribution by 1 billion euros, said the proposal was a step in the right direction, but not enough. Lithuania's PM Algirdas Brazauskas  was not satisfied, and said that he was authorised to veto it at the summit.  

Spain said it was satisfied with the offer. Madrid has been promised help in tackling illegal immigration in North Africa and more regional funds. Opposition to the British plan also appeared to be softening in Slovakia, which was given an extra 375 million euros. 

MEP Graham Watson, Liberal Democrat Group leader, said  that the British proposals are "more an attempt to meet the lowest common denominator for a deal. They may end up finding a minimal consensus but they are a long way from providing the sort of budget Europe needs to raise its game and respond to new challenges. The European Parliament will not be satisfied with this latest offer".

The two-day EU summit, which starts on 15 December, has before it the difficult task of agreeing on a new long-term EU budget covering the period 2007-2013. 

The June 2005 summit under the Luxembourg Presidency failed to reach agreement. Since then the task has not been made easier by that fact that the current UK Presidency has had a hard time acting as the traditional honest broker because the 21-year-old British budget rebate is under attack from all sides.
The proposal put on the table by the UK Presidency on 14 December offers 849 billion euros. This is 2.5 billion euros more than the most recent UK proposal of 5 December. 

However, compared to the Luxembourg compromise it still is a decrease of 22 billion euros, and compared to the original 2004 proposal from the Commission it is a decrease of 273 billion euros. This represented a spending level of 1.24 % of the EU's GNI while the UK proposal is at 1.03 % of GNI. 

The 15-16 December summit will seek to broker a deal. If is does not succeed  the Austrian Presidency will have to try and pick up the pieces in January 2006.

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