20/06/2005

Blair – EU budget ‘not right’ for Britain

Prime Minister Tony Blair has told MPs that the EU budget deal offered at last week’s European summit was “not right for Britain”.

Speaking in the House of Commons, following last week’s meeting of European leaders in Brussels, Mr Blair said: “It is said that the failure to reach a deal has deepened Europe’s crisis; that Europe’s credibility demanded a deal. No. Europe’s credibility demands the right deal. Not the usual cobbled together compromise in the early hours of the morning but a deal, which recognises the nature of the crisis.”

Last week’s summit collapsed due to the failure of France and Britain to agree on the UK’s £3 billion rebate. Mr Blair said that the subject of Britain’s rebate could not be discussed unless there was a “fundamental debate” on all budget spending, specifically the controversial Common Agricultural Policy (CAP) which provides hefty subsidies to French farmers. Mr Chirac rejected the proposals to discuss French farm subsidies and Mr Blair rejected a proposal from Luxembourg to freeze the amount of Britain’s rebate until 2013.

Commenting on the rebate row today, Mr Blair said: “It simply does not make sense, in this new world for Europe to spend over 40% of its budget on the CAP, representing 5% of the EU population, producing less than 2% of the EU’s output. We are spending seven times as much on agriculture as on R&D, science, technology, education and support for innovation combined. This isn’t a budget fit for purpose in the 21st century. Even at the end of the next financial period i.e. by the beginning of the year 2014, we would be spending 40% on the CAP. Europe just cannot wait ten years or more for change.”

However, Mr Blair also said that the rebate was “merely a correction mechanism” and added: “As the EU has expanded and Britain has become more wealthy than countries like France, it is right that it changes. Our position therefore was not to refuse any change to the rebate, to rule out a discussion, or to disown our responsibility to pay for the enlargement of Europe we support passionately.”

The Prime Minister also described Luxembourg’s proposal to freeze the UK’s rebate as “inadequate”, saying that it would have cost the UK 25 million euros, which would have been redistributed between Europe’s richer countries, not the poorer ones.

Mr Blair said that the debate would continue when Britain assumed the EU presidency from Luxembourg next month. He said: “It is those who believe in Europe most who should be the most ardent advocates of changing it. The European Budget shouldn’t be separate from that debate but part of it. It is that debate which we will look forward to, in our Presidency.”

Mr Blair is due to give a speech to the European Parliament, detailing Britain’s plans for its sixth month presidency of the EU, on Thursday.

(KMcA)

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