Brussels, 14/07/2004 (Agence Europe) - On Wednesday the Commission adopted the proposal, Budget Commissioner Michaele Schreyer which introduces a generalised correction mechanism for the financial perspectives 2007-13. The British rebate will be phased out between 2008-11. The initial proposal was slightly adapted in favour of the United Kingdom but was rejected, all the same, by Neil Kinnock and Chris Patten. London immediately reacted saying that it intended to fight against the project.
Just as in the initial project, this mechanism will facilitate more coherent net contributions of countries that correspond to their wealth. According to this system, Member States will have a right to reductions when their net contribution goes beyond 0.35% of their GDP. Above this level, Member States will benefit from a 66% reduction in their contribution. The total amount of reductions will have a ceiling of EUR 7.5 bn. With the introduction of a transition period, the United Kingdom is not longer at risk of becoming the first net contributor to the budget. According to data in the proposal on budgetary surpluses in Member States (average in 2008-13), net balances rose to -0.46% in the United Kingdom, the same for Sweden. The Netherlands will remain the biggest net contributor (net negative balance of 0.50%), followed by Germany -0.49%, Italy -0.36, France -0.34.
Ms Schreyer said that Fontainebleau, 194 was twenty years ago (in a reference to the European Council at which Margaret Thatcher got her cheque). The Commission reached the conclusion that the "exclusivity" of the British rebate was indefensible as a large number of Member States were now net contributors and in economic situations comparable to that of the United Kingdom. The Commissioner also added that the United Kingdom had experienced a positive economic development and now belonged to the groups of richest countries. She also explained that if they had to keep the current mechanism the gap between net contributor and others would continue to increase and the cost that poorer countries would have to bear would become much heavier. The Commissioner averred that this proposal needed a bridge between those who wanted no changes and those who believed that the rebate had to go.
In replying to the press, Schreyer declared that if the current system were to last, the bill to be paid by new Member States would increase; the United Kingdom would be the biggest beneficiary of this system because the transition period meant that the country would have the largest rebate.
Commissioner Jacques Barrot, quoted by AFP said that the Commission had taken a clear, transparent and explicable position which deserved to be put on the table. He said that it was impossible to remain with the status quo.
London opposes possible ending of rebate
Secretary State for European Affairs, Denis MacShane, reacted immediately declaring in French that the "Great Britain believes that the question of the rebate is not on the table". He added that it was useless to go back on "decisions that had already been taken", he added in an interview to AFP.. He added that "Great Britain considers that it is not on the table in the same way that the Common Agricultural Policy (CAP) is not on the table for some of our partners", he added. The spokesperson for the British treasury said that the British cheque was totally justified and they were going to argue against any change. On 8 July the spokesperson for Tony Blair had already affirmed that London would fight hard to keep its rebate.