Everything according to forecasts. Events relating to the future details of the funding of the Community budget, including the fate of the "British rebate" unfolded as anticipated (see this column of 14 July), in that:
1. The Commission approved its document by disregarding the negative reactions, notably from London. I think it's a very positive thing that the Prodi Commission didn't avoid adding to the previous documents on the financial perspectives, adding this document on the "own resources" system, but clearly bore in mind the fact that the responsibility for the negotiations will then go to the Barroso Commission. Convinced of the need for reform, the Commission has done its duty.
2. A few parts of the document were tweaked, removing the prospect of the United Kingdom's becoming the largest net contributor to Community expenditure in 2008. If this had remained the case, going from the current situation (unfair and unbalanced) to the new situation would be too sudden a change. Thanks to the newly added transition period, the United Kingdom would be the third-largest net contributor in 2008 (in percentage of GDP), after the Netherlands and Germany and on the same footing as Sweden (see our bulletin of 15 July, page 9). These four countries would then get a refund (with a ceiling of an overall annual envelope of 7.5 billion EUR), which has been provided for all Member States whose net contribution exceeds 0.35% of their GDP. This refund would be paid for mainly by France, Italy, Spain, Belgium and (to a lesser extent) Poland.
3. London's reactions were extremely voluble. The British government has asserted that the current regime is not negotiable, which is all part of negotiation tactics. There have been a few negative reactions from other capitals too, notably Paris (but for different reasons, unsurprisingly).
A difficult position to defend. London's refusal even to discuss the size of its rebate seems unreasonable, as things have moved on since 1984 in three ways: significant reduction in agricultural expenditure as a percentage of the whole; radical improvement in British economic situation (GDP per head of population); eight countries from central and eastern Europe joining the EU, who need the benefits of European soldiery and economic cohesion. It seems unfortunate that the two British Commissioners are opposed to reform; were they acting out of general European interests, or those of their country of origin?
The British Secretary of State for European Affairs, Denis MacShane, said that the current regime is not on the negotiating table, in the same way as the common agricultural policy (CAP) is not negotiable for other Member States. This comparison doesn't hold water, as the CAP is subject to continual (and radical) revision: with the proposal on sugar, nothing now remains of the original CAP. In the same way, the system of refunds to the Member States whose net contribution is excessive cannot remain the prerogative of one solitary Member State. It was fair in 1984 to grant the United Kingdom its rebate, and it is now fair to extend the system to all Member States who find themselves in a similar situation. London's gut reaction is far less well thought out and balanced than the stances of British circles in Brussels, such as that of vice-ambassador Matthew Rous, who, by taking as his basis concrete figures, seems to accept the start of negotiations which are, in any case, inevitable.
Other Member States accept the changes resulting from the new situation. Bertie Ahern, the Irish Prime Minister, said earlier that his country's changing status to a "net contributor" is good news, because it means that Ireland's economic situation has improved considerably, thanks partly to Europe's support, and it is only fair that Ireland should now help to support other Member States. In Madrid, it has now been agreed that Spain can become a net contributor by 2013. I think that the British position will have to change. Just as it was right to pay the United Kingdom part of its contribution back in 1984, because it was unfair for it to be the largest "net contributor" whilst it was so far from being the most prosperous country, it is now justified to revise the mechanism that reduces it net contribution to 0.25% of GDP, when some of the other States are contributing twice that. It would also be hard for the British government to justify its position to the new Member States: it was a fervent proponent of their accession, so how can it now refuse to support the EU to benefit them, and cause this support to be reduced by the ever increasing rebate it claims?
(F.R.)