Brussels, 15/12/2005 (Agence Europe) - The European Council started its work early on Thursday evening, with the traditional meeting of the Heads of State and Government with the President of the European Parliament, Josep Borrell (see below), followed by an initial working session and a dinner given over exclusively to the financial perspectives 2007-2013. Upon his arrival in Brussels, Tony Blair told the press that he was anticipating "extremely tough, extremely difficult" negotiations, and that the outcome was "highly uncertain".
A few hours earlier, Mr Blair had met President Borrell and the Presidents of the political groups of the European Parliament in Strasbourg, but without giving any signs of possible changes to the British position. "Mr Blair is a highly effective man. He repeats his position, in which there is nothing new. But he does it very politely", said the leader of the Socialist group, Martin Schulz. The message of the Conference of the President of the EP was quite simple: "we have told him that the European Parliament will never accept a bad agreement", said Mr Schulz.
The Liberal leaders are somewhat optimistic about chances of agreement - " Budget must
show solidarity with the new Members and be turned towards future"
At their traditional pre-European Council summit in Brussels, the leaders of the European Liberal Democrats Party (ELDR) and the Liberal heads of government of the EU (Guy Verhofstadt of Belgium, Anders Fogh Rasmussen of Denmark, the Finn Matti Vanhanen and the Estonian Andrus Ansip) stressed the need to reach an agreement on the financial perspectives, " expressing solidarity between the Member States and their Regions, and which is turned towards the future", the president of the ELDR, Belgian MEP Annemie Neyts-Uyttebroeck, told the press. In the absence of Guy Verhofstadt (who is known to be less than entirely satisfied with the latest British proposal), the the other Prime Ministers said that they were relatively confident of an agreement during the summit. "We have a genuine opportunity to reach an agreement", said Mr Rasmussen, who sees this agreement as "crucial", as it will allow the EU to concentrate on its future and its long-term perspectives. He feels that the British proposal of 14 December "is a basis for a final agreement", but that the Presidency still has to "move" in order to improve several aspects of it: -the British rebate is still "much too high" and the long-term objective should be to "phase out the whole rebate". Even if this objective cannot be achieved at this European Council, the summit should at least lay the foundation stones for progress to be made in this direction, said Mr Rasmussen, who stressed that the rebate "is not justified"; - "the overall profile of the proposal is wrong", because it keeps in place the idea of cutting back the structural funds for the poor countries in order to finance the British rebate, "which is not fair", and bears witness to a "lack of solidarity"; - the budget does not include sufficient investment in future-facing sectors (research and development, education, competitiveness, etc). "We are, therefore, proposing to double expenditure for research and development", said Mr Rasmussen. The Prime Minister is strongly in favour of the idea of a revision clause on the structure of the budget during the period 2007-2013, but he would like the agreement of October 2002 (reached under the Danish Presidency...) on the limitation of market expenditure and direct aid under the CAP until 2014 to be "strictly adhered to". Mr Vanhanen also stated that "we are quite close to an agreement", and that "now, it is important for the UK Presidency to listen carefully to what all these delegations have to say (at the first table round, on Thursday evening) before coming back with a third proposal". For Mr Ansip, the British proposal of 14 December is "already a step in the right direction", but it "does not go far enough", because it keeps the British rebate at a higher level, and earmarks insufficient for "investment in the future", notably research and development.
EPP Heads of Government divided over likelihood of agreement
On the sidelines of the meeting of the leaders of the European People's Party (DPP), which was held in Meise on Thursday, the Luxembourg Prime Minister Jean-Claude Juncker appealed to the British to make an additional effort on their rebate. "The United Kingdom, like the others, must take on its fair share of the costs of enlargement", he said, calling upon London to reduce its rebate further and to "make greater sums of money available to the new Member States". Mr Juncker was reasonably optimistic about the chances of an agreement: "I get the impression that all delegations, including that of the UK Presidency, want an agreement", he said. Germany is hoping for a swift agreement on the financial perspectives, so that it can make progress in the programming of structural aid for the new Länder, amongst other things, but "it does not want an agreement at any price", said Chancellor Angela Merkel. Upon his arrival in Meise, the Slovakian Prime Minister, Mikulas Dzurinda, said that the British proposals constituted a "good basis for the final negotiations", and that its latest proposal was "better than the previous one". The Austrian Chancellor Wolfgang Schüssel said that his country was prepared to pay "a little bit more" for a budget slightly higher than that proposed by the Presidency. "We only hope that the British are willing to do the same. This is an investment in the future of Europe", he added. Arriving in Brussels, the Greek Prime Minister Costas Karamanlis said: "Finding a common ground between 25 Member States that each have their own views and set their own priorities is, by definition, a particularly difficult affair".
Franco-Polish appeal for reduction of British rebate and more solidarity with new members - Italy:
"Better no agreement than a bad agreement"
On Thursday, a few hours before the start of the European Council, France and Poland joined forces to reject the latest British proposal ("which cannot become the basis for an agreement"), and to call for a further reduction to the British rebate. In a joint letter published in the Financial Times of 15 December, the French and Polish foreign ministers, Philippe Douste-Blazy and Stefan Meller, refute the idea that "Poorer Member States are to make further, substantial sacrifices, whilst one Member State, the United Kingdom, would see its position considerably improved". Such approach cannot be a reference point for a European Union based on solidarity and justice, they say. They believe that two essential conditions must be respected: - a fair sharing-out of the costs of enlargement, which means that the British rebate should be adjusted to take account of the wave of enlargement of May 2004, but also of future waves of enlargement. This means that the United Kingdom would have to agree that its rebate would not apply to expenditure in the new Member States, "with the possible exception of market expenditure under the common agricultural policy"; - privileged treatment for the poorest regions. Instead of this, regional aid earmarked for Poland under the current British proposal is not enough and must be "increased considerably", as indeed it must be for all of the new Member States, the two ministers stress. France and Poland also reaffirm that they are prepared to accept a revision clause in 2009 to review both revenue and expenditure under the EU budget, but that these changes would not enter into force until the period 2014-2020.
The requirements put forward by France on the "revision clause" were detailed in a note, in which President Jacques Chirac agreed with German Chancellor Angela Merkel on 8 December, and which has been forwarded to the UK Presidency. This note confirms that Paris is not refusing to review the structure of the budget of the EU, including the common agricultural policy, provided that this revision does not take place before 2009, it covers all expenditure and all revenue (and, therefore, not just the CAP), and has no concrete impact on the budget prior to 2014. By then, France insists that all commitments taken in 2003 regarding the common agricultural policy must be fully adhered to.
In Germany, Foreign Minister Frank-Walter Steinmeier described the British proposal to the Bundestag on Thursday thus: " it is a good working basis. We believe and hope that an agreement is still possible on the basis of the new proposal". Italy, for its part, has rejected the latest British proposals. "The latest proposal (...) seriously neglects Italy's interests. These proposals are unacceptable, and it is quite right for our government to reject them, because they penalise our agriculture", said agriculture Minister Gianni Alemanno. "Better no agreement than a bad agreement"" said Minister for European affairs Giorgio La Malfa. Latvia cannot accept the latest British proposal, said Prime Minister Aigars Kalvitis. "The increase in funds is totally inadequate ", he said.
In Budapest, the Hungarian Prime Minister Ferenc Gyurcsany disagreed, saying that the latest British proposal went in the right direction (it provides to grant Hungary an additional hundred million EUR, compared to the text of 5 December: see EUROPE 9089), but that it was still "unacceptable in its current form".