Thursday, December 01, 2005

Blair backtracks (a bit) on EU budget rebate

Tony Blair, currently on a tour of new EU member states in an attempt to resolve the deadlock over the EU budget - for which many feel he has primary responsibility, both as the UK is the current president of the union, and as its budget rebate is one of the major sticking points - has indicated his willingness to either accept a cut in the rebate, or contribute more to EU funds.

These might seem essentially the same thing. Not so, however; the issue of the budget rebate, won by Margaret Thatcher, is something of a hot potato in British domestic policies; and Blair has repeatedly stated that he will not give it up without reform to the Common Agricultural Policy. He has not, of course, offered to give it up entirely, but it will be difficult to prevent opponents from portraying this as a u-turn.

The offer comes as part of a proposed deal which would also see aid to the 10 accession countries cut by something like 10%; small wonder, then, that Blair has had to make a significant concession. The cuts are not, perhaps, as draconian as first appears - the conditions attached to this funding are so strict that, in practice, significant amounts of the money is never spent (Poland, for example, has thus far been able to spend only 4.3% of its allocated funds for 2004-2006). Blair is proposing to loosen up the criteria for accessing the money at the same time as reducing the amount available; nonetheless, this does not seem to have impressed many of the new member states. Even a spokesman for Barroso, the Commission President, has said that "he has made it very clear that he does not expect the British presidency to take the role of the Sheriff of Nottingham, taking from the poor to give to the rich".

I find it difficult not to feel a little sorry for Blair on this one; that both the rebate and the CAP need serious rethinking seems to be generally accepted (almost everywhere but France); his argument, however, that they are "inextricably linked" seems to have considerably less adherents. The rebate seems an easier target at the moment than does the CAP; this, coupled with the fact that the UK currently holds the presidency and thus the responsibility for finding agreement on the budget, has forced his hand. It'll be interesting to see just how far he is prepared to go; and how what he has already conceded will go down domestically.

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