German eyes on British rebate

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The Independent Online
BRITAIN'S European Union budget rebate came under renewed pressure yesterday, with Germany insisting that the subject must be debated at the forthcoming summit in Berlin.

The Prime Minister, Tony Blair, will have additional difficulties in defending the continuation of Britain's rebate, after EU agricultural ministers yesterday agreed on a deal which failed to make expected budgetary savings. The deal on farm spending will cost around pounds 5bn more than the amount specified at last month's special summit near Bonn.

A paper from the German EU presidency identifies thepounds 2bn annual rebate as a central item of discussion at the meeting in two weeks' time. The paper argues that circumstances have changed since it was negotiated in 1984 by the then prime minister, Margaret Thatcher, at Fontainebleau.

The German document says the "key for financing the UK budget abatement", could be "adjusted", adding that new mechanisms should be put in place to take account of potential benefits to Britain of a decline in agriculture spending. It states that the definition of expenditure covered by the rebate should be "amended" to exempt the costs of the EU's enlargement to the east.

In the Government's strongest statement on the issue to date, Mr Blair's official spokesman said there was no question of the rebate being conceded: "The abatement is non-negotiable, as all our partners know. We have made it clear that the abatement is justified, whatever the effects of enlargement."