Germany presses for cut in EU bill

THE ROW over Europe's multi-billion pound budget escalated yesterday, as blunt demands for a cut in German contributions and a British refusal to negotiate on its budget rebate threatened to throw the EU's enlarge- ment programme into crisis.

Amid few signs of compromise, Germany's Foreign minister Joschka Fischer warned that financial reforms were an "essential condition" for the the EU's planned expansion in Central and Eastern Europe.

Germany stepped up pressure on Britain's pounds 2bn annual rebate. The Chancellor, Gerhard Schroder, said: "All the options have to be considered."

He was backed by the French president, Jacques Chirac, who said there should be "no taboos", while Sweden's premier, Goran Persson, said that now the "Margaret Thatcher age was over", it was time for Britain to pay its share. But Mr Blair insisted it was "not negotiable" because the level of reform of the Common Agricultural Policy would not be enough to compensate for Britain's contribution.

Britain's rebate, worth on average pounds 2bn a year, was negotiated by Mrs Thatcher in 1984, but four countries - Germany, the Netherlands, Sweden and Austria - now argue they are in a worse predicament then Britain was in the mid-Eighties.

The Austrian presidency is pressing leaders to agree to a March deadline for the resolution of the budget question, with everything - including the British rebate - remaining on the table.

Mr Schroder has used particularly blunt language to articulate his demand for a cut in Bonn's 22bn mark (pounds 8bn) annual net EU budget contribution. This marks a decisive change for Germany, and Mr Schroder has accused his predecessor, Helmut Kohl, of being "ripped off" over Europe.

Although at odds on the issue of the British rebate, London and Bonn agree on the need to freeze EU spending at its current level, plus inflation, for the years 2000-2006.

That is fiercely opposed by big beneficiaries of structural and cohesion funds, including Spain, whose Secretary of State for European Affairs, Ramon de Miguel, said he did not recognise Germany's call for a cut in its net contribution. "It's like a 20th-century Robin Hood, but in reverse," he told reporters. "We've never recognised that there is a German problem. It's a problem the prosperous countries have to work out among themselves."

The familiar, hard-line positions of heads of government prompted claims from the President of the European Parliament, Jose Maria Gil-Robles, that Thatcherism was "emerging from the grave".

Mr Blair claimed a new consensus on the issue of tax harmonisation, and Downing Street said that his contribution on the issue had been welcomed by Jacques Chirac, the French president. However Mr Blair's contribution has been relatively non-controversial.

Mr Blair's spokesman backed the idea of a March deadline, but added: "Basic positions are being laid out, rather than this being the place where there are real, detailed negotiations."

The European Commission has estimated the cost of enlargement, which will bring up to a dozen Central and Eastern European countries into the union, will exceed $50bn.

Mr Schroder stepped up the pressure for British concessions on the controversial withholding tax on savings, arguing that moves to tackle unfair tax competition should be speeded up and resolved in the first half of next year, during Germany's presidency of the EU.

Over dinner last night, EU leaders were due to discuss a reprieve for duty free.

Start your day with The Independent, sign up for daily news emails
Voices
Homeless Veterans charity auction: Cook with Angela Hartnett and Neil Borthwick at Merchants Tavern
charity appeal
Sport
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
Arts and Entertainment
Strictly finalists Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge
tvLive: Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge face-off in the final
Sport
Ched Evans in action for Sheffield United in 2012
footballRonnie Moore says 'he's served his time and the boy wants to play football'
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Finance Director

£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...

Recruitment Genius: Medico-Legal Assistant

£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

The Jenrick Group: Quality Inspector

£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...

Day In a Page

Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture