UK may lose £2bn EU rebate, says Prodi

ROMANO PRODI, the new European Commission president, reawakened the controversy over Britain's £2bn annual budget rebate yesterday, suggesting that it will have be sacrificed to help fund Europe's enlargement to the east.

ROMANO PRODI, the new European Commission president, reawakened the controversy over Britain's £2bn annual budget rebate yesterday, suggesting that it will have be sacrificed to help fund Europe's enlargement to the east.

The comments came in an interview with a German news magazine in which Mr Prodi was questioned about the financial effects of expansion. Asked by Der Spiegel whether the United Kingdom will ultimately lose its rebate, Mr Prodi said: "I assume so, each country must carry a full share of the burden."

In an upbeat assessment of the possibility of early enlargement, Mr Prodi argued that the European Union should be ready to admit the first applicant countries in 2002 - the target of Hungary - and predicted that the union "will be bigger" by the end of his term in office in 2005.

Other big net contributors to the EU have argued that the deal Baroness Thatcher negotiated for the UK cannot be sustained when the 15-nation bloc expands.

However, Mr Prodi's intervention comes less than seven months after heads of government reached a deal at the Berlin summit which kept the UK rebate largely intact until 2006.