Blair: UK will only pay fair share of EU costs

Britain will not pay more than its fair share into the EU budget, Prime Minister Tony Blair insisted today.

He said Britain would have to pay more into the EU's coffers if the bloc was to enlarge.

But he said it would not pay over the odds and he promised he would not give up the UK rebate, saying it would actually go up.

Speaking after talks with Hungary's Prime Minister in Budapest Mr Blair said: "On any basis, if you enlarge the European Union we have to pay more. The question is making sure we don't pay more than our fair share, but making sure we do pay our fair share."

Mr Blair told Sky News: "We are not going to be giving up the rebate. The rebate on any basis, on any proposal, will grow - not diminish."

Mr Blair insisted enlargement was in Britain's interests. He said the new countries would provide jobs and prosperity for Britain as they developed economically.

He said the accession countries believed they would end up paying more into the EU than they took out within a few years.

The Prime Minister declined to detail the figures involved in Britain's compromise proposals.

But he said Britain had to contribute to the costs of economic development in the new states.

"If we refuse to pay any money to that at all when we are saying that Germany and France and Italy and all the rest should, then that would be unfair," he said.

"What we are not prepared to do is pay any more into the Common Agricultural Policy."

Mr Blair added: "It is going to be difficult to find an agreement. But it is in Britain's interests to find an agreement. Otherwise you have stalemate in Europe."

Mr Blair: "Of course it is important. To get any deal it has got to be a fair deal under the principles of solidarity and a fair deal for each country."

But he warned: "I do not minimise the difficulties of finding an agreement.

"But on the other hand, I think there is a will to carry on talking and working on it, so this is what we will do."

Mr Blair said he agreed with the broad outline of what the Prime Minister of Hungary, Ferenc Gyurcsany, was saying that there were three aspects to this.

"You have got the British rebate, the CAP and the cohesion fund, money that is used for economic development.

"He is right to say there is a relationship between all three of these."

Mr Blair said there would be a meeting this weekend of the G7 ministers, the finance ministers, and that Brazil, India, China and South Africa would be invited to that meeting.

"And that meeting will be trying to find a way of re-energising the World Trade Organisation negotiations."

The accession countries should take a "hard-headed" approach to the negotiations, the Prime Minister's official spokesman later said.

Mr Blair has suggested they should accept a lower "theoretical" level of development funds in return for a deal that gives them the money earlier.

His spokesman said: "We in Britain have to be hard-headed about this. We have to recognise what is in the interest of Europe, what is in the interests of Britain, separate out what we would wish from what is achievable.

"I think others in Europe and the accession countries equally have to be hard-headed and recognise that they face difficult choices.

"They have to, if you like, distinguish between what is theoretically possible and what is realistically possible and also what is in their interests."

The spokesman said: "Is it in their interests to postpone the possibility of a deal and therefore them getting the money for maybe one, maybe two years.

"Or is it in their better interests to get the money now?"

Mr Blair allowed himself a brief smile as he said: "This is going to be an interesting couple of weeks ahead of us."

He said they would put down firm proposals early next week and then have a chance to discuss whether it was possible to reach agreement or not.

"This has to be done on the basis of solidarity across the board. It will not be easy, but we will do our best because it is important that we get this budget position sorted out."

He stressed that the new EU countries needed the certainty of a budget. Later, in an interview with Sky News, Mr Blair posed the question: "If we manage to get agreement now, can we insist on a review of the budget in the next few years that allows us to make fundamental reforms of the CAP?"

Mr Blair said that if they succeeded in getting a deal, it would mean that for the first time Britain would be roughly equal to France and Italy in the payments they made.

But he warned: "The only way in the short term that we are going to open up the CAP is through world trade talks.

"If the world trade talks fail, that will be a major blow to all of us, to countries like Britain and other European countries, America and Japan and the other emerging economies.

"We have got some very big negotiating coming up in the next couple of weeks."

Mr Blair agreed this was very hard for France - "for French public opinion this is a very tough issue".

But he warned: "If the world trade talks fail, that will be disastrous for the world economy."

Mr Blair said they could not accept a lower amount of British rebate. He expected the rebate would go up in cash terms, but said that Britain had to pay its fair share for the enlargement of the EU.

He said the enlargement of the EU - "which we all support" - imposed costs on all the member states.