Britain faces isolation heading into crucial EU budget talks

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Britain faces isolation over EU finances at a key meeting today, with its package of proposed spending cuts certain to provoke a barrage of criticism.

Jacques Chirac, the French President, last night became the latest leader to attack the UK proposal, using a phone call to Tony Blair to object to a review in 2009 that could call farm spending into question.

Mr Chirac's spokesman said the president "underlined that the proposals by the British presidency pose problems", adding that he "expressed the wish that the presidency can make new proposals, ensuring in particular that Britain plays its full part in the financing of the enlarged Europe".

Jack Straw, the Foreign Secretary, will be under fire as ministers from the 24 other EU nations give their first formal reactions to the financing plan for 2007-13.

The UK package has been attacked by the president of the European Commission, Jose Manuel Barroso, and countries including Poland and France.

Today's meeting should show whether the countries most affected by the cuts - the 10 new EU nations - are willing to negotiate.

If so, there is a reasonable prospect of a deal since Britain, which holds the EU presidency, has room to offer further concessions.

Though the UK has offered to cut its annual budget rebate by €8bn (£5.4bn) over seven years, the proposal would also reduce subsidies to the new, mainly ex-Communist, nations by €14bn (£9.5bn).

The attitude of central and eastern European nations are crucial and Angela Merkel, the German Chancellor, said Germany was "sympathetic toward the new members and the proposals demand a lot from them". Kazimierz Marcinkiewicz, Poland's Prime Minister, said: "Britain's proposals can be improved, but we're running out of time."

Ferenc Gyurcsany, the Hungarian Prime Minister, predicted a compromise, but added: "We will negotiate until the last minute. We need more, not less of Europe. Europe deserves a better budget."

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