Britain opens second front on EU budget

Britain is risking a second, bitter, rift with its European partners over how to finance the EU by preparing plans for multibillion-euro cuts in spending plans.

Already embroiled in a fierce row over the size of the UK's annual €5bn (£3.4bn) budget rebate from Brussels, Britain, which holds the rotating presidency of the EU, is now ready to open another front.

Though the idea of curbing spending might appeal to other big contributors to EU coffers, it is certain to provoke a furious row which could poison the atmosphere before a summit on finance on 15 December.

At a meeting of EU leaders in June, Tony Blair rejected a proposal for a budget for 2007-13 which was equivalent to 1.06 per cent of the gross national income of the 25 member states.

The UK is now expected to put forward proposals for a budget equivalent to 1.03 per cent of gross national income. Diplomats expect the package, due to be announced on 5 December, to include cuts in the structural fund payments to the 10 nations that joined the EU last year.

Such a move is likely to infuriate most EU nations. At a recent meeting of foreign ministers at least 17 countries called for the UK to stick to plans similar to those rejected in June.

Many countries feel it is too late to revisit fundamental issues. Others feel the proposal is a tactic to delay confronting the question of the rebate.

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