German EU dilemma

BONN (Reuter) - Theo Waigel, the Finance Minister, called yesterday for a review of Germany's contribution to European Union coffers and opposition Social Democrats said Britain's generous rebate on its payments should be scrapped.

Bonn has long been Europe's main paymaster, contributing around 28 per cent of total community funds, but mounting budget difficulties since unification in 1990 have caused the Bundesbank and others to call for cuts.

With opinion polls showing German enthusiasm for European union on the wane while social services are being cut and taxes increased at home, EU contributions could become an issue in an important election year.

'The Finance Minister certainly takes the view that the EC contribution from the German federal budget needs to be looked into,' a Finance Ministry spokesman said.

'There will be discussion on this, there has been discussion on this,' he added. 'Of course there can be no question that the distribution among EU countries made several years ago should be declared sacrosanct for all time.'

Germany also feels aggrieved because it has provided the lion's share of Western aid to Eastern Europe and the former Soviet Union, more than all its EU partners put together.

The spokesman acknowledged that any changes in the formula, under which Germany makes the largest net payments into EU coffers while Britain gets a two-thirds rebate, would require the consent of all 12 member countries.