Merkel attacked as deal makes Germany biggest EU donor

Angela Merkel's reputation as a European summit broker was severely tarnished when it was disclosed that Germany is to become the highest net contributor to the EU budget, with its payments increased by €2bn (£1.4bn) a year.

Germany's first woman Chancellor was showered with praise, particularly in the British press, for preventing the collapse of last weekend's EU summit which enabled Tony Blair to present his controversial face-saving formula on the British budget rebate.

But new estimates on future EU budget contributions, published yesterday in Berlin, showed that as a result of Ms Merkel's brokering, Germany would see net payments rise by €2bn a year, bringing its annual contribution to €10.4bn. "In relation to its economic strength, Germany will become the biggest net contributor to the EU budget," the Berliner Zeitung said. In recent years, the Netherlands has been the biggest.

The paper also noted that Ms Merkel's budget compromise flouted an agreement between her governing coalition partners, which stipulated that Germany should aim to have its budget contributions cut. Christine Scheel, of the Greens, said: "Merkel was praised from all sides for her wonderful achievement, but if it means that Germany's contribution will increase considerably, there is a hair in the soup."

Hermann Otto Solms, of the liberal Free Democrats, said: "This highly acclaimed compromise is financially irresponsible."

Ms Merkel's government conceded the budget increases were in store. A spokesman, admitted: "We will be paying less than we expected to pay but more than we have done in the past." The bigger contribution was needed to finance increased aid to the EU's new east European member states. "All the major west European industrial nations face the same problem," he said.