Rift threatens EU expansion

Deep divisions over the eastward expansion of the European Union were exposed yesterday when Germany and Britain led opposition to plans for a multimillion-pound package of subsidies to farmers from the former Communist bloc.

A total of four countries prevented agreement on a proposed package of agriculture aid for countries joining the EU, fearing it would cause an explosion in the the cost of the €45bn-a-year (£30bn) Common Agricultural Policy.Member states were unable even to agree on postponing the issue until the autumn, leaving talks in limbo.

The deadlock underlined the problems that must be confronted if the EU is to meet its end-of-year target for completing negotiations with the 10 nations that have a chance of joining in 2004. And it also illustrated the link between two crucial issues: the EU's enlargement and plans, later this summer, to consider a reform of the Common Agricultural Policy, which swallows half of the EU's annual €90m budget.

There was a clear division between countries that benefit from the CAP and which have an interest in preserving it, and reformers who do not want to extend it. France and Ireland, both of which do well from the CAP, backed the proposal for payments to farmers from applicant countries, while Germany, Britain, Sweden and the Netherlands blocked it.