Britain's EU presidency is hobbled by old vices and new

Those who still believed that the Prime Minister had returned from the European summit a conquering hero should have been disabused by yesterday's Commons statement. For all the smoothness of delivery and customary bravado, Mr Blair was conspicuously on the defensive. Both his statement and the answers that followed were clearly designed to dispel two impressions, both of which could be highly damaging as Britain prepares to take over the EU presidency.

Those who still believed that the Prime Minister had returned from the European summit a conquering hero should have been disabused by yesterday's Commons statement. For all the smoothness of delivery and customary bravado, Mr Blair was conspicuously on the defensive. Both his statement and the answers that followed were clearly designed to dispel two impressions, both of which could be highly damaging as Britain prepares to take over the EU presidency.

The first was that this country is isolated; that at Brussels it was - as so often in the past - Britain against the rest. The second was that, in rejecting a compromise on the British rebate, Mr Blair was effectively delaying agreed payouts to the poorer "new" European countries, in particular Poland. The Prime Minister was not fully convincing on either count.

Time and again, he stressed what had not happened in Brussels, rather than the open disagreement and cold-shouldering that indisputably had. Time and again, Mr Blair told MPs that they might have got the wrong idea. Thus Britain had not been without allies, either coming in or going out, and it had not been opposed to a deal. Above all, on the rebate, we had not ruled out discussion or tried to get out of our obligations. Europe's credibility, Mr Blair said, demanded "not just a deal, but the right deal".

In fact, all the denials and explanations said far more about the outcome of the ill-fated Brussels summit than the Prime Minister may have intended. They showed, first, just how long a shadow Mrs Thatcher's intransigence still casts over our relations with other European governments. They showed how vulnerable Britain still is to accusations that, in spirit and language, it has never really become a full member of the club. And they showed that, despite his European-sounding statements when he first became Prime Minister, Mr Blair is still perceived to be hovering on the edge. This is not an ideal position from which to embark on a six-month presidency that coincides with one of the European Union's deepest crises and which will demand exemplary powers of diplomacy and persuasion.

The denials also demonstrated, secondly, Mr Blair's sensitivity to the charge of hypocrisy over the rebate. As one of the architects and most enthusiastic proponents of enlargement, Mr Blair now seems to be blocking the flow of money that the east and central Europeans were relying on. The impression created is that Britain was all in favour of recruiting new members to augment the number of its likeminded allies. But when it comes to contributing extra money, or phasing out the British rebate - well, that is another matter.

This perception has already brought furious headlines in Poland and risks the loss of the allies Mr Blair so deliberately courted. Thus Mr Blair was concerned to warn MPs yesterday that any new budget arrangements would require higher payments from all the richer countries, Britain included.

But this is perilous territory. As we have argued many times, the current EU budget arrangements are untenable and need thorough reform, starting with the Common Agricultural Policy. As we have argued, too, the latest crisis offers a long-overdue chance to consider an overhaul. Mr Blair's difficulty is that, unless he can refute the age-old charge that Britain is half-hearted about Europe and the more recent charge that it is protecting its own interests at the expense of the far poorer "new" Europeans, his prospects of achieving anything during Britain's presidency are negligible. It is regrettable that as 1 July approaches, we are likely to hear far more disclaimers and denials than positive plans for the next phase of the EU's evolution.