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Making A Gesture
A British gesture for Chirac
President Jacques Chirac has demanded that Britain "make a gesture of solidarity for Europe" by giving up its £3 billion annual rebate from the EU.
Tony Blair responded with Anglo-Saxon style: "Britain has been making a gesture because over the past 10 years, even with the British rebate, we have been making a contribution to Europe two and a half times that of France.
"Without the rebate, it would have been 15 times as much as France. So that is our gesture.
"The reason why the rebate exists is because otherwise there would be this quite unfair proportion of British contribution. The reason for the unfairness is because the spending of Europe is so geared to the common agricultural policy" (of which France is the principal beneficiary - editor's note).
Chirac ruled out any such "gesture" himself - "we cannot accept a reduction of direct aid to French farmers" - having stitched up the lion's share of CAP loot until 2012 during a tete-a-tete with Germany's Gerhard Schröder last year.
Forty percent of the EU's budget is spent on the Common Agricultural Policy.
Cynics believe that Chirac is orchestrating a row on the British rebate to deflect EU criticism of how he managed to derail the European project by losing May's referendum. Most European nations resent Britain's 21 year old rebate - those who do not want to freeze or abolish it want their own cashback from the EU, especially as Brussels threatens to guzzle more national cash to pay for its eastwards expansion.
Blair has threatened to use Britain's veto to secure the rebate. The PM is said to have "fire in his belly" following a meeting with Chancellor of the Exchequer Gordon Brown, in which the need to take a hard line on Britain's budget contribution was raised.
That said, he has said that there is "room for compromise" - always ominous words from Blair, which usually mean that he is ready to give up something or other to keep his rivals in Europe happy. Many British commentators have been unnerved by Blair's refusal to say he would oppose a freeze on the rebate, suggesting that any compromise might involve a cap or limit to Britain's cheque.
He hinted that the rebate could be up for negotiation "if there was a fundamental debate... about the future of European financing." This seems sensible enough: Most observers agree that if a fairer system of funding the EU were agreed, Britain's rebate would be reduced or abolished. However, no renegotiation of the budget or the rebate can be countenanced without a full review - or better still, the abolition - of the Common Agricultural Policy.
France is about as likely to agree to serious reform of the CAP as it is to erect a enormous statue of George W Bush astride the river Seine, so unless Blair is softening Britain up for a humiliating climbdown, the rebate must stay.
