Triumph for Bertie Ahern
But they were more successful in Brussels, where they threatened to veto the EU budget deal if it reduced farm subsidies.
Meanwhile, in Hong Kong, a date of 2013 was put on the ending of export refunds.
In Brussels, France’s President Chirac and Taoiseach Bertie Ahern emerged triumphant from the budget negotiations, insisting that EU agricultural spending was secured until 2014, the start of the next budget period.
They said farm subsidies would stay at the current levels and could be cut only with the unanimous agreement of all countries, regardless of the result of an “essential review” of EU spending and revenue raising in 2009.
Not so happy coming away was British Prime Minister, Tony Blair, agreeing to slash the UK’s EU funding rebate, and thus saddling the British taxpayer with annual bills from £500m to £2bn up to 2013, and probably into the future. The budget deal was to be ratified this week by votes in the UK parliament and the European Parliament.
As it stands, an even higher proportion of funding will go to the CAP than the 40% originally proposed by the European Commission.
But EU member states have been given scope to convert 20% of their direct farm payments into rural development spending, a significant measure which could cut direct subsidies by as much as €58bn if all states took it up.
Announcing the upcoming EU budget review, the European Commission said, “Europeans are living through an era of accelerating change and upheaval. The increasing pace of globalisation and rapid technological change continues to offer new opportunities and present new challenges. Against this background, the European Council agrees that the EU should carry out a comprehensive reassessment of the financial framework, covering both revenue and expenditure, to sustain modernisation and to enhance it, on an ongoing basis. The European Council therefore invites the Commission to undertake a full, wide ranging review covering all aspects of EU spending, including the CAP, and of resources, including the UK rebate, to report in 2008/9. On the basis of such a review the European Council can take decisions on all the subjects covered by the review. The review will also be taken into account in the preparatory work on the following Financial Perspective.”
Crucially, the findings of this review will be published after France’s President Chirac, the CAP’s Number One defender, is expected to have left office.
It is only a review in 2008, and not a commitment to change. But the UK is likely to lead calls for cutting farm spending and instead paying for modernisation of Europe’s overall flagging economy, which is battling to avoid being overtaken by the emerging Asian giants of China and India. And there could be backing from Denmark, Germany, France, Sweden, Netherlands, and Austria, the other countries footing the bill for the six-year EU budget agreed last weekend.
The agreement leaves every Danish citizen’s contribution to the EU budget rising from €40 to €120 per person per year. The Dutch - the EU’s highest per capita contributors - will have their bill eased by €1bn, but Austria’s bill goes up from €750 million to €870 million a year.
