Haggling begins on who pays for EU enlargement

THE battle to decide who pays for enlargement begins todayok in Brussels as the leaders of the EU-15 meet to agree the details.

It looks like being a contest of wills as Viking determination to reach a solution clashes with a raft of self-interest.

The Danish presidency has warned it wants a decision, and has reserved hotel rooms until Sunday for the leaders even though the meeting is due to end on Friday night. Over the past few weeks and months, the big four net payers for the EU Germany, Britain, Sweden and the Netherlands have not blinked on the issue. They are adamant they will not foot the estimated 20 billion bill for farm subsidies and structural funds for the ten new members over the first three years of their membership from 2004. They are demanding that instead, Common Agriculture Policy payments should be reduced to meet the costs of enlarging the union. However, the battle lines are firmly drawn, with Ireland joining France and up to six other members in insisting their farmers will not suffer.

The Danish presidency has warned diplomats from every member state they will not brook failure at the summit. A Danish spokesman said yesterday: "We are determined that we will find a solution before people leave Brussels. It will be a long meeting."

The plan was to have the leaders agree their financial bottom line at the Brussels summit today and tomorrowok to allow negotiations to conclude with the ten candidate members before the enlargement summit in Copenhagen in mid-December.

The Danish presidency has already underlined the necessity to give sufficient time for these negotiations so the candidates are treated with dignity and not simply victims of a take-it-or-leave-it approach. They estimate the cost at 1 a year per EU citizen.

However, as the leaders of the 15 sit across the table from one another today and tomorrow, what is at risk is not so much the fate of the candidate countries as setting the ground rules for who pays for the EU after the next budget comes into force from 2007 to 2013.

The big four want to set the parameters now before the much poorer accession countries join, at which point they will be able to take part in these budget negotiations due to start in 2006.

Each of the candidates has a shopping list of what they need, to ensure firstly that they do not end up paying money to the EU that goes to subsidise wealthy French or Irish farmers, and secondly that their farmers can survive in a market where they compete with the subsidised farmers. They also want to share in EU policies, where funds are transferred to the poorer countries to build up infrastructure and help improve their economies.

Each country has its own plan as to the level of payments they need and how these are distributed to be used to best advantage.

Every EU member country has agreed enlargement is now inevitable by the agreed date of 2004. It is now down to haggling over the cost and who pays.