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Another "victory" on the way?

Posted by Richard Thursday, July 15, 2004

Contrary to the speculation of my esteemed colleague, the commission decided after all to bite the bullet and launch its much leaked proposals for dispensing with Britain's budget rebate.

This, however, is only one side of the package. The EU is also demanding more money from its increasingly unwilling contributors, aiming to bring spending over the period 2007-2013 to an average of 1.14 percent EU gross national income (GNI).

This is somewhat more than the cap of 1.0 percent of GNI demanded by the EU's six biggest net contributors in December and would increase EU expenditure from 120.7 billion euros in 2006 to 158.5 billion in 2013.

The demand has prompted some media sources to chirp happily that the commission is putting itself "on a collision course" with the EU's richest countries. But this is, in fact, just the early stages of the political manoeuvring. The horse-trading will start in earnest in September when the finance ministers meet.

Prodi says the cash is needed to meet challenges in the years ahead, not least coping with the accession countries, as their full entitlements to CAP subsidies and structural funds kick in. But then the demob-happy Italian can afford to say that. He will not be around when the negotiations come to the crunch. That will be the unhappy lot of Jose Manuel Durao Barroso - assuming the socialists in the European parliament can swallow their pride and vote for him.

Barroso himself, no doubt with an eye on his confirmation proceedings, is calling the 1.0 percent spending cap "fundamentally flawed". Chris Patten, on the other hand, no doubt with his eye on the EU constitution referendum, is saying that he is "deeply disappointed" that the proposals "will set back our ability to argue a positive European case in the UK".

Britain, of course, in the form of Europe minister Denis MacShane, is uttering ritual denunciations, claiming that the rebate is "not on the table". But that too is the opening bid. The question is not whether the UK will eventually cave in, but how it will be dressed up to look like one of Blair's famous "victories".