Wednesday, November 17, 2004

The Bloody British Question

In Thatcher's day, the EU budgetary issue revolved around her quest for a rebate to such an extent that it was known in Brussels circles as the British Budgetary Question, which quickly became abbreviated to BBQ and then reinterpreted as the "Bloody British Question".

And here we have the BBQ again, it all its glory, which is going to run and run. This time though it is Gordon Brown is in the frame, with him having to face off calls from both Germany and the Netherlands trim the amount refunded from the British levy.

He is going through the ritual denunciations, saying that "current proposals are premature and the rebate remains fully justified" and will no doubt keep saying precisely that, right up to the day he caves in and allows the rebate to be cut.

On the table at the moment, is a commission proposal to cut Britain's rebate and redistribute the proceeds to the other net paymasters, on top of an increase in the EU's budget by 35 percent between 2007 and 2013. Brown calls that "unrealistic and implausible," something on which he and German finance minister, Hans Eichel, agree.

Holding the uneasy balance on the rebate is the Dutch presidency, which puts it in an awkward position as a potential beneficiary of any new regime, with Dutch finance minister Gerrit Zalm stating that there were "quite some difference of opinions in the room." This English habit of understatement seems to be catching.

Germany, which contributed 7.7 billion euros to the budget in 2003, is the biggest contributor to the EU's 100 billion euro annual budget, and is nevertheless adamant that there must be a "correction mechanism". Eichel has reiterated that "the limits of what Germany can bear have been reached," and is not prepared to back down.

All this makes for an interesting situation as the fight may come to a head just about the time Britain is poised to vote in the referendum for the constitution. If there is going to be a fudge, EU finance ministers will have to stretch their creative powers to the limit if Brown is to get it past an increasingly suspicious and hostile British public. On the other hand, we do still have the veto…

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