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Last Updated: Saturday, 3 December 2005, 03:20 GMT
New EU states cool on budget plan
Tony Blair and Ferenc Gyurcsany
Hungary's prime minister (right) said agreement was a long way off
The EU's new member states have given a mixed response to UK plans to cut 10% from development aid they were due to receive in the 2007-13 EU budget.

Poland's prime minister suggested some progress was being made towards a deal.

But Hungary's prime minister warned they were "still far from agreement" on the plans, which Estonia had earlier branded "unacceptable".

UK Prime Minister Tony Blair said the UK could give up part of its 5.6bn euro (3.8bn) rebate to reach a budget deal.

Mr Blair's spokesman said the UK might be prepared to relinquish 12-15% of the rebate.

We are still far from agreement today
Hungarian Prime Minister Ferenc Gyurcsany

But he said the UK would not give up the rest of the rebate unless there was major reform of the Common Agricultural Policy (CAP).

Mr Blair warned the new member states they could miss out if the budget was not agreed this year.

He proposed a mid-term review of the budget, which would enable a change in spending priorities in the second half of the 2007-13 period.

The UK proposal will be discussed by EU foreign ministers next week, and by heads of state and government at a Brussels summit on 15-16 December - two weeks before the UK presidency ends.

"We are still far from agreement today," Hungarian Prime Minister Ferenc Gyurcsany said after the meeting between Mr Blair and the leaders of the Czech Republic, Poland and Slovakia, in Budapest.

"We want to come to an agreement but not at any price."

'Very tough'

Polish Prime Minister Kazimierz Marcinkiewicz said his country would not agree to "a bad budget".

"We are nearing a proposal which is not yet ideal but much better than [Britain's] informal proposal," Reuters quotes him as saying.

pie-chart showing breakdown of eu expenditure

Mr Blair's counterparts in Estonia, Latvia and Lithuania, with whom he held talks on Thursday, also opposed development cuts.

Estonian Prime Minister Andrus Ansip described the proposal as "unacceptable".

Attempts last June to reach a budget deal collapsed when the UK rejected calls to drop its rebate without an overhaul of the CAP, something France - the biggest farm subsidy beneficiary - refused.

Reaction from UK political parties has been less than enthusiastic.

If a budget is not sorted soon millions in Eastern Europe will lose out on vital funds for development
David Phillips, Cambridge, UK

Conservative Party Europe spokesman Graham Brady said it was "a surrender" which could result in the worst of all worlds.

Nigel Farage, leader of the UK Independence Party in the European Parliament, said Mr Blair had alienated all 24 other nations and "opened a can of worms".

"Suddenly British taxpayers are going to say 'why should I, in a couple of years time, pay 5p in the pound of my income tax straight to a European Union that hasn't had its accounts signed off for the last 11 years?'"

Opposition leader Michael Howard said UK taxpayers would be "saddled" with more EU costs, while getting nothing in return.

Liberal Democrat Treasury spokesman Vince Cable said: "There's a danger of getting the worst of all possible worlds.

"Britain gives up 1bn a year, the Eastern European countries get less money and there is no agreement to reform agriculture."

Meanwhile, Britain's former Europe Minister, Keith Vaz, said it was vital agreement was reached soon.

"If we don't get a deal now, we're not going to get a deal in six months' time, because many of these Eastern European countries trust the prime minister - he delivered on enlargement - and therefore these negotiations have to go on."

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The EU budget row explained

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