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Friday, 25 October, 2002, 11:50 GMT 12:50 UK
Q&A: The UK's EU rebate
The French are calling for an end to the UK's EU budget rebate. BBC News Online examines some of the key issues.

Is this something to do with Margaret Thatcher?

The British budget rebate was famously negotiated by Margaret Thatcher in 1984 after she declared: "I want my money back."

That was the culmination of five years of argument, with other member states saying that contributions were like taxes - nobody could claim back what they put in.

Mrs Thatcher, in one of her most famous 'handbaggings' said unless a rebate was given she would veto any further expansion of spending.

What was it for?

It was intended to make up the shortfall between what the UK paid into the EU and what it got back.

The UK tended to get back less than other countries because of its relatively small farming industry - and the fact that so much of EU spending was on farm subisidies.

Is it worth much to the UK?

Although it varies from year-to-year, the UK's rebate was worth about 2.8bn last year.

Downing Street that says that even with the rebate the UK is the second highest contributor to the EU, with Britons paying the fifth highest amount of citizens of any member state.

Without the rebate, Downing Street says, the average Briton's contribution would be four times higher than the average French or Italian person.

Why does France want it scrapped?

French President Jacques Chirac called for the rebate to be scrapped ahead of summit talks over the expansion of the European Union.

It has been portrayed in the UK as a call motivated by a desire to stop the wholesale weakening of the Common Agricultural Policy, which France is a big beneficiary of.

The theory goes that France is saying: "You mess with our farmers and we'll get your rebate scrapped."

What does Tony Blair say about it?

His spokesman said the rebate is non negotiable.

So there will be no change then?

France and Germany have agreed a compromise deal to cap spending on agriculture from 2006 to 2013, rather than to fundamentally shake-up the spending system.

But the French president insists that the Franco-German meeting agreed that the UK rebate would be looked at again before 2006.

The Danish prime minister Anders Fogh Rasmussen, host of the summit, was keen to stick to the agenda items already agreed and appeared to rule out talks over the rebate: "If we start raising every issue, we'll never finish."


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