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Last Updated: Monday, 13 June, 2005, 18:00 GMT 19:00 UK
Blair vows firm line in EU battle
Tony Blair
Mr Blair says the whole EU finances need a shake-up
Prime Minister Tony Blair says he will be "diplomatic but firm" in telling EU nations he will discuss the UK's rebate only if large farm subsidies are axed.

Mr Blair has now arrived in Germany as part of a whirlwind tour which will also include talks in France.

French European Affairs minister Catherine Colonna says the UK's defence of its 3bn rebate deal "defies logic".

And EU Commissioner Peter Mandelson has urged the UK to look at the rebate as part of a wider budget rethink.

In a speech in London, Mr Mandelson said it could not be right to ask the poorer countries which have recently joined the EU to pay for any part of the rebate.

He also argued the UK needed a change in tone and substance to win support in Europe, saying its approach in Brussels had sounded "neo-Thatcherite".

European foreign ministers have also been discussing the EU budget and constitution in Luxembourg ahead of Thursday's European summit.


France says the UK is undermining European solidarity by refusing to give ground on its annual refund from the EU.

But Mr Blair signalled he intended to continue that stance when he meets German Chancellor Gerhard Schroeder and French President Jacques Chirac.

The British position on the rebate defies EU logic and undermines EU solidarity
Catherine Colonna
French European Affairs Minister

Speaking during a visit to Moscow on Monday morning, Mr Blair said: "I will be, as is my way, diplomatic but firm.

"The context for this discussion is one in which two countries have now voted against the European constitution.

"Why? Because people in Europe did not feel that sufficient attention was being paid to their concerns about Europe and its future."

Mr Blair said the British rebate could not be discussed unless it was alongside debate on all EU financing "including that 40% of the budget goes on agriculture which employs only 5% of the people".

Farm protection

The UK says it will use its veto if necessary to protect the rebate.

The European Council will have to settle on the size of the EU's budget for 2007-2013, and the way ahead for the EU constitution.

France's Mrs Colonna made it clear there was no room for negotiation over the lucrative farm deal, saying the CAP had been reformed in 2002 and did not need to be re-examined.

Everyone has to move, and if everyone is ready to compromise, we can make it
Joschka Fischer, German foreign minister

She said the reduction and "progressive disappearance" of the rebate was a necessity.

"The British position on the rebate defies EU logic and undermines EU solidarity," she said.

On renegotiating farm subsidies German Foreign Minister Joschka Fischer said: "Everyone has to move, and if everyone is ready to compromise, we can make it."

But German Chancellor Gerhard Schroeder said it would "not be possible" to achieve a deal on a new EU budget without a UK concession.

The UK won the rebate in 1984 after tough negotiations by then-Prime Minister Margaret Thatcher.

European Commission president Jose Manuel Barroso told BBC1's Politics Show it was not fair for the 10 new, poorer EU nations to take proportionately more of the burden than the UK.

UK Conservative leader Michael Howard said debate on the rebate was a victory for Mr Chirac.

He said there was no need for a budget deal this week and the rebate was a diversion from more fundamental questions.

The Liberal Democrats say the rebate is justified because of inequalities created by the farms subsidies.

Watch Jack Straw's remarks on the rebate


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