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Last Updated: Monday, 13 June, 2005, 10:59 GMT 11:59 UK
The traditional EU budget dance
By Nick Assinder
Political Correspondent, BBC News website

It is hard to escape the feeling that, in the run-up to the Brussels summit, EU leaders are engaged in an elaborate, much-rehearsed and entirely predictable dance.

Prime Minister Tony Blair
Blair will veto changes to rebate
The steps - specifically on the UK rebate and reform of the Common Agricultural Policy (CAP) - are designed to delight the leaders' respective domestic audiences and trip up the opposition, and can be executed with their eyes closed. It goes like this.

Someone, traditionally the French President, executes the time-honoured step of demanding Britain abandons its 3 billion budget rebate.

Others crowd around to join the jig as it rises to some sort of crescendo.

Then the British prime minister of the day pirouettes in to stamp out a resounding "forget it" and, just for good measure, counters with a demand for CAP reform.

Everyone rushes around the stage as the noises off get louder and louder until it all ends with the dancers collapsing having made no significant progress whatsoever on their demands, but declaring victory.

Genuine change

If that sounds cynical, then it is simply because we have been here so many times before. And there is little to suggest it will be any different this time around.

One extra ingredient this week is the fact that the EU budget needs to be set for 2007-13, and that might offer the prospect of genuine change.

French President Jacques Chirac
Chirac has led rebate demands
Foreign Secretary Jack Straw has said that the UK rebate is not the problem. He says the problem lies with the very structure of the EU budget where Britain wants to see spending controlled.

And, echoing the prime minister's words, he said the only way the rebate could be on the table would be if the rest of Europe was ready to grasp that reform nettle.

It is a reform that will have to happen at some point now the EU has extended to include Eastern European states who want equity from the system.

But no one is holding their breath that this summit will be the one to square this particular rebate-reform circle.

So we end up with Tony Blair prepared to deploy his veto to protect the rebate and Jacques Chirac not countenancing CAP reform.

Difficult nettles

The Luxembourg presidency needs to come up with a compromise which will secure the future budget without leaving the new entrants with grievances over their share.

Foreign Secretary Jack Straw
Straw wants budget reforms
Meanwhile all this is proving a major distraction from the potentially far more serious problem of the rejected constitution and the future direction of the EU. A happy distraction for the French, no doubt.

There will be intense negotiations in the coming days with the prime minister visiting Berlin, Luxembourg and Paris as part of his campaign to encourage the EU to finally grasp some particularly difficult nettles.

And, if history is anything to go by, there may be some sort of compromise by the end of the summit, although it is far from guaranteed, and few believe those two central issues of the rebate and CAP will be settled.

So the focus will then shift to the UK as the prime minister takes over the presidency of the EU for six months from 1 July.

As he said himself, echoing the famous Chinese curse, he will take over at "an interesting time".

Watch Jack Straw's remarks on the rebate


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