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Last Updated: Saturday, 3 December 2005, 12:33 GMT
UK 'may not get EU budget deal'
Douglas Alexander
Douglas Alexander said the UK wants to try and get the 'right deal'
Europe Minister Douglas Alexander has warned the UK may not be able to secure a deal on the European Union budget.

Tony Blair wants new member states to accept a 10% cut from development aid and says the UK may be prepared to give up part of its annual 3.8bn EU rebate.

But after the proposals received a frosty reception from new member states from the old Soviet bloc, Mr Alexander told the BBC a deal looked uncertain.

Lib Dem leader Charles Kennedy warned Mr Blair is "on a hiding to nothing".

Mr Kennedy accused the prime minister of acting "at the 59th minute of the 11th hour, scrambling around" for a deal.

Meanwhile, Mr Alexander told BBC Radio 4's Today programme the next seven days could be crucial in determining whether a deal was possible in the final days of the UK's presidency of the EU.

He said after the proposals were tabled at the beginning of the week, he expected there to be further discussions over the details.

"I think probably by the end of next week we will have a clearer idea of whether a deal can actually be done," he said.

'Right deal'

"If a deal was not done then I think it would be greatly to our disadvantage, but that may be where we end up.

"We are not prepared to sign any deal. We want to try and get the right deal."

Mr Blair wants to slim down the overall EU budget and reduce payments to new members while still ensuring the UK pays its "fair share" towards enlargement.

What we're seeing now is 59th minute of the 11th hour scrambling around and, frankly, not a good exercise in trying to win friends and influence people
Charles Kennedy

But the bulk of the annual refund will not be renegotiated without an overhaul of the Common Agricultural Policy (CAP), which faces fierce opposition from France and others.

The new EU states have reacted coolly to plans for reduced payments.

Mr Kennedy said there was "an injustice in the system, given enlargement and given the different structure of agriculture within Europe".

"We supported the principle from the outset that, during the British presidency of the EU, you should be looking to renegotiate, in terms of the rebate," he told the Today programme.

"But only for the wider changes you are looking for in the EU budget.

"What we're seeing now is 59th minute of the 11th hour scrambling around and, frankly, not a good exercise in trying to win friends and influence people."

Mr Kennedy said the funding of the CAP could be restructured on a "co-financing" basis.

This would mean that while overall EU support for agriculture was reduced, individual member states, such as the UK, could make up shortfalls from domestic budgets.

Significant contribution

Mr Alexander said the rebate "should not be characterised as some kind of conflict between Britain holding onto the rebate and the CAP being supported in France".

"Let's not forget, therefore, that in every one of the 21 years since the rebate was secured back in 1984, France has contributed significantly less to the EU than the UK."

Under the new proposals, there would be "rough parity" with countries of similar sizes, he said.

He said there were "no guarantees" that a budget deal could be achieved by the end of the British presidency but that the government would try "to get the right deal".

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