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Last Updated: Friday, 20 May, 2005, 15:03 GMT 16:03 UK
EU says UK rebate 'not justified'
Jose Manuel Barroso
The EU commission president had talks at Chequers
EU Commission President Jose Manuel Barroso has said the UK's 3bn EU rebate is no longer "justified".

In a speech in London, he said Britain was "much more prosperous" than 20 years ago when the rebate was agreed.

Tony Blair has said he will fight any moves to get rid of the rebate - and insists the UK could veto such a move.

Conservative foreign affairs spokesman Liam Fox said there should be "no question of any change" to the rebate.

The issue is likely to be overshadowed by the EU constitution in the run up to Britain taking over the EU presidency in July.

Mr Barroso said there was no 'Plan B' if the French or Dutch vote to reject the constitution in upcoming referendums.

Failure?

But he said he "very much" hoped that both countries' citizens would ratify the treaty.

The rebate was hard-won by Margaret Thatcher and saves British taxpayers billions of pounds a year
Liam Fox

"I believe that in case there was a 'No' in any of those countries it would be perceived outside of Europe as a failure for Europe," Mr Barroso said.

"People will say, 'those Europeans cannot even agree about a treaty'."

Earlier Mr Barroso held talks with Mr Blair ahead of the UK taking over the presidency of the EU on 1 July.

The row over the future of Britain's 3bn EU rebate was said to have been raised in "general terms" only.

'More prosperous'

Mr Barroso later told an audience at the London School of Economics: "When Britain got the rebate there were good reasons for it the situation has now changed."

He added the UK was "much more prosperous" than it had been 20 years ago and "above all" the EU had changed, expanding to 25 countries, many of which were poorer than Britain.

He said he knew there were strong objections in the UK to the loss of the rebate.

But he suggested the British taxpayer will understand it "has to go" if politicians "had the courage to explain why"

Conservative foreign affairs spokesman Liam Fox said there should be "no question of any change" to the rebate.

"The rebate was hard-won by Margaret Thatcher and saves British taxpayers billions of pounds a year. Tony Blair must make it clear that there is no question whatever of any room for negotiation."

The French referendum on the EU constitution is also understood to have been discussed when Mr Blair met Mr Barroso.

Ministers have said there will be a UK vote provided there is still a proposed referendum.

The UK's rebate was already under growing pressure with Jacques Chirac calling for its renegotiation.

The rebate was won by Margaret Thatcher in 1984.

Mr Blair's spokesman said: "The rebate is fully justified, full stop."




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