Downing Street Says » EU Finance

Asked when the review the Prime Minister had mentioned in the House would have reported, the Prime Minister’s Official Spokesman (PMOS) replied it would end in 2008. The PMOS explained that whenever the Luxembourg Presidency put its original proposal to us in draft, they proposed a due process reporting around 2008. We were concerned this proposal about its wording could have been interpreted as both promising a change to the CAP but also the reverse. As the PMOS briefed at the time, we were unhappy with that, and as the PMOS briefed later on, the final proposal put to us by the Presidency had dropped the reference to 2008 and the language had gone backwards, not forwards. Given what others had said during the day about the impossibility as they saw it about a change in the CAP before 2014, that was certainly unacceptable to us.

Put to the PMOS that the Prime Minister during his EU statement was preparing the country to pay more to the EU as poorer countries should pay less, the PMOS said that the Prime Minister was making a case which reflected was our basic approach which was that the EU budget should reflect the needs of Europe in the age of globalisation, and also should be a fair representation of a country’s relative wealth. Given our relative wealth, this is why the Prime Minister had said what he said.

Asked if there was any concern that some of the new EU members might be seen as being unhappy regarding their own interests within Europe following the summit, the PMOS said that as he had said earlier, it was inevitable after a summit such as Friday’s, there was frustration. We understood why the Eastern Europeans would have preferred to have had the certainty of the deal, even if it was not the right deal. We were not alone in arguing, as the comments of the Swedish Prime Minister showed, that it was better to get the right deal. The other point was that we remained the second highest contributor to enlargement, and in terms of the proposal from the Presidency, it would still have meant that fifty per cent of the money would not have gone to the Eastern European countries, but rather to the richer countries. Therefore, it was that context that we would be anxious to ensure that the Eastern European countries understood.

Asked what the PMOS meant by "richer countries", the PMOS said it included France, Luxembourg and others.

Asked if Luxembourg could be economically compared with France, the PMOS said if the figures were examined, they were very surprising.

Asked under the proposal we had put forward, how would we have paid for the extra costs of enlargement, the PMOS said this was a proposal coming from the Presidency, not one that we were putting forward. We had suggested a mid term review to the Presidency around 2008, and therefore, that was how we had brought forward a mid-term review. In terms of what the Presidency were proposing in its initial proposal, it was that the accession countries would not pay any contribution to our rebate for that proportion of the EU budget devoted to structural cohesion. Their calculation would be taken without taking that into account. The PMOS said we had no objection to the mechanism, but in terms of the amount of money involved, it would have gone too far.

Put to the PMOS that the Prime Minister in his statement today referred to "the usual cobbled together compromise in the early hours of the morning", and was this an admission that he had "gilded the lily in the past" in a search for a consensus, and there was not much point in searching for one at the moment, the PMOS said that what the Prime Minister was reflecting was his view about the implications of the votes in France and the Netherlands. The Prime Minister’s view was that Europe had to change, not just in important aspects such as the balance of the budget, but also in the way in which it connected with people. It had to work with the grain of public opinion, rather than against it. The Prime Minister believed there was an appetite in large sections of Europe to do that, and he would set out on Thursday his vision of how Europe could address that change agenda. What the Prime Minister had been addressing specifically with his language today was the argument that said the right response to the "No" votes in France and Holland was to produce a deal on the budget, even if that was not the right deal. The Prime Minister did not agree with that approach, nor did others.

Asked what a realistic timescale was to get the "right deal", the PMOS said that as he had said earlier, we would do our utmost to try and push this forward. However, the prospects for doing so could only be assessed once the discussions had progressed further. The PMOS said we would not be lacking in the will to push it forward, however.

Asked if there were going to be any papers with our views, in addition to the Prime Minister’s speech, the PMOS said it was something we had to reflect on.

Asked when the first "big" meeting would be, the PMOS said he thought the European Parliament was regarded by some as a "big" meeting!

Asked what "themes" could be considered for the Council meeting on Thursday, the PMOS said that firstly, Europe did need to change, and secondly, that we needed to reconnect the political leadership in Europe with the view of the people. The PMOS said the Prime Minister had indicated that he wanted to push forward prospects for a financial deal. The Prime Minister would also take on the idea that there was a zero sum game between the idea of a social Europe and a market Europe. The Prime Minister would argue that what we needed was an effective Europe in which social protection boosted economic performance, rather than hindered it. The Prime Minister’s aim would be to recognise that there were some sections of Europe that did have concerns about what they thought was our own approach, but to argue that those concerns were actually a caricature of what our approach actually was. The PMOS said that in this country, there was the minimum wage, extended maternity and paternity leave, but what we had to address in Europe were some of the rigidities which stopped the market from operating properly.

Put to him that our approach to the Working Time Directive had split some of our European colleagues, the PMOS said that equally, our stance had helped boost employment in this country. The fact was that the employment rate in this country was better than in some other countries.

Put to him that it therefore suggested "New Labour, New Europe", the PMOS said that people recognised it was a welcome fact that different countries had different approaches according to their circumstances. The important thing was the balance between the social and the market, and the Prime Minister believed that balance could be achieved.

Asked what happened to the idea of a "special summit", the PMOS said there were lots of ideas floating around, and there were genuine legitimate questions about how we took forward the debate, but it would be better for people to wait and see.

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Original PMOS briefings are © Crown Copyright. Crown Copyright material is reproduced with the permission of the Controller of HMSO and the Queen's Printer for Scotland. Click-use licence number C02W0004089. Material is reproduced from the original 10 Downing Street source, but may not be the most up-to-date version of the briefings, which might be revised at the original source. Users should check with the original source in case of revisions. Comments are © Copyright contributors. Everything else is © Copyright Downing Street Says.

» Monday, June 20, 2005

EU Finance

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