Downing Street Says » EU Budget

Asked if the Foreign Secretary would be saying anything on the budget proposals at the Foreign Affairs Select Committe, the Prime Minister’s Official Spokesman (PMOS) said not on any new proposals. They would come tomorrow. The Foreign Secretary would be able to talk to the Select Committee about our approach in general, which he was happy to do. Asked when the next proposal would be presented, the PMOS said we were aiming to publish it on Wednesday.

Asked if putting forward proposals on the eve of talks was a tactic or a sign that things were going wrong, the PMOS said it was neither. It was a reflection of what was normal practice for negotiations of this sort. It was in line entirely with how the EU had approached these matters in the past. The presidency in Luxemburg’s case had six negotiating boxes. If we had two that was an indication of the reverse of what was suggested. It remained the case that nobody was going to think that this was their ideal deal. But what we hoped was that people would recognise that it was the only realistic deal that could be on offer now. In terms of the accession countries it was important that they got access to their money now not at some theoretical point down the line.

Asked to spell out the view of the Prime Minister if a deal was not achieved, the PMOS said the reality was that if a deal was not achieved the people who had immediate problems were the accession countries because they did not have the stability and the certainty with which to plan their budgets. It was also because of Austria’s position on the Common Agricultural Policy (CAP) unlikely that there would be deals under the Austrian or Finnish presidency. That would mean that the matter would fall back on the European Parliament, and because of the way that they would have to roll over the deal the accession countries would get considerably less money. It was, for them, a very real though difficult choice between on the one hand accepting that six countries had opposed the money theoretically offered under the Luxemburg proposals and accepting less money on the table with this deal but getting that money now which would still result in substantial increases in the money they recieved.

Asked to characterise Austria’s position on CAP and whether he could point to any country other than Britain which may or may not believe that the deal struck in 2002 was a bad deal and who thought it was the correct course of action to open that deal up now, the PMOS said, as the Prime Minister had on Friday, that we should remember why we reached the agreement in 2002. If we had not, enlargement would not have been possible. Austria along with Ireland and France had all signed a letter in which they opposed reform of the CAP at this point. Our ideal position would be to get the CAP reformed now but we recognised that because of such positions it was not possible now. Therefore the important issue for us at this summit was to get a commitment to a meaningful commission lead mid-term review of the budget as a whole.

This would allow for changes during this budget period. That was the important thing. In terms of building momentum for that the question people had to ask themselves was whether you held out for CAP reform now in the almost certain knowledge that there were 10-12 countries who opposed that or did you keep building momentum for change by agreeing a mid-term review and also having the support of the accession countries in pushing for change. In other words you do what was necessary now for a deal to make sure the accession countries were in a position where they got the money to develop themselves but also to help maintain the pressure for change.

Put to him that the reason the Prime Minister was saying there would be no deal under the Austrian or Finnish presidencies was because the Prime Minister would veto it if it did not contain any reform of CAP, the PMOS said we had said that about this deal. We needed a firm commitment to a mid-term review. If there were not a firm commitment then there would not be a deal. We had said that explicitly. Asked if mid-term review meant changes before 2013, the PMOS said that it had to allow for the possibility of change in the budget as a whole. That was the whole point of having a review. Put to him that allowing for the possibility was as loose a term as you could get, the PMOS said the commitment to review would need to be a "firm" commitment to review.

Put to him that a review was just a way to kick it into the long grass, the PMOS said it was not. You could choose to stand on the sidelines and shout for CAP reform or you could do something about it. A review would be meaningful and would allow you to do something about it. You had to bring other people with you but the review was precisely a mechanism to bring about change and not keep the status quo. Put to him that we had had a three-year pension review and look what had happened to that, the PMOS said that there would be meaningful change in the spring in that area too.

Asked to clarify whether he was saying that a review would allow for the possibility for change before 2013, the PMOS said yes, a meaningful review could not be shackled by saying there could not be change. A meaningful review had to contain the possibility of change. Asked what year the budget and CAP would be subject to change, the PMOS said that we had said we were prepared to put the rebate on the table, but only in the context of fundamental change in the CAP. That worked both ways. In answer to further questions the PMOS said that what people should not do was shackle a review by saying now that it could not recommend certain things. A proper review had to look fully at the structure of the EU budget, make recommendations and allow for the possibility of change. You could not dictate what the outcome of a review would be but equally you could not say things would not change. That said we should all wait for the final outcome of the deal. He was simply outlining the clear parameters within which we would judge it.

Asked what the British Government’s attitude was to the proposals in Prime Minister Verhofstadt’s new book that the Euro zone members should meet for a political summit, the PMOS said so far we had only seen that as speculation.

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» Tuesday, December 13, 2005

EU Budget

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