Germany demands end toBritish EU rebate, seeks own

3rd June 2005, Comments 0 comments

3 June 2005, BERLIN - A senior German official on Friday demanded an end to Britain's multi-billion euro European Union rebate but at the same time called for creating a new rebate system to benefit Sweden, the Netherlands and Germany.

3 June 2005

BERLIN - A senior German official on Friday demanded an end to Britain's multi-billion euro European Union rebate but at the same time called for creating a new rebate system to benefit Sweden, the Netherlands and Germany.

The official, speaking on condition of anonymity, said pressure had grown on the 25-member European Union (EU) to cut a budget deal for the period 2007 to 2013 after rejection of the bloc's constitution by French and Dutch voters in referendums this week.

Leaders are due to discuss the EU finances and the failed constitution votes at a Brussels summit on 16-17 June.

The official said Britain's annual GBP 3 billion (EUR 4.4 billion) rebate from the EU - agreed in 1984 under British Prime Minister Margaret Thatcher - had to go.

"The 24 members are saying something has to change but the other one is saying: 'What I've got, I've got," said the official.

British prime minister Tony Blair is due to have talks in Berlin on London's rebate on 13 June in the run-up to the summit. Germany pays about EUR 300 to 400 million a year to Britain to subsidise the British rebate, the official said.

At the same time, the official complained that Germany, Sweden and the Netherlands were paying too much to the EU and might have to pay even more under a budget deal through 2013.

Declining to be specific, he said that there were budget "mechanisms" which could keep down payments from the three countries.

The official said that if London showed flexibility on this issue, then Berlin would be prepared to make compromises on an EU funding package.

Germany has in the past insisted it would not pay over 1 percent of the total GDP of all 25 EU members as its EU contribution. Berlin is the EU's biggest paymaster, funding over 20 percent of the Union's total annual budget of just over EUR 100 billion.

Contrary to Chancellor Gerhard Schroeder's demands not to pay over the 1 percent level, the official indicated Berlin might be able to raise this sum slightly - but only if mechanisms were put in place to allow some of the excess funds to flow back to Berlin.

Luxembourg, which holds the rotating EU presidency, is asking for payments at a rate of 1.056 percent of GDP which would add about EUR 10 billion to Germany's contribution for the period 2007 to 2013, said the official.

He declined to say how much over 1 percent Germany would go, adding: "If a compromise is only possible by overshooting slightly the 1 percent level we will have to decide if we want to let it fail."

DPA

Subject: German news

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