Merkel proposes raising EU budget in bid to clinch deal

16th December 2005, Comments 0 comments

16 December 2005, BRUSSELS - German Chancellor Angela Merkel on Friday proposed increasing European Union spending in a last-ditch bid to clinch an agreement on a 1 trillion dollar budget for the bloc, diplomats said.

16 December 2005

BRUSSELS - German Chancellor Angela Merkel on Friday proposed increasing European Union spending in a last-ditch bid to clinch an agreement on a 1 trillion dollar budget for the bloc, diplomats said.

Under the German proposal, the E.U. budget for the period 2007 to 2013 would rise to 862.5 billion euros (1.035 trillion dollars) instead of the 849.3 billion euros proposed in a blueprint unveiled this week by British Prime Minister Tony Blair whose country holds the rotating E.U. presidency.

The move by Merkel - who is attending her first E.U. summit - came as a surprise following her earlier vows Germany could not pay more to the 25-nation bloc.

Berlin is the E.U.'s biggest paymaster contributing 20 per cent of the union's overall budget.

The move raised hopes the two-day summit might clinch the crucial budget accord.

"I am rather confident that we will reach a deal," said Luxembourg's Prime Minister Jean-Claude Juncker.

Blair's chief spokesman, Tom Kelly, was also cautiously upbeat.

"People are serious about getting a deal at this summit," said Kelly, adding: "(There) has been some progress since this morning."

So far talks have been deadlocked over Britain's demand it keep its annual 5 billion euro E.U. rebate and France's refusal to consider giving up any of its 10 billion euro annual farm subsidies from Brussels before 2014.

Blair's initial proposal was criticized by France and new E.U. member states from Central Europe for cutting aid to the poorest states in the bloc.

There have been calls for London to give up its rebate to fund revamping of the economy, infrastructure and environment in Central Europe.

"We are prepared to pay our fair share of enlargement but we have to recognise the budget is tight and our room for manoeuvre is tight," said Kelly.

E.U. leaders have been locked in tense negotiations since Thursday with talks having so far yielded little progress.

Blair met separately with Chancellor Merkel and French President Jacques Chirac to lay foundations for a compromise on the E.U.'s 2007 to 2013 budget.

"If France, Germany, the U.K. are able to reach consensus it makes it much easier for the others to come in behind," said British Foreign Secretary Jack Straw in comments to BBC radio.

With Merkel attending her first full E.U. summit, there was hope that she might emerge as a peacemaker between traditional bitter rivals Blair and Chirac as well as the new Central European member states and old members.

Leaders began talks earlier Friday downbeat over the prospects for success.

"It's a 50:50 chance," said Swedish Prime Minister Goran Persson.

Merkel described the talks as "very, very difficult ... I am not sure there will be an agreement".

There have been concerns that a breakdown of the E.U. budget talks would bring to an end an already disastrous year for the bloc which has underscored growing tensions in the enlarged 25-nation E.U.

Voters in France and the Netherlands torpedoed the E.U. constitution earlier this year. This was followed by the failure of leaders to agree on the budget at an acrimonious June summit.

In other business, E.U. leaders were issuing a tough statement condemning the Iranian president's recent denial of the Holocaust and calls for Israel to be moved to Europe.

"These comments are wholly unacceptable and have no place in civilised political debate," the E.U. leaders declared in a declaration.

The leaders also warned Tehran that time was running out for a diplomatic deal on Iran's nuclear programme, saying that "the window of opportunity will not remain open indefinitely".

Turning to Iraq's elections, the E.U. leaders congratulated Iraqis for taking "a further step towards democracy and stability."

The summit condemned "terrorist atrocities" while expressing concern over human rights violations in Iraq which it said needed to be addressed "urgently and transparently" by Iraqi authorities.

The summit is also expected to approve granting E.U. membership candidate status to Macedonia, albeit with certain strings attached. This could drive the E.U. deep into the troubled southern Balkans region.


Subject: German news

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