Germany stuck in the middle on EU budget

13th December 2005, Comments 0 comments

BERLIN, Dec 13 (AFP) - Angela Merkel's EU summit bow as German chancellor will likely prove a double test, analysts said Tuesday, with traditional ally France expecting her to defend its position but Britain looking for signs of cooperation also.

BERLIN, Dec 13 (AFP) - Angela Merkel's EU summit bow as German chancellor will likely prove a double test, analysts said Tuesday, with traditional ally France expecting her to defend its position but Britain looking for signs of cooperation also.

They said that with Europe desperately looking for a way out of a budget stalemate that is threatening the continent's future development, Merkel could play a key role in Brussels at the summit on Thursday and Friday.

While Britain and France have been exchanging sharp words, Merkel and her Foreign Minister Frank-Walter Steinmeier have tried to sound a conciliatory note on the budget issue since being sworn in just three weeks ago.

After meeting French President Jacques Chirac last week, Merkel said she did not want to single out specific elements of the British budget proposals for criticism and urged member states "to use every opportunity" to reach an accord.

"When one is preparing for negotiations it is often better not to single out specific details and not to assume a definitive stance," she said.

She also called on the British government to revise its proposals, saying the first draft contained "many rough patches throughout".

After meeting with British Prime Minister Tony Blair in London last month, Merkel refused to be drawn about whether she would back Britain or France in the budget spat, stressing instead the need to have "good friendly relations" with both countries.

But she has little room for manoeuvre.

She cannot back repeated British calls for the EU's agricultural policy to be overhauled as a condition of a new budget deal, because doing so would severely strain the so-called Franco-German motor at the heart of the bloc.

Under chancellor Gerhard Schroeder, Germany stood firm alongside France on the issue, and Merkel also maintains that the Common Agricultural Policy should remain exactly as it was agreed in 2002.

Under the British proposal, overall EU spending between 2007 and 2013 would be cut to 1.03 percent of the 25-member group's gross national income, equivalent to an estimated EUR 846.8 billion

Britain would forgo eight billion euros over seven years of its cherished annual budget rebate, but most of the savings would come from a seven to eight percent cut in planned funds for new member states.

In many ways, Germany would welcome a reduced budget for the 2007-2013 period.

Its own yawning budget deficit makes it hard for Germany to increase its contributions to the EU pot and Finance Minister Peer Steinbrueck has even called for reduced contributions.

European Commission President José Manuel Barroso meanwhile has appealed to Germany to play the role of go-between.

"Europe has always advanced when Germany has adopted the role of mediator," Barroso wrote in Bild am Sonntag newspaper on Sunday.

But Martin Koopmann, a researcher at the German Council on Foreign Relations (DGAP) think tank, said he did not expect Germany to weigh in to force an agreement at the risk of causing divisions.

"The Germans will remain very defensive," he said. "Intervening immediately would damage the German position."

Some observers hope, however, that Merkel can achieve a coup in helping to negotiate an accord.

The Berliner Zeitung newspaper said in an editorial on Monday that "only Berlin can bring the EU out of the bottleneck that it has been plunged into by the selfish positions of Britain and France".

Copyright AFP

Subject: French news

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