Europe 'wasting time' in bid to claw back Thatcher rebate

7th September 2010, Comments 0 comments

EU members are "wasting their time" trying to claw back the 'Thatcher rebate' which returns billions of euros annually to London in place of farm payments to France and Germany, a British minister warned on Tuesday.

Asked how he intended to fight off a move by European Union budget commissioner Janusz Lewandowski to slash the rebate, finance minister George Osborne said: "By making it very clear from the very start that we are not going to give way on this at all.

"I have no doubt others will want to put it in the mix, but they are wasting their time," the Conservative finance minister underlined.

"People had better know this at the beginning, because they will know it at the end."

British Treasury figures put its rebate for this calendar year at 3.1 billion pounds (3.7 billion euros or 4.8 billion dollars) and about 26 billion pounds for the 2007-13 budget cycle as a whole.

London claims that "without the rebate, the UK's net contribution as a percentage of national income would be twice as big as France's, and one-and-a-half times bigger than Germany's."

These represent huge sums at a time of deep and unpopular cuts to public services across England, Scotland, Wales and Northern Ireland.

The then prime minister Margaret Thatcher was infamously caricatured as hitting fellow EU leaders of the day over the head with her handbag when she won the argument in 1984.

The EU budget was, and is, run on the basis of a mutual fund rather than on closely measured balancing of amounts contributed and amounts received under various funding programmes.

But Thatcher said that she wanted her money back, making use of an understanding when Britain joined the then European Economic Community that it would be able to re-open calculation of its contributions if they became severely skewed, mainly because of the particular structure of British agriculture.

Her eventually successful campaign was long and caused much bad feeling.

Osborne was keen to play up to that level of rhetoric after talks with counterparts in Brussels focused on new rules for EU supervision of the financial sector.

The issue has returned to the agenda as Brussels seeks to find its own cuts in straitened times, and while Osborne said that "unfortunately we can't veto" the EU budget for 2011, which Britain wants to see slashed heavily, he stressed that his "focus" in negotiations is now on "protecting the fully justified British abatement" for the next decade.

Once 2011's final figures are agreed next month, the EU tackles reforming principles for budgets over a new seven-year cycle running from 2014 to 2020.

© 2010 AFP

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