We are wasting time talking about secondary issues without tackling the real problem, one EU ambassador complained. Another senior diplomat said ministers might as well exchange statements by letter and save the plane fare to Brussels since there was to be no negotiation. Talks broke down in acrimony last June when Britain blocked a compromise by refusing to accept any curb on its annual rebate from EU coffers unless it won a promise of future cuts in generous farm subsidies that benefit France most.
Any chance of agreement at the Dec. 15-16 summit hinges on Prime Minister Tony Blairs willingness to give up part of the rebate, worth 5.1 billion euros ($5.96 billion) last year, but some diplomats question whether he is domestically strong enough to do so.
France has shown no willingness to give an inch on farm payments, standing by a 2002 agreement which pegged agricultural spending at current levels until 2013. In a tough speech to the European Parliament last week, Straw said it would be very hard to get a deal unless there were significant changes in the 871 billion euro package proposed by Luxembourg, which others see as the basis for a solution. He also sought to play down the urgency, saying last time around, agreement had only been reached at the March summit before the start of the new budget period.Diplomats said he would hammer home the same message to ministers, making clear that just because it held the revolving presidency did not mean London would drop its national interest.
European Commission President Jose Manuel Barroso warned last week that another failure to agree on the budget would plunge the EU into a real crisis. The nightmare scenario gaining ground in Brussels is that there could be no long-term budget at all, sending the EU back to the pre-1992 system of annual budgets.