THE German Finance Minister, Mr Theo Waigel, called yesterday for a reduction in Bonn's annual contribution to the EU and a strict spending limit on next year's EU budget. He said he would start renegotiating Germany's contribution as soon as possible and that he was confident of securing a better deal.

"Germany is the largest economy in the European Union so we can afford a high contribution. But it is not acceptable in the long term that one country bears around two thirds of the net costs", he said.

Less than half of Bonn's annual DM46 billion (£20 billion) payment to the EU returns to Germany in the form of subsidies and its net contribution of DM27.6 billion (£12 billion) in 1994 was more than twice as much as that of the EU's other net contributors put together.

Ireland is one of the biggest beneficiaries of the EU contributions system, receiving £2 billion more than it sends to Brussels. The EU calculates each country's budget contribution on the basis of its gross national product but German politicians complain that the cost of unification and other recent economic difficulties ought to be taken into account.

The present contributions system will remain in force until 1999, by which time Germany would have to pay 30 per cent more than it does today but Mr Waigel is determined to start renegotiating the system as soon as possible.

"We'll start talks at a European level next year on a fairer contributions system so that it is clear, well before the current agreement ends, how the financing of the European Union will be organised in the future," he said.