UK Prime Minister Tony Blair rejected a long-term freeze on Britain's widely attacked rebate from European Union coffers today ahead of showdown budget talks with French President Jacques Chirac in Paris.
Luxembourg Prime Minister Jean-Claude Juncker, trying to broker a deal in time for an EU summit this week, spelled out at a meeting with Mr Blair that he proposed pegging the rebate at its pre-enlargement level of €4.6 billion a year in the 2007-2013 budget.
"What the presidency are proposing is a freeze of the rebate," Mr Blair's spokesman told reporters on a plane to Paris after the British leader met Mr Juncker in Luxembourg. "That is not acceptable to us."
A freeze would cost Britain between €25 and €30 billion over seven years and still leave it paying one-third more than France net into Brussels coffers, he said.
The European Commission calculates the British rebate will soar to some €8 billion a year by 2013 if the mechanism negotiated by Margaret Thatcher in 1984 were perpetuated.
The total EU budget is €106.3 billion this year and the British get €5.1 billion back, chiefly because they receive relatively little in farm subsidies and regional aid.
London is isolated in the 25-nation bloc in clinging to its refund, nearly 10 percent of which is now paid by the poorest EU members from eastern Europe which joined last year.
Mr Blair has signalled he might compromise but only if France gives ground on the substantial EU farm subsidies it receives.
Mr Chirac has refused, saying the Common Agricultural Policy (CAP) budget was settled in 2002.
"We have continued to argue that there has to be a wider review (of EU spending)," the British leader's spokesman said.
"We believe that the current budget is distorted by the CAP."
Prospects for a deal seem dim. Mr Blair stood his ground in talks in Berlin with German Chancellor Gerhard Schroeder, who has joined Mr Chirac in pressing Britain to give up the rebate. Mr Schroeder demanded his European partners abandon "national egotism" for a "fair compromise".