BRITAIN: Britain yesterday maintained a firm defence of its €4.5 billion a year rebate on its EU budget contributions, refusing to negotiate over the abatement "unless and until" a rebalancing of EU spending took place.
As prime minister Tony Blair and his senior cabinet allies last night finalised the UK's negotiating position ahead of today's EU heads of government summit, the government reasserted its determination to veto a deal on the future financing of the EU to protect the rebate.
"The only way to resolve the current inequity in contributions between the EU's members is not through removing the UK's rebate - nor would we accept that - but instead through a fundamental review of EU expenditure," foreign secretary Jack Straw told the House of Commons. "Until and unless such a rebalancing of spending takes place, the UK's rebate remains fully justified, and we will if necessary use our veto to protect it."
Speaking at Prime Minister's Questions in the Commons, Mr Blair called for a "pause for reflection" to consider the right way forward for Europe following the No votes to the constitutional treaty.
He made clear that any plans for a British referendum on the constitution would remain on hold until a collective decision on the way forward was reached by the European Council.
Mr Blair said: "What I think is important to realise is that, as a result of the way we have approached it, I think there is a clear understanding now in Europe that there needs to be a far more fundamental debate about the future of Europe.
"The important thing, at this moment in time, is for us to sit down and think in Europe about how we make sure Europe is more relevant to the concerns of people in the early 21st century."
His comments were echoed by Mr Straw, who told the Commons in a statement that there was an "emerging consensus" in Europe that the decision on whether or not to proceed with ratification of the constitutional treaty should be left to individual member-states.
Mr Straw said that the UK's call for "budget discipline" and a 1 per cent of gross domestic product cap on the budget had shifted the centre of gravity of the debate.
But the foreign secretary rejected a compromise solution of 1.09 per cent put forward by Luxembourg as "a significant advance on the Commission proposal, but still not good enough".
Luxembourg would dearly love a budget deal this week to lift the gloom following the No votes in France and the Netherlands.