Compromise possible in EU budget talks - diplomats

Poorer European Union newcomers may agree to a reduction in the aid they receive from the bloc's coffers but not to as big a …

Poorer European Union newcomers may agree to a reduction in the aid they receive from the bloc's coffers but not to as big a cut as current EU president Britain has proposed, diplomats said today.

Leaders of the four biggest newcomers - Poland, the Czech Republic, Hungary and Slovakia - are meeting British Prime Minister Tony Blair in Budapest today for talks on the long-term budget, due to be approved in mid-December.

Diplomats say Britain has proposed a cut in EU aid to the 10 new members in the 2007-13 period of 10 per cent, about 16 billion euros ($18.85 billion), as a way of reducing contributions by the bloc's biggest paymasters, led by Germany.

New members, mostly ex-communist nations in central and eastern Europe, reacted with alarm to the plan, saying it would threaten their ability to modernise their infrastructure and catching up with the richer West.

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But some diplomats from the new member states said they could agree to a compromise if Britain were to scale back the planned cuts. "I think that Britain might agree on around five per cent (cut in cohesion funds)," a senior official taking part in the Budapest meeting said.

Hungarian Prime Minister Ferenc Gyurcsany, who met Mr Blair today evening, also saw room for a compromise but told Blair the four big newcomers, often called the Visegrad Four, would reject a 10 per cent cut, a Hungarian official said.

"Gyurcsany...explained that this would not be acceptable for the Visegrad Four, but it doesn't mean that the Visegrad Four and Gyurcsany would not be striving for a compromise," the official told Reuters.

Mr Blair received a similar message on Thursday when he met leaders of the Baltic nations in Tallin, diplomats said.