European Union president Britain is set to propose significant cuts in the bloc's 2007-2013 draft to try to resolve a dispute over the country's rebate to Brussels coffers, diplomats said today.
For Britain, the proposal will be meant to secure a deal on the long-term budget at an EU summit in mid-December, but some diplomats said it could achieve the opposite.
London is expected to suggest slashing the budget to some €846 billion from the €871 billion proposed by previous EU president Luxembourg, mainly by lowering by 10 per cent regional aid to the bloc's 10 mostly east European newcomers.
"London is likely to propose cutting the budget. Cuts will involve regional funds for new member states and rural development funds for some old member states," an official from the executive European Commission said, asking not be named.
"We are not going to comment on particular speculation about what one aspect of those proposals might be," said a British official attending a Euro-Mediterranean summit with British Prime Minister Tony Blair.
However, an EU official said such a proposal would be widely seen as Britain taking the axe to the poorest newcomers, which have been its close political allies, to save its own rebate, worth an estimated €5.6 billion this year.
The EU diplomat said Britain planned to sweeten its proposal for newcomers but propose technical measures that would make it easier for them to absorb EU aid, which is notoriously difficult to receive.
Budget negotiations collapsed in acrimony at a June summit after Britain refused to accept any curb on its annual rebate from Brussels coffers unless it won a pledge of future cuts in farm subsidies which benefit France most.
Mr Blair is due to meet seven central and east European leaders on a trip to Estonia and Hungary on Thursday and Friday to discuss the budget.