Moves to row back on British EU rebate stirs eurosceptic ire

London Briefing: British europhiles are in despair. The EU is fast becoming an idea with similar attributes to socialism: a beautiful concept, attractive to visionaries, appealing to the better side of human nature, but with no ability whatsoever to demonstrate any practical success, writes Chris Johns.

The dwindling band of people who hope that Tony Blair can succeed in his ambition to win the British people around to the European constitution now have to contend with another exquisite piece of Brussels timing, another well directed bullet to the foot.

The EU Commission has decided that Britain's budget rebate is to be much reduced or even withdrawn altogether.

Two decades ago at the Fontainebleau Summit, Ms Thatcher famously asked for, and got, her money back.

Britain successfully argued that, with the bulk of EU expenditure going on agricultural subsidies, it was unfair for countries that did not benefit very much from the CAP to contribute very much to it.

The rebate has assuaged much British angst about the EU: while the outrageous CAP is a festering sore, eurosceptics couldn't argue that we are being ripped off. If Europe wanted to subsidise its inefficient farmers and contribute to Third World poverty that was largely its own affair.

But, if the latest draft proposals - already described as dead in the water by the British government - from the Commission are anything to go by, other countries now want Britain to contribute much more.

In the fantasy world of Brussels accounting, Britain is now the second wealthiest country in the EU - readers of all those rather triumphalist articles about how Ireland has overtaken Britain in terms of per capita income might be a touch mystified.

But the logic of the EU's calculations means that Britain must now contribute much more, per capita, than any of the other big (and most small) countries. Just how Brussels imagines that Mr Blair could sell this to the British people is beyond comprehension.

Conspiracy theorists will have a field day: our eurosceptic press has just been handed a topic that will launch a thousand headlines. The Sun once declared "Up Yours Delors". Its remarks about the new head of the Commission, if they can remember his name, will make that comment look polite.

It almost looks as if someone in Europe wants to add fuel to the eurosceptic fire.

The money at stake is not trivial and the issues are not merely symbolic. The rebate currently stands at €4 billion and is set to grow, on Commission numbers, to something in excess of €7 billion.

Understandably perhaps, Brussels wants to get its hands on this cash as it represents a sizeable chunk of the €100 billion overall budget.

Mr Blair's friends in the "New Europe" have been extremely slow to rush to his aid and declare that Britain should keep its money.

If Britain is to lose its cash then somebody else will get it. In the enlarged Europe of 25 it still seems that it is every man for himself when it comes to the budget and Mr Blair's erstwhile allies in the recent constitutional negotiations have been quick to desert him as soon as a whiff of cash presents itself.

British officials, not least our two Commissioners, have been quick to rubbish the draft proposals. But the cat is now out of the bag.

If Mr Blair was hoping that European leaders were going to help him to persuade Britain to love Europe he must be a sorely disappointed man. Mr Gordon Brown is likely to be incandescent given the fiscal implications for the years ahead.

Mr Blair is going to have to do some serious talking with his European counterparts. He must ask them for help unless they want a serious constitutional crisis when Britain votes No in the forthcoming referendum.

It could well be the case that others in Europe have already decided that Britain is a lost cause, in which case it would be better to confront a British rejection sooner or later.

European leaders should not underestimate the current mood of the British electorate: the recent success of the UK Independence Party, committed to EU withdrawal, is unlikely to prove a flash in the pan if they keep being handed potent weapons of membership destruction.

If cock-up rather than conspiracy is the most likely explanation of the Commission's budget proposals, we must conclude, at the very least, that the naivety of the denizens of Brussels is breathtaking. If there is anybody left in Europe who wants Britain to be part of what happens they need to make their voices heard.