Cautious comments deter budget deal hopes

 

The EU powers have embarked on gruelling budget talks as a succession of downbeat remarks from political leaders cast doubt over the prospects for a deal this weekend.

The talks, which threaten Ireland’s €1.7 billion share of the annual agriculture budget, come amid antagonism among many leaders at the hardline stance adopted by British prime minister David Cameron.

Tánaiste Eamon Gilmore noted “significant differences” in the opening phase of the negotiation, but said it was imperative not to have “another episode of Europe can’t agree” at the summit.

The talks were not expected to begin in earnest until midnight last night, with further rounds expected to go on into the early hours tonight and possibly into the weekend.

With a new compromise draft budget expected late last night, Mr Gilmore noted that the financial plan produced last week by European Council president Herman Van Rompuy would erode the agriculture budget by 6.5 per cent on top of a 9 per cent cut mooted by the European Commission.

“We have made common cause with France in relation to the Common Agriculture Policy in particular and the compact on jobs and growth,” the Tánaiste said.

French president François Hollande said the summit must preserve the CAP. “I am not here to lay down ultimatums, I am here to seek a good compromise. This budget must be brought under control but must also give priority to growth.”

CAP proposal

Mr Van Rompuy was expected to cut his proposed €25 billion reduction for the CAP budget and to cut his proposed reduction for cohesion spending. The scale of these measures remained unclear before the compromise was tabled.

However, he was widely expected to return money to the agriculture and cohesion budget by taking from the transport and energy infrastructure initiative. He was also expected to deepen planned cuts to the commission’s original proposal for the EU’s administrative budget.

In spite of some optimism in the run-up to the summit that a deal might yet be salvaged, German chancellor Angela Merkel suggested it might not be possible to avert failure.

“It is important that we arrive at a solution,” she said. “Whether that can happen now in these two days, Thursday and Friday, I don’t know. Germany wants to reach the goal but it may be that we need a further stage.” Dutch prime minister Mark Rutte was similarly cautious. “I’m not sure we’ll succeed in one go. It’s very complex. I have been in touch with several colleagues over the past days and only had one message,” he said. “If it doesn’t happen at once, we have to avoid worsening the atmosphere by so much that we need months to restore personal relations.”

Mr Cameron, who is pressing for an expenditure freeze and deep cuts to the EU administration budget, showed no sign of compromise.

“We are going to be negotiating very hard for a good deal for Britain’s taxpayers and for Europe’s taxpayers and to keep the British rebate,” he said.

Threat of veto

His threat to wield his veto – although it was copied by some of his counterparts – led to frustration and veiled criticism from other leaders.

“I can’t imagine how we can convince them, but they will have to be convinced,” Jean-Claude Juncker of Luxembourg said.

Belgian prime minister Elio di Rupo was also critical of Mr Cameron’s stance. “It’s a shame that for the British, Europe is primarily a single market,” he said. “For me, for Belgium, Europe is more solidarity and prosperity for all Europeans, so I will plead with somebody such as David Cameron for a more ambitious budget.”