Germany casts some doubts on summit deal

Germany attempted yesterday to reassure its EU partners that it would stand by the Agenda 2000 reform package after the Deputy Foreign Minister, Mr Gunther Verheugen, appeared to cast doubt on the deal agreed at last week's Berlin summit.

In an interview to be published tomorrow, the weekly magazine Stern quoted the minister as saying that the agriculture package agreed last week, along with Britain's budget rebate, would have to be renegotiated before the end of the current budget period in 2006.

In a radio interview yesterday afternoon, Mr Verheugen claimed that he had been misquoted and insisted that Germany would stand by the agreement hammered out in Berlin.

"There is no question of making improvements. The package remains as it is," he said.

In a statement issued last night, Stern denied that it had misquoted the minister and claimed that he had personally authorised the interview.

Despite his insistence that the Agenda 2000 package remained intact, Mr Verheugen acknowledged yesterday that the agriculture reforms could be overtaken by events such as international trade agreements and market developments.

"The original agriculture compromise agreed by the agriculture ministers looked different. France would not agree to that and what emerged in Berlin is an agreement on the lowest common denominator. That's why experts believe we will have to look at farm policy again - in four or five years perhaps, but certainly before 2006," he said.

Opposition politicians criticised last week's deal as too modest in its reforms and too generous to France and the southern countries at Germany's expense.

The Chancellor, Mr Gerhard Schroder, insisted after the summit that the deal would lead to a reduction in Germany's EU budget contribution but he was unable to say by how much.

German farmers' leaders yesterday repeated their call for a renegotiation of the agriculture package, which they claim will put thousands of farms out of business.

The Christian Democrats' European Affairs spokesman, Mr Peter Hintze, yesterday demanded to know why, if Mr Verheugen thought the Agenda 2000 package could be improved upon, he did not do so in Berlin last week.

"It is quite astonishing that the federal government is now letting us know through Stern that Agenda 2000 is not fit for the future," he said.

Volkswagen is planning a cheaper model of its new Beetle for Germany, which has shown scant interest in the car compared to its success in the US.