Haggling blocks early EU enlargement deal

The European Union's hopes of wrapping up eastward enlargement negotiations before a landmark summit next week ended yesterday…

The European Union's hopes of wrapping up eastward enlargement negotiations before a landmark summit next week ended yesterday when Germany resisted the proposed costs while poor candidates pressed for more money.

Eager to prevent haggling over milk quotas tarnishing a celebration of the end of Europe's Cold War divisions, Danish Prime Minister Mr Anders Fogh Rasmussen had aimed to conclude talks with 10 mainly East European aspirants early next week.

Instead, both Europe's main paymaster, Germany, and the major ex-communist candidates said they expected a fight to the finish over cash at a summit in Copenhagen on December 12th-13th.

German Chancellor Gerhard Schröder said after talks with Mr Rasmussen in Berlin: "I recognise the efforts by Denmark to put together this financial package. But it does not live up to our expectations." Denmark holds the EU's rotating presidency.

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Mr Schröder said he did not expect EU and candidate foreign ministers to clinch a deal when they meet next Monday and Tuesday in Brussels. A final financial package would only emerge at the Copenhagen summit, he said.

Hungarian chief negotiator Mr Endre Juhasz said the foreign ministers' meeting might as well not be held at all.

Cyprus, the wealthiest candidate, is the only one to have tied up negotiations so far. Poland, Lithuania and the Czech Republic all asked the bloc on Monday to improve its cash offer.

Slovakia, Hungary and Latvia took a similar line yesterday.

"We are still not satisfied with the proposal on direct payments (to farmers), both the duration of the phase-in period and their initial level," chief Slovak negotiator Mr Jan Figel said.

He said the summit might have to discuss income support levels for farmers, budget rebates to the new member-states and possibly milk production quotas - an EU diplomat's nightmare.

Germany and the candidates also contested the figures put forward by Denmark.

The EU is offering candidates €23 billion in aid for poor regions between 2004 and 2006, and phasing in, over a decade, the bloc's income support to farmers from the level of 25 per cent of the amount now received in the EU.

The whole package is worth nearly €40 billion in 2004-2006. However, candidates will be expected to pay hefty membership dues from their entry on May 1st, 2004, which they complain will put their public finances under heavy strain.