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Lee, agreed. EU Collapse Progressing as Chirac Implodes
EU in chaos as leaders spurn deal to resolve budget row
London Times, From Philip Webster in Brussels
http://www.timesonline.co.uk/article/0,,13509-1659021,00.html

EUROPE descended into crisis and chaos last night as the Brussels summit called to agree its finances until 2013 collapsed without a deal after Tony Blair rejected a last-ditch compromise. The British Prime Minister and President Chirac of France were each blamed as one of the worst Anglo-French clashes for years erupted into open warfare and made agreement impossible.

M Chirac’s refusal to link Britain’s £3 billion rebate with demands by Mr Blair for a root-and-branch reform of finances, including agricultural spending, soured the atmosphere at a summit that exposed the Union’s problems.

Mr Blair managed to avoid isolation as the budget talks collapsed. When a compromise deal was put before the final session late last night, he was joined by the leaders of Spain, Finland, Sweden and the Netherlands in rejecting it. Denmark and Italy abstained.

The dispute had carried on through the day, with sharp exchanges between the British and French leaders in private meetings, and ended with Mr Blair flatly turning down the compromise engineered by the Luxembourg presidency.

That involved freezing and restructuring the British rebate, which officials said would cut payments to Britain by a third and redistribute the proceeds to richer countries, including France.

Put forward after eight hours of negotiation by Jean-Claude Juncker, the Luxembourg Prime Minister, it was thrown out by Mr Blair because it failed to link Britain’s £3 billion budget rebate and wider reform. It would have involved the loss of about a third of the rebate, British officials said.

Britain and others were angry that Mr Juncker had spent hours attempting to get a deal when it was obvious that the gap was too wide. Some diplomats believed that he was acting on behalf of M Chirac, who wanted to portray Mr Blair as the obstacle to progress.

Recriminations over the failure spilt over into press conferences held by Europe’s leaders in the early hours of this morning.

Mr Blair, asked whether there had been a deliberate attempt to isolate him by the leaders of France and Luxemburg, said: “If there was such an attempt, it failed. We were not alone round that table. I think the people know exactly what the issues are and I don’t think they were fooled by any of the tactics used.”

The Prime Minister, clearly angry at the way the day had proceeded, said that he had been astonished to hear some leaders describing the Common Agricultural Policy as the future of Europe. “I find that quite bizarre,” he said with Jack Straw, the Foreign Secretary, nodding vigorously beside him.

Mr Blair said: “Europe had reached a moment when it had to make fundamental changes and reforms because the ‘no’ votes in the two referendums could not be ignored.” He added that he was prepared to put the British rebate on the table. “I agree it is an anomaly, but it is an anomaly because of an existing anomaly, and that must be dealt with first.”

Mr Juncker was equally irritated, describing himself as ashamed at the outcome. “We were close to an agreement but certain leaders did not have the willto reach an agreement. That makes me sad, especially when I saw that some of the new members were prepared to give up part of their budget to help get a solution. I was ashamed.”

The Luxembourg Prime Minister added that he would pass on the EU presidency to Mr Blair “without advice and without comment”. “My advice is not taken,” he said.

M Chirac said that he deplored Britain’s failure to accept the compromise.

Gerhard Schröder, the German Chancellor, blamed Britain and the Netherlands for the failure. “With the goodwill of everyone, I believe that a deal would have been possible,” he said. “The fact that there wasn’t one is due solely to the completely inflexible stance of the British and the Dutch.”

But British ministers, anxious to avoid blame for the chaos, pointed the finger at M Chirac, whose speech refusing to link the rebate with attempts to cut French agricultural subsidies had, they claimed, scuppered any chance of agreement.

M Chirac then decided to back a freeze on the rebate, which he had said was inadequate, was designed to intensify the pressure on Mr Blair.

The Luxembourg compromise attempted to buy off Britain’s supporters, Italy, the Netherlands and Sweden, all net contributors to the budget. It appeared designed to confront Mr Blair with the choice of accepting the freeze or vetoing it.

It had been expected that Mr Juncker would declare the summit a failure after the morning discussions. Instead he spent hours in meetings with leaders who had backed Mr Blair’s call for a overhaul of the finances.

Leaders were left kicking their heels. Anders Fogh Rasmussen, the Danish Prime Minister, went jogging while Silvio Berlusconi, the Italian Prime Minister, went shopping for antiques.