EU leaders yesterday agreed to set a deadline of March 1999 on Agenda 2000, the difficult negotiations over the Union's budget for the period 2000 to 2006. Two preparatory summits, probably in November and February, are likely to be needed to broker a deal.
Although the budget does not come into force until January 2000, its ratification and possible amendment must go through the European Parliament, whose elections in June 1999 make early decisions vital. While the heads of government refused to be drawn directly into the negotiations, each set out their national positions in a process that pitched net contributors like Germany, demanding a rebate, against the poorer countries led by Spain. Yesterday the row was reflected in successful attempts by the Spanish to delete the word "affordability" from the concluding declaration and by unsuccessful German insistence on firming up the wording on a potential rebate. The result was a draw, with the final text reflecting the pre-summit reality. Ireland did however get some slight dilution of the wording on the need for CAP reform.
In his contribution to the debate on Monday the Taoiseach, Mr Ahern, focussed on the continuing Irish "infrastructure deficit", despite the country's success, and the need, therefore, for continuing structural and cohesion funding, and for a smooth transition between Ireland's current eligibility for top funding and status as a rich country.
He told leaders that Ireland "cannot live" with the proposals for CAP reform of beef and milk which affected 71 per cent of agricultural output.
Speaking to journalists later, Mr Ahern conceded that if Ireland got a deal on these issues it could live within the 1.27 per cent ceiling. He said the issue of "regionalisation" - splitting the country up for structural fund eligibility purposes - was not yet resolved and would probably not be decided finally by the Government until early next year. His view, he said, would be determined by whatever formula "does best for the country as a whole. We could go either way."
But he warned that calculations of the benefits of regionalisation should not be based on the 1993 outcome, but the new tighter financial realities of 1999.
The issue has arisen because of a strong campaign in the West, but Commission sources suggest it is unlikely that regionalisation would change Ireland's overall receipts. It might, however, ensure that the Government, which has promised to direct EU spending to the poorer regions, actually did so.
The row about net contributions arises because member-states, like most national taxpayers, do not get out as much as they put in to the system. Although contributions, known as "own resources", are roughly proportional to each country's GDP per capita, that is to their ability to pay, how much they get out depends on their needs and the fact that the EU operates in some areas of policy and not others.
So, countries heavily dependent on agriculture will inevitably benefit from an EU prioritisation of farm spending, just as a taxpayer who has children benefits in the national tax system from education spending. Normally, however, a childless taxpayer does not query his net contribution to the tax system, and for a member-state to do so, countries such as Ireland argue, is to call into question the whole system of mutual solidarity.
By far the biggest net contributor is Germany - £7 billion in 1996 - followed by the Netherlands (£1.6 billion), Britain (£1.4 billion after its special rebate), and then Sweden (£500 million). Ireland is likely to remain a net beneficiary of EU funds until after 2006.
