EU: EU leaders welcomed agreement on a new EU budget yesterday, saying that it would allow the union to move forward after a difficult 12 months.
The 2007-2013 EU budget, which was agreed in the early hours of Saturday, will be worth €862.3 billion and provide €158 billion funding to the 10 new member states.
A breakthrough in the budget negotiations was achieved when British prime minister Tony Blair agreed to surrender a larger portion of his rebate from the EU exchequer and France and Germany proposed raising the size of the budget by €13 billion.
Mr Blair said that Britain would forgo €10.5 billion of its rebate over the seven years of the budget to help pay for enlargement of the EU.
"This is about getting an agreement that allows Europe to move forward," said Mr Blair, who faced strong domestic criticism yesterday over his failure to get a commitment for fundamental reform of the common agricultural policy before 2014.
The agreement introduces a fundamental review of all EU spending and revenue in 2008/9 but member states will have a veto over any possible changes before 2014.
Conservative foreign affairs spokesman William Hague said it was amazing how the government had moved while the French had barely yielded a centimetre in the talks. "Seldom in the course of European negotiations has so much been surrendered for so little," he added.
French president Jacques Chirac, who clashed bitterly with Mr Blair at the last round of failed EU budget talks in June, praised him for his move on the budget rebate.
"Everyone realised it took a lot of courage from Mr Blair. . . in a political situation that was not easy. I wanted to pay homage to him as we all sat around the table and that's what I did." Mr Chirac also highlighted the importance of Franco-German co-operation in the deal.
The new German chancellor Angela Merkel played a crucial role in the budget negotiations, which stretched for almost two days at the European summit in Brussels.
Diplomats and other EU leaders said Ms Merkel acted as a go-between to Mr Chirac and Mr Blair and was also instrumental in persuading Poland to accept a deal after offering it €100 million in extra German aid.
"Merkel played an extraordinarily important role behind the scenes," said Austrian chancellor Wolfgang Schüssel. "She has acted calm, sober and very professional." The new budget is set at 1.045 per cent of EU gross national income, slightly above the first British proposal of 1.03 per cent of gross national income. However, it is still significantly lower than proposals by the European Commission and Parliament.
The president of the parliament, Josep Borrell, has warned that the parliament may veto a budget deal if it deemed it was not adequate. However, it is unlikely that MEPs will want to spark a new crisis for the EU after the last difficult 12 months for the union.
Meanwhile, Mr Chirac said that he would put forward ambitious proposals to change the way the EU worked next year. "Our institutions are today not really adapted to an enlarged and modern Europe," he said.