Tony Blair will face uncomfortable headlines over the next two weeks as he seeks to negotiate away part of the UK's £3.2bn rebate on its European Union budget contributions. But the prime minister believes his proposal that Britain must pay its fair share of the costs of EU enlargement will also be a test for David Cameron if, as expected, he becomes Conservative leader. In particular, it will reveal whether Mr Cameron is prepared to signal a real change in Tory policy on Europe. Mr Blair's government will today formally spell out its plans to make a concession on the UK's budget rebate: one which will mean that the UK's net contribution to the EU budget will rise from an initially projected €50bn (£38bn) over the period 2007-13, to €59bn. The increase of about €9bn in the UK's net contribution over the period comes about because it has agreed that EU transfers of development money to eastern Europe can be stripped out of the way the UK budget rebate is calculated. Mr Blair believes that Britain's gesture is the correct one, given that EU enlargement is of significant political and economic benefit to the UK.
But the prime minister believes his proposal that Britain must pay its fair share of the costs of EU enlargement will also be a test for David Cameron if, as expected, he becomes Conservative leader.
In particular, it will reveal whether Mr Cameron is prepared to signal a real change in Tory policy on Europe.
Mr Blair's government will today formally spell out its plans to make a concession on the UK's budget rebate: one which will mean that the UK's net contribution to the EU budget will rise from an initially projected €50bn (£38bn) over the period 2007-13, to €59bn.
The increase of about €9bn in the UK's net contribution over the period comes about because it has agreed that EU transfers of development money to eastern Europe can be stripped out of the way the UK budget rebate is calculated.
Mr Blair believes that Britain's gesture is the correct one, given that EU enlargement is of significant political and economic benefit to the UK.
the UK's net contribution to the EU budget will rise from an initially projected €50bn (£38bn) over the period 2007-13, to €59bn.
It's hard to know what this means. The budgetary period 2007-13 is seven years, so €50bn/7 = an average of about €7.3bn per annum.
If the FT is saying this is the net contribution, then it's after the rebate has been deducted. And, since the rebate is equal to 2/3 of the theoretical net contribution (what the UK would pay if there were no rebate), the rebate should be equal to 2(final net contribution). That would mean €7.3bn x 2 = €14.6bn annual rebate. That just can't be right, since the projected rebate is said to be closer to the 7.3 number than the 14.6.
If otoh the FT means the €50bn to be the theoretical contribution before rebate deduction (if no one's following I can always stop), then the rebate would be two-thirds of that ie about €2.4bn a year, which is much too low (the 2005 rebate is currently calculated at €5.1bn, for example).
Another way of looking at it (did I hear a groan?), is that the UK would pay €9bn more over the seven years, or about €1.3bn per annum. That is less than the projected rise in the rebate. In other words, the rebate would still rise, but by less.
Perhaps someone else has the key to understanding this more clearly?
It's still too low compared to current and projected future rebate levels.
I don't even undersstand why they are doing this. The domestic public can easily be sold on a deal that keeps the rebate growing a little bit, because they won't know that it should have grown more. The other countries (i.e. the officials negotiating) won't listen to that parsing of the numbers because they know exactly what's behind the numbers.
So a claim that the UK is "giving up 9bn" makes no sense to me, politically speaking: it does not seem enough to win over the Europeans, but it's a huge chunk of money that will certainly mean "betrayal" in the right wing press. In the long run, we're all dead. John Maynard Keynes
Blair is using bully tactics and spin (with Brown attempting to outdo him), but like so much in the UK presidency, everything is ill-prepared and badly thought-out. But then, when have Blair/Brown ever been really interested in European matters? Is it surprising they don't have their options clearly mapped out?
I'm afraid the entire UK presidency betrays the contempt in which the New Labour leadership holds the EU.
As for the media, they just give us all kinds of numbers that are fed by the pols. The EU should make a real effort to make the budget more transparent. That would oblige pols to be clearer in turn.
