France, Italy and Spain would co-fund EU rebates

France, Italy and Spain would pay most for European Union budget rebates to Britain, Germany, the Netherlands and Sweden under proposals to be adopted by the European Commission on Wednesday.
According to a document obtained by Reuters, the French would make the biggest contribution of more than 1 billion euros a year to a partial refund for all the biggest net payers that would replace Britain's exclusive EU budget rebate after 2007.
London insists its annual 4.6 billion euro cheque from Brussels, won by Prime Minister Margaret Thatcher in 1984, remains justified even though it is now the second richest EU country per capita.
Although the enlarged 25-nation bloc's spending priorities are shifting from farm subsidies to aid for poorer east European regions, agriculture still swallows more than 40 percent.
The figures to be put forward by EU Budget Commissioner Michaele Schreyer will launch a year-long battle over money that is likely to pit Britain against its partners, especially France.
Member states have the last word with each having a national veto over the resources to fund the EU budget.
"There are about 20 delegations hostile to this mechanism," a French diplomat said. "The only solution is to scrap the British cheque and control spending."
Britain argues its refund is still legitimate because the budget remains distorted by massive agricultural spending, of which France is the main beneficiary, and by regional aid of which it receives little.
British diplomats acknowledge privately that a general rebate system for all big net contributors, of the kind that Schreyer is proposing, could be hard to resist.
Politically, the battle could hardly come at a worse time for British Prime Minister Tony Blair as he prepares for a likely general election next May or June, and a referendum on the EU constitution probably in 2006.
But EU diplomats say Blair won no friends by blocking the Franco-German choice of Belgian Prime Minister Guy Verhofstadt for European Commission president last month and those countries are waiting to take their revenge over the rebate.
Under the latest version of her plan, Britain would still receive the largest rebate with 2.123 billion euros a year. Germany would get 1.137 billion, the Netherlands 352 million and Sweden 78 million.
France would pay an extra 1.072 billion euros to finance rebates, Italy 888 million, Spain 530 million, Belgium 184 million and even relatively poor Poland would pay 141 million.
Britain and the other net payers agree Brussels should be looking to curb spending instead of proposing a 40 percent increase to 1 trillion euros in the next seven-year budget - chiefly to fund the cost of this year's eastward expansion.