British Foreign Secretary Jack Straw reiterated Sunday that London would not give up its EU budget rebate and that Britain is ready to use its veto to defend its interests. He also underlined that the European Union needed to rethink its budget-consuming farm subsidy system, from which France benefits the most.
"The prime minister (Tony Blair), the chancellor (Gordon Brown) and I have made it clear that we are ready to use our veto if necessary," Straw said as he arrived in Luxembourg for talks with EU foreign ministers.
"If we abandoned our rebate, which we are not going to do, none of Europe's fundamental problems would be solved."
Straw's remarks came as the EU battles to resolve its twin crises of reaching an agreement on the bloc's 2007-2013 budget and on whether to continue to the badly-damaged process of ratifying its new constitution.
Britain has come under increasing pressure to give up its rebate but says it would only contemplate re-examining the issue if the Common Agricultural Policy (CAP), which consumes more than 40 percent of the budget, is also changed.
The rebate is aimed at compensating Britain because it receives so little back in EU subsidies for its contributions, but part of its tab is being picked up by the new member states.
"The rebate is not the issue, the rebate is simply a symptom of a much bigger problem, namely the structure of this budget," Straw told reporters.
When asked whether France should be flexible on the CAP, the long-term budget for which was sealed in 2002, Straw said: "Everybody needs to think very carefully about the future financial framework for Europe."
"Of course its time to have a look at farm subsidies again."
Luxembourg, which currently holds the EU's rotating presidency, has been a virtual revolving door for leaders in recent days as they try to thrash out an agreement, but few visible signs of compromise have emerged. The foreign ministers are hoping to "clear the decks" of problems ahead of a crunch summit in Brussels starting on Thursday.
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