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Europe

Barroso Urges Compromise on EU Budget

European Commission President Jose Barroso on Sunday called upon Britain to reach a compromise over its controversial European Union budget rebate, ahead of a key EU summit this week.

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Barroso is looking to Britain to budge on its budget rebate

Barroso's comments came as British Finance Minister Gordon Brown again warned that his government would use its veto to reject any proposals "not in the British national interest."

"I hope... a compromise can be found and that the British government will give active contribution for it," Barroso said in a BBC interview.

The annual rebate, currently worth 3.1 billion pounds (4.6 billion euros, $5.7 billion) was set to be a decisive issue at the EU summit in Brussels on Thursday and Friday that would discuss EU spending plans for 2007 to 2013.

EU foreign ministers headed for Luxembourg Sunday for 11th-hour talks aimed at striking a deal on the crisis-hit bloc's budget plans, although hopes of an immediate breakthrough seemed slim.

Weizen mit Kühen, Landwirtschaft, Argrarpolitik

Barley ears in field with cows in background

London originally justified the rebate when it was agreed in 1984 on the grounds that Britain, with a relatively small farming sector, benefited little from the EU's costly Common Agriculture Policy (CAP).

Blair calls for fundamental review

British Prime Minister Tony Blair, who assumes the chair of the rotating EU presidency next month, has refused to give way however, calling instead for a "fundamental review" of EU spending.

Other EU members, including France, Germany, Spain and the Netherlands, want the rebate to be renegotiated to take account of Britain's greater wealth and the needs of new member states in central and eastern Europe.

"I think the British government understands and should understand clearly that conditions have changed," Barroso told the BBC. "We are no longer as we were 20 years ago. Britain is much richer. There are countries now, new EU countries, that are much poorer. It would not be fair for them to support proportionately more of the burden than Britain."

Brown meanwhile told Britain's independent ITV television channel that the rebate "arises from the fundamental unfairness" of CAP.

Gordon Brown

Britain's Chancellor of the Exchequer Gordon Brown

"The idea that the source of problems in the European Union is a rebate that is given to Britain when 40 percent and more of the European Union budget goes to agriculture is completely unacceptable," he said. "You cannot remove a rebate or talk about how the rebate is delivered until you're prepared to talk about how the fundamental reform of the agriculture policy and of the way the budget's constructed."

Pressure to stay firm

Blair has said that without the rebate, which was won by his predecessor Margaret Thatcher 21 years ago, Britain would have paid 15 times more than France into EU coffers.

Tony Blair mit Brille

Britain's Prime Minister Tony Blair is under pressure to stay firm on the budget rebate

Menzies Campbell, foreign affairs spokesman for Britain's third main party the Liberal Democrats, urged Blair to stand firm.

"Whatever the pressure this week, this is no time for the government to blink," he said. "Only a wholesale review of European Union finances and an end to the profligate Common Agricultural Policy would justify a British concession."

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