EU Leaders Face Deadlock Over British Rebate at Summit

British Prime Minister Tony Blair continues to insist on a GBP 3 billion rebate from the European Union, citing disagreements over farm subsidies that consume 40% of the EU's funds. Blair's stance has sparked a crisis in the European Union, with leaders struggling to conclude a six-year budget at the summit. The British PM has warned that the EU must reform its finances to regain support among ordinary people and reconnect priorities with spending habits. His position has put a question mark over the achievement of a budget deal.

Key Takeaways:

• The British Prime Minister, Tony Blair, refuses to give ground on the GBP 3 billion rebate unless European leaders cut costly farm subsidies.
• The EU's Common Agriculture Policy accounts for 40% of EU funds, which Blair considers unsustainable.
• Blair has called for a shift in EU spending priorities to focus on opening up the protected services sector, which accounts for 70% of European GDP.
• The EU's leaders are desperate to conclude the budget process and show that the EU is working well after recent setbacks, including the defeat of the European constitution in French and Dutch referendums.
• French President Jacques Chirac and Blair had a "sharp disagreement" over the rebate, highlighting tensions at the summit.
• France opposes the British rebate due to its contribution to the rebate and also receives more from farm subsidies than any other country.
• The US Treasury Secretary, John Snow, has called on European leaders to stop using anti-capitalist rhetoric or risk losing US investment.

Statistics:

• GBP 3 billion (the amount Britain is seeking as a rebate from the EU).
• 40% of EU funds allocated to the Common Agriculture Policy.
• 70% of European GDP accounted for by the protected services sector.
• EUR 6.7 billion (the amount Britain receives annually from farm subsidies).
• 25 EU nations, and all but Britain, want to scrap the rebate, won by former British Prime Minister Margaret Thatcher in 1984.

Sources:

• Reuters, "Blair and Chirac clash over EU rebate."
• The Telegraph, "Blair vows to veto EU deal on British rebate."
• BBC News, " EU leaders meet to discuss budget."