French President Jacques Chirac condemned Britain's jealously-held EU budget rebate on Wednesday as "no longer justified," setting the stage for a new row within the European Union.
"We cannot have a genuinely proper balance unless we put into question the British rebate, which is no longer justified," Chirac told journalists as the EU spring economic summit drew to a close.
His outburst came after EU leaders agreed in effect to put on hold measures to liberalise Europe's vast services sector - measures fully supported by Britain, but opposed by France, where the outcome of a May 29 referendum on the EU constitution is uncertain.
Under a deal hammered out in 1984 by then prime minister Margaret Thatcher - who famously told her fellow EU leaders that "I want my money back" - Britain gets back GBP 3 billion (EUR 4.32 billion, USD 5.6 billion) on its annual contribution to the EU budget.
The cash-back harks back to an era when Britain's economy was nowhere as prosperous as it is today. It also reflects the fact that Britain does not reap big amounts of farm aid from Brussels, as does France.
The 25-member EU is gearing up for tough negotiations on its budget plans for the 2007-2013 period, with the bloc's Luxembourg presidency hoping to strike a deal at a June summit.
British Prime Minister Tony Blair, who clashed seriously with Chirac over the Iraq war, cannot be seen to be giving ground on the rebate, especially with a May election and a 2006 referendum on the EU constitution on the horizon.
European Commission President Jose Manuel Barroso said the British rebate needs to be reviewed. "The situation is different from the one we had 20 years ago. The United Kingdom is much more prosperous than what it was," he said.
He added: "I think we can find a way through, when we accept things have changed."
Earlier Wednesday, British Foreign Secretary Jack Straw warned that London would go as far as using its power of veto over EU budget questions in order to hang on to the rebate.
"Bear in mind we have an absolute veto in respect to the rebate ..." Straw told BBC radio from Brussels, where he was attending the summit with Blair and finance minister Gordon Brown.
When asked if London would use its veto, he replied: "Yes."
"The justice of the rebate is still there," he added. "We have one of the lowest net receipts of any EU country because of the relatively small size of our agriculture sector, and its efficiency. That continues to be the case."
Blair's official spokesman vigorously denied suggestions that Britain would give ground on the rebate in return for France dropping its opposition to the services directive.
"There is not a linkage between (EU) financing and issues such as the services directive," he said. "Any suggestion to that is wrong."
www.expatica.com . . .
"We cannot have a genuinely proper balance unless we put into question the British rebate, which is no longer justified," Chirac told journalists as the EU spring economic summit drew to a close.
His outburst came after EU leaders agreed in effect to put on hold measures to liberalise Europe's vast services sector - measures fully supported by Britain, but opposed by France, where the outcome of a May 29 referendum on the EU constitution is uncertain.
Under a deal hammered out in 1984 by then prime minister Margaret Thatcher - who famously told her fellow EU leaders that "I want my money back" - Britain gets back GBP 3 billion (EUR 4.32 billion, USD 5.6 billion) on its annual contribution to the EU budget.
The cash-back harks back to an era when Britain's economy was nowhere as prosperous as it is today. It also reflects the fact that Britain does not reap big amounts of farm aid from Brussels, as does France.
The 25-member EU is gearing up for tough negotiations on its budget plans for the 2007-2013 period, with the bloc's Luxembourg presidency hoping to strike a deal at a June summit.
British Prime Minister Tony Blair, who clashed seriously with Chirac over the Iraq war, cannot be seen to be giving ground on the rebate, especially with a May election and a 2006 referendum on the EU constitution on the horizon.
European Commission President Jose Manuel Barroso said the British rebate needs to be reviewed. "The situation is different from the one we had 20 years ago. The United Kingdom is much more prosperous than what it was," he said.
He added: "I think we can find a way through, when we accept things have changed."
Earlier Wednesday, British Foreign Secretary Jack Straw warned that London would go as far as using its power of veto over EU budget questions in order to hang on to the rebate.
"Bear in mind we have an absolute veto in respect to the rebate ..." Straw told BBC radio from Brussels, where he was attending the summit with Blair and finance minister Gordon Brown.
When asked if London would use its veto, he replied: "Yes."
"The justice of the rebate is still there," he added. "We have one of the lowest net receipts of any EU country because of the relatively small size of our agriculture sector, and its efficiency. That continues to be the case."
Blair's official spokesman vigorously denied suggestions that Britain would give ground on the rebate in return for France dropping its opposition to the services directive.
"There is not a linkage between (EU) financing and issues such as the services directive," he said. "Any suggestion to that is wrong."
www.expatica.com . . .