UK may forgo EU rebate
The British government may have to affirm a new system of EU finance, in which it would share the right to a budget rebate with other countries, including Germany and the Netherlands.
The British government has maintained that the annual rebate, valued between £2.1 billion to £2.84 billion a year, was fully justified, despite other net contributions being left out.
But the Blair administration is to consider the European Commission’s call for a “general rebate” for any country which makes an “excessive” contribution to the EU coffers.
Michaele Schreyer, EU budget commissioner, said she wanted the new system to receive Britain’s acceptance. Ms Schreyer won the backing of the EU Commission last week for the general rebate idea.
The draft report said the “rationale for maintaining the existing unique correction mechanism only for the UK should therefore be reconsidered.”
The full version of the paper should be unveiled in the second half of November.
The Foreign Office said it recognised some countries had problems with “excessive contributions” to the EU budget and was “happy” to reconsider its options, provided the UK was “fully protected.”
The rebate was secured by former Tory PM Margaret Thatcher in 1984 but the EU believes economic conditions have now changed and other countries ought to receive the rebate.
In 2002, the Netherlands made the biggest net contributions, some 0.65 per cent of GDP. Germany contributed 0.38 per cent and Britain 0.31 per cent.
The EU budget, at about £70 billion per year, is to receive a wholesale review in 2006.
