International Herald Tribune:EU pushes for budget deal to offset defeat on charter. Britain requested to roll back unfair advantage

International Herald TribuneEU pushes for budget deal to offset defeat on charter

The EU foreign ministers held a last round of talks Sunday, part of hectic, 11th-hour diplomacy to undo a deadlock over Britain's threat to veto a budget deal. Britain and five others - the Netherlands, Germany, France, Austria and Sweden - are net payers, contributing more to the EU annual budget than they get back in benefits. They want annual spending in 2007-2013 kept at the current level of 1 percent of the EU's gross national income. Spain, Portugal and Greece - and Eastern European members who joined last year and are eager to reap EU economic benefits - want more.

Britain is under intense pressure to give up its annual rebate, a 1984 legacy of former Prime Minister Margaret Thatcher's fierce EU budget battles. It has threatened to veto a budget deal if the rebate goes. Britain's EU partners say the rebate - which London got because it has relatively few farmers and thus draws back relatively little in EU benefits - is unfair, as Britain has become a much richer nation over the past two decades. The annual reimbursement has averaged $5.5 billion, a year since 1984. It was almost €5.2 billion, or $6.3 billion, in 2004 and will likely rise in the years ahead.

Prime Minister Jean-Claude Juncker of Luxembourg, which is the EU summit host, has proposed freezing the rebate at €4.75 billion, phasing it out, giving financial relief to Sweden, Germany and the Netherlands - the biggest net payers - and crafting a new revenue formula in 2010.