Crucial decisions will be taken in the European Union next year. Ireland's dependence on this European budget will come to an end, not just because we are now wealthy enough to stand on our own two feet, but because other countries are following Mrs Thatcher's malign example of the 1980s and looking for "their money back" from Europe.

Germany is in the vanguard in this regard. Germany contributes 27 per cent of the European budget, as against only 17 per cent contributed by France. Yet in the European Council, Germany has only the same voting strength as Greece, Portugal and Luxembourg combined.

No one wants to introduce a German rebate, like Mrs Thatcher's, whereby Britain still gets a special refund after all the calculations are done. If all net contributors were to look for a rebate, the whole edifice of the common European budget would collapse and the Union would stagnate.

So the solution being considered by the Commission is to artificially re-jig the spending programmes so Germany receives more spending, thereby closing the gap between what it receives and what it contributes.

The scope is not enormous. Some 42 per cent of the European budget goes on agriculture and 40 per cent on the structural funds. Either way, if Germany is to get more, countries like Ireland are likely to get substantially less.

And the adjustment of spending to favour Germany has to be achieved within a framework of policies that are nominally common to the whole European Union. This explains, for example, the peculiar subsidy on maize silage introduced last year. Germany has lots of maize silage, so a subsidy was a way of twisting the rules to give it more money.

One way of getting away from this insoluble argument about countries "getting their money back" would be to introduce a new common European tax, payable directly to the EU by the citizens of Europe.

Obviously it would be very hard to get national governments to agree to money being paid to Brussels over their heads. Yet, if they do not agree, there is a real risk that they will fall out over money and start breaking common rules. Germany is already making difficulty with Europe's competition rules.

In that event, the enlargement of the Union to bring in countries like Poland, Hungary, the Czech Republic, Estonia and Slovenia would become impossible. Then the political cement that is holding central and eastern Europe together could begin to dissolve. Those who read history will remember what happened in the first half of this century when central and eastern Europe became unstable.

Many of the central and eastern European countries that are applying to join the EU are putting their people through severe hardship in order to transform themselves into market economies. Loss-making enterprises are being closed and the redundant workers made to rely on primitive social welfare payments.

This is made acceptable to their electorate by the promise that it will qualify them for membership of the EU.

Once in the EU, they will be able to come out from under the military and economic shadow of Russia. Joining the EU is something of a national project for countries like Poland, Romania or the Czech Republic.

If the EU was to close its door to applicant countries, this would rekindle the memory of earlier and more severe betrayals by the West, in 1938 and 1939.

To open the door, the EU must first sort out its own budgetary problems. Some would argue that it must also streamline its voting and decision-making procedures. If the EU now has difficulty making decisions with 15 members, surely this will become even harder with 20 or 26?

True, but if enlargement has to wait for that to happen it will never happen. The last Inter-Governmental Conference failed to sort out the voting and decision-making issues; I believe states will only summon up the will to deal with this after we have brought in extra members, and only then because we are forced to do it.

There are other difficult questions that will come up in the enlargement negotiations. One of these is immigration. Tight controls on immigration will be required of new members. If just one new member-state were to maintain a liberal immigration regime all would-be immigrants would come into the common European travel area through that state.

However, a common immigration policy could be difficult for some applicants. Is Poland to close its border with Ukraine, notwithstanding the long-standing links between these two countries? Is the Czech Republic to close its border with Slovakia, or Slovenia its border with Croatia?

To what extent must these applicant countries be required to adopt the European social model, designed for mature economies with a mature trade union and industrial relations structure?

Imposing the Western social model on eastern European countries could stunt the trial-and-error dynamism that is necessary at their present phase of economic development.

Supporting EU enlargement will not be easy for Ireland. We will be contributing financially. Our voting strength in the EU institutions will be diluted. We will be sharing power and resources with countries that are further away from us, psychologically and physically, than France, Spain, Germany and Britain.

Yet, it is in our best interests to do so, because an enlarged Union will help build a structure of peace in this part of the globe for the next century.

John Bruton TD is the leader of Fine Gael