EU: EU leaders will try to resolve bitter differences over the Union's next seven-year budget at a summit in June, Luxembourg's incoming EU presidency announced yesterday.
Luxembourg's Prime Minister, Mr Jean-Claude Juncker, acknowledged that finding agreement would be difficult but warned against postponing a decision until Britain assumes the EU presidency in the second half of this year.
"These will be long and protracted negotiations . . . If we don't succeed in completing the negotiations during this six months, it will be difficult to complete them during the subsequent presidencies," he said.
Mr Juncker was speaking during a joint press conference with the Commission President, Mr José Manuel Barroso, where he outlined Luxembourg's plans for the next six months.
Mr Juncker hopes to secure agreement on the reform of the Stability and Growth Pact by the end of March, although he stressed that the EU's budget rules remain essential for the stability of the euro.
"The time has come to take stock again. Obviously, the presidency does not want to eliminate stability from the Stability and Growth Pact," he said.
EU member-states are deeply divided over the EU's budget plan for 2007-2013, known as the financial perspectives. The biggest net contributors to the EU, led by Germany, want the budget capped at 1 per cent of the EU's Gross National Income (GNI).
The Commission, along with some poorer countries, argues that such a limit would make it impossible for the EU to fulfil the tasks it has been given by the member-states. Meanwhile, Spain and Poland are split over how EU structural funds should be divided, with Madrid resisting moves to give more to central and eastern Europe at the expense of poorer regions of western Europe.
Britain is fighting to retain the budget rebate secured by the former prime minister, Lady Thatcher, two decades ago. London is eager to resolve the budget dispute before it assumes the presidency in July, when it would be more difficult to fight aggressively for its national interests.