EU: EU leaders said they enjoyed a "good spirited" meeting in London yesterday but signalled they were pessimistic about clinching a deal on the EU budget this December.
Divisions over the best way to spend EU money and respond to the threats posed by globalisation emerged again at the summit at Hampton Court, signalling that British attempts to agree the EU financial perspective will be difficult to achieve.
France and Germany both objected to key elements of a new European Commission strategy to respond to globalisation, despite insistence from British prime minister Tony Blair of a broad consensus on the best way to respond to globalisation.
In a briefing after the summit, Mr Blair said EU leaders had set a "clear direction" to respond to globalisation. However, he warned that he couldn't minimise the difficulties of getting agreement on the next EU budget for the period 2007-2013.
The Taoiseach, Bertie Ahern, also struck a pessimistic note after the meeting, saying that it would not be easy to get a deal on the EU budget with just six weeks left to find a compromise. He also reiterated the Government's absolute opposition to any proposed reform of the Common Agricultural Policy (Cap) as part of an EU budget deal, a stance that aligns Ireland with France as staunch supporters of farming.
"I will look at the substance of any proposed mid-term review of Cap as long as it doesn't affect the 2003 agreement," said Mr Ahern, who stressed the importance of promoting food safety and food quality at a time when agriculture was in the news.
Agriculture remains a deeply divisive element within the €110 billion budget as it accounts for such a large slice of spending. About 44 per cent of the budget is spent on payments to European farmers, a figure that Britain wants to reduce in order to divert money to other industrial sectors such as research and development.
French president Jacques Chirac used the informal summit yesterday to again stress his opposition to a new reform of the Cap, which was reformed in 2003.
He also threatened to veto any World Trade Organisation (WTO) deal struck by the European Commission that cut too deeply into agricultural tariffs and subsidies.
The last European Council meeting in June failed to reach agreement on the EU budget when Britain demanded reform of the Cap in return for scrapping part of its €4.5 billion rebate from the EU budget. Ongoing WTO negotiations between the European Commission and trade blocs such as the US, Brazil and Australia on agriculture are also increasing tension in Paris. A new EU offer will be made today.
The setting up of a new multi-billion euro "shock absorber fund" to help workers affected by restructuring was opposed by Sweden and Germany, which do not want to divert any more money to the EU. The idea, which is supported by France and more recently by Britain, is being floated as one way to break the budget deadlock.
Outgoing German chancellor Gerhard Schröder also criticised the EU's failure to protect workers from globalisation at the summit. He said the answer was more protection, not less. Britain's free market social system was certainly not a model for the whole EU, he added.
Meanwhile, EU leaders strongly condemned inflammatory comments made on Wednesday by President Mahmoud Ahmadinejad of Iran about Israel. At a conference in Tehran entitled "A World Without Zionism", Mr Ahmadinejad was reported as saying that Israel should be "wiped off the map".
In a joint statement, EU leaders said that the comments caused concern about Iran's role in the region and its future intentions.
"Calls for violence, and for the destruction of any state, are manifestly inconsistent with any claim to be a mature and responsible member of the international community," it added.
The comments increase tension between the EU and Iran.