Germans caught between domestic and EU promises

The trouble with holding the EU Presidency during budget negotiations, when national pleading is the order of the day, is that…

The trouble with holding the EU Presidency during budget negotiations, when national pleading is the order of the day, is that the responsibility to broker a deal may well conflict with the need to play Mr Tough Guy to the domestic gallery. And there can be little doubt that Bonn's dilemma is acute. The Chancellor, Mr Gerhard Schroder, has pledged both to meet the end of March deadline set by heads of government for the Agenda 2000 discussions and has promised his electorate to reduce Germany's EU paymaster role. The determination of Germany's Social Democrat/Green government to assert vigorously its interests has brought to centre stage its demand for a fairer payments system. At present Germany makes a £9 billion net contribution to the Union, more than half the total net contributions.

Speaking to a group of Brusselsbased journalists in Bonn last week, the Green Foreign Minister, Mr Joschka Fischer, defended the new German aggressiveness. "Everyone has a national agenda, even Spain," he told the man from El Pais, who complained that Bonn was abandoning its leadership role for selfish national reasons. "To think otherwise is simply naive.

"But leadership in Europe does not mean accepting a long-term unfair distribution of contributions," Mr Fischer insisted. "Everyone needs a fair deal."

For Mr Fischer, Germany's new posture is not about pandering to domestic Euro-scepticism to slow down the process of integration, but precisely to justify integration by removing inequities.

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He is upbeat about the need for more institutional changes at the heart of EU decision-making.

"Our attitude is far more flexible than our predecessor's . . . Mr Schroder will give you your majority for closer integration," he promised, decrying Dr Helmut Kohl's loss of nerve at Amsterdam on the expansion of majority voting needed to ease decision-making ahead of enlargement. And he insisted his government is prepared to take risks on Agenda 2000.

"We are prepared to pay a domestic price to strike an agreement," he said, and acknowledged candidly that Germany will remain the largest net contributor to the Union.

Significantly, he insisted the absolute level of contributions is not the problem, but the balance, and being able to show that the negotiations have changed the payments system for the future. That also means putting a ceiling on spending for agriculture, he said, placing considerable emphasis on the "co-financing" of farm spending by member-states, a prospect viewed with horror in Dublin.

The German target is not the poorer, "cohesion" nations of the south, he insisted. "The south is not the problem," he said, but the south could become the problem if Germany's wealthier partners do not face up to their responsibilities. That's a reference to France, Italy, Denmark, Belgium and Luxembourg, whose net contributions per head fall far short of Germany's. While the net contribution paid into the budget per head in France in the 1994-96 period was £27, each German paid £155.

And, although Mr Fischer himself did not mention Ireland, another senior German official spoke candidly, though off the record, of the iniquity of the Irish 12.5 per cent corporate tax regime, "only possible", he said, "because they get such transfers from elsewhere".

"I would appeal for understanding," Mr Fischer pleaded. "Some fear that Germany is abdicating its European responsibility. Forget it. Abdication is off the cards."