German officials yesterday played down the significance of today's informal meeting of EU leaders in Bonn, indicating that they do not expect a breakthrough in negotiations on the Agenda 2000 reform package.
But Germany, which currently holds the EU Presidency, remains determined to find an agreement on the reforms of agriculture funding and EU financing by March 25th, when the EU leaders meet again in Berlin.
"The meeting should not be seen as a decision-making summit but as an important step on the road to Berlin," said one senior official. "We will be trying to work out where there is room for manoeuvre in dealing with the issues."
The Chancellor, Mr Gerhard Schroder, fears that failure to agree on the reforms could increase pressure on the euro, which has lost 8 per cent of its value against the dollar in the two months since the new currency was introduced.
But Mr Schroder's efforts to hammer out a compromise between the conflicting positions of the 15 member-states are hampered by domestic pressure to secure a reduction in Germany's contribution to the Brussels budget.
Mr Schroder acknowledges that Germany will remain the largest net contributor to the EU, but hopes the level of Bonn's contribution will stop rising and start to fall slowly. Bonn currently contributes DM22 billion (€11.25 billion) to the EU each year, almost two-thirds of the entire net budget burden.
Opposition politicians are demanding that Germany's contribution be halved, but Mr Schroder could probably claim a victory if he secures a reduction of DM2 billion.
Although most of Germany's partners agree that Bonn's budget burden is too great, none can agree on where savings should be made to reduce the German contribution.
German officials have been stepping up pressure on their European partners to find agreement on the reforms, warning of dire consequences if the March 25th deadline is missed.
Bonn insists that everything remains on the table, including the question of Britain's budget rebate and the future of cohesion and structural funding.
Mr Schroder will visit each member-state next month to press home the need to find agreement on the reforms if the EU is to accept new members from central and eastern Europe.
Reuters adds:
France hopes the EU meeting will widen the focus from deadlocked farm funding talks, where it is on the defensive, to question Britain's right to an EU rebate worth as much as €4 billion a year, government sources in Paris said yesterday.
Scrapping the rebate that the former British prime minister, Baroness Thatcher, won in 1984 might be a long shot, even if the other 14 countries wanted London to give ground, they said.
But a reduction, along with other French ideas for changes in farm and regional funding, could free up €2 billion to meet German demands for a cut in the amount it pumps into EU coffers.
France is resisting German pressure for farm policy reform that would split the burden of subsidies to farmers between the EU budget and national treasuries.
