Blair hopes to change EU budget

British Prime Minister Tony Blair's hopes of reducing the amount of EU aid to Eastern European nations met with firm resistance Friday, prompting a blunt warning from him that time is running out for the bloc to reach a deal on a 2007-2013 budget. "If there is no agreement now ... I think it's unlikely we will get an agreement under the next two presidencies (in 2006)," Blair told reporters after meeting with the leaders of Hungary, Poland, the Czech Republic and Slovakia.

Britain is believed to be pushing for a cut in EU aid to the bloc's 10 new members in the 2007-2013 period as a way of reducing the contributions made by the EU's leading countries. But Britain is also under intense pressure to break the deadlock by agreeing to a reduction in its lucrative budget rebate, which angers many partners _ and France, in particular. Britain is said to be mulling a compromise ahead of a key December 15-16 EU summit in Brussels. Blair arrived in Budapest late Thursday from Estonia, where he held talks on the budget issue with his three Baltic counterparts. Estonia, Latvia and Lithuania also oppose any cuts that would eat into the development funds they expected to get when joining the EU 18 months ago. Britain is thought to be considering modifying the terms of its EU budget rebate in a bid to reach an overall budget deal in December.

It was negotiated under Margaret Thatcher, with Britain arguing that it paid a disproportionate amount into EU coffers and received little back in regional grants and farming subsidies. British officials say that without the rebate Britain would have paid 15 times more than France and 12 times more than Italy into EU coffers between 1995 and 2003.

The other 24 member states insist that Britain is now wealthier than it was two decades ago, and that it is unfair the country should receive money back _ especially at the expense of poorer new members. British officials are preparing the ground for a compromise deal, that would see Blair steadfastly refuse to give up any of any part of the rebate that would be spent on farming subsidies, but agreeing to forego some funds to help cover the costs of the bloc's eastward expansion, reports the AP. N.U.