Belgium: Prime Minister rejects British plans to cut EU budget, aid to new member states

Belgian Prime Minister Guy Verhofstadt on Sunday called for a fair European Union budget for all EU member states, rejecting British proposals that the EU's multibillion-euro 2007-2013 budget be cut.

Verhofstadt said he would block any budget deal that took much-needed aid away from the 10 new member states that joined last year. "I am for a fair budget that gives the needed funds to pay for the ambitions and problems now facing Europe and its citizens," Verhofstadt told his Liberal party congress.

The 25 EU leaders will try to get a deal on the new EU budget at their Dec. 15-16 summit in Brussels.

Verhofstadt said he would block any deal that cuts further than a previous EU spending package of Ђ871 billion (US$1.02 trillion), that represented 1.06 percent of the bloc's gross national income.

British Prime Minister Tony Blair, whose country holds the EU presidency, is expected to set out a proposal Monday that would trim the outlays to 1.03 percent and cut aid to the new member states by around 10 percent.

"A European budget which further falls to 1.02 or 1.03 percent of European gross national income is unacceptable and unthinkable," said Verhofstadt.

The presentation of the new spending proposal by Britain will relaunch what is already a bruising battle between EU governments over how much money they should hand over to EU coffers and what it will be spent on.

Britain, the Netherlands, and Sweden blocked a deal in June, arguing they were paying in too much. Meanwhile France, Germany and others are angry that Britain refuses to give up or cut the annual Ђ5 billion (US$6 billion) rebate it gets from the EU budget, which is set to increase in the years ahead, with some of it being funded by new member states that are poorer than Britain.

The British proposal is also expected to offer a partial cut of a reported 15 percent of its rebate as a way to broker a deal. Blair has so far refused to give up the payback, arguing he could only do so if France and others agree to further reform of the EU's farm aid budget, which takes some 40 percent of the EU's annual budget that stood at Ђ105 billion (US$123 billion) this year, reported AP. P.T.