Prime Minister Tony Blair holds second round of talks on EU budget

Prime Minister Tony Blair holds a second round of talks with European leaders Friday, as pressure mounts on him to revise his EU budget blueprint and give up more of Britain's annual rebate. Member states have widely panned Blair's plan to slash the 2007-2013 budget and substantially cut aid to the new member states.

Visiting Berlin on Thursday, French President Jacques Chirac bluntly dismissed the proposal as unsatisfactory, a view widely shared by a host of EU leaders who visited Blair's Downing Street office. Blair planned to speak by telephone Friday with Luxembourg Prime Minister Jean-Claude Juncker and Belgian Prime Minister Guy Verhofstadt and meet individually with the leaders of Ireland, Greece, Spain and Austria as well as European Union Commission President Jose Manuel Barroso.

Failure to reach a deal could propel the bloc into a prolonged crisis. It would leave EU spending frozen at 2006 levels, which would leave no new aid money for either the poor regions of the EU or for emergency humanitarian aid projects around the world.

Britain is expected to make new proposals on Monday and is under pressure to increase the overall size of the budget, increase aid to the newest and poorest member states and give up more of its lucrative rebate, a cashback guarantee worth Ђ5.6 billion (US$6.6 billion) this year.

Chirac has led the calls for Britain to agree to a phaseout of the rebate. Blair has offered to trim it by Ђ8 billion (US$9.4 billion) over the budget period, but insists the bulk will remain in tact until the bloc substantially reforms farm spending. France has flatly rejected a spending review in 2008, meaning the bitter deadlock that caused negotiations to collapse in June is unresolved.

Britain has proposed an Ђ847 billion (US$993 billion) package for 2007-2013, representing 1.03 percent of the bloc's gross national income, some Ђ24 billion (US$28 billion) less than the deal proposed by former EU leader Luxembourg in June. Most of the cuts, some Ђ14 billion (US$16.5 billion), will be made in regional aid to the poorer 10 new countries that joined in 2004, reports the AP. I.L.

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