UK Prime Minister Tony Blair says the EU budget talks will be tough, but that all of the leaders meeting in Brussels know it is imperative a deal is struck. "I think that everybody realises that if we are going to do a deal on the budget, it's now," he said. Earlier, Swedish Prime Minister Goran Persson gave only a 50/50 chance of success for the UK-led proposals. The head of the European Commission, Jose Manuel Barroso, said he expects a new UK offer to be made on Friday.
Mr Barroso said he thought an agreement was possible, although he said there had been no discussions on figures.Speaking at the end of the first day of talks between leaders of the 25 member states, Mr Blair did not confirm the British would present a new proposal, but said it had always been anticipated that a fresh offer would be made. Criticism of the latest British offer, which includes an increase in the budget, more money to new member states and no new cuts to the UK's own rebate, has been widespread.
However, Mr Blair warned that a new offer would only be made if there was a real chance of agreement. "There has to be a basis for agreement otherwise there is no point in putting forward the proposal," he said. "I see a basis for it yes, but whether the basis for it will recommend itself to everyone I don't know." France and other EU states say any deal must be based on cuts to the UK rebate.
Britain has said it will offer no further concessions unless France agrees at least to allow the possibility of serious reform of agricultural policy in three years' time.Polish Prime Minister Kazimierz Marcinkiewicz said he expected a new UK proposal - the third in two weeks - to be on the table by 1000 GMT. Poland, which would get an extra 1.2bn euros (Ј814m) under the current offer, has said it will veto the proposal as it stands.
Before the summit opened, French President Jacques Chirac said any agreement must be based on a "lasting" cut in the UK rebate.
France wants to defend the EU's agricultural policy from any attempt at reform and demands the UK gives up more of the rebate it receives on its budget contribution to help pay for EU expansion.
In theory, EU leaders have until March to hammer out a deal, but planning for long-term projects could be hurt, the BBC's Oana Lungescu in Brussels says. Europe is already in crisis after the rejection of its first constitution earlier this year, our correspondent says. If its leaders fail to agree on the budget now, they will find it hard to agree on almost everything else, she adds. The new UK proposal would increase the 2007-13 budget by 2.5bn euros (Ј1.7bn) compared with its first proposal, issued a week ago, reports BBC news. I.L.