EU summit hits crisis levels

2005-06-16 21:01

Brussels - European leaders plunged into a full-blown crisis at a summit here on Thursday, with a battle raging over long-term EU financing and their lofty plans for an EU constitution nearly in tatters.

French President Jacques Chirac called for an emergency meeting to extricate the bloc from the mess created by deep splits over the bloc's budget and by a growing popular revolt against the proposed EU treaty.

"France is ready to support the idea of an extraordinary meeting of heads of state and government to address the deep-rooted issues that involve the future of the Union and of each of our nations," he said according to speaking notes.

Reflecting the scale of the turmoil at the two-day summit here, Chirac called for a "period of reflection to reconcile citizens with the European project" and questioned future expansion of the bloc.

"Can the union continue to expand without us having the institutions capable of making this enlarged union work efficiently?" he asked.

Leaders had hoped a deal on the 2007-2013 EU budget would let them show a united front after French and Dutch voters delivered stinging rejections of their constitition, meant to lay the ground rules for an enlarged 25-nation alliance.

Instead, the summit was overwhelmed by an embarassing squabble over money, with British Prime Minister Tony Blair refusing demands by the other 24 EU nations, led by France, that he surrender an annual budget rebate.

Luxembourg Prime Minister Jean-Claude Juncker, who holds the EU's presidency, tried to break the deadlock by proposing a freeze, but not a cut, in the British rebate. Future cuts after 2013 would be tied to achievements on the British demand of a cut in EU farm aid.

Britain, which is demanding a deep re-think over the EU's future, including a cut in the bloc's generous farm subsidies, which heavily favour France, flatly rejected the offer.

"The proposals from the presidency are not acceptable to us," said Foreign Secretary Jack Straw. "That's one of the reasons why there's going to be difficulty," Straw warned.

The rebate, worth 5.3 billion euros last year and projected to average 7.1 billion euros annually between 2007 and 2013, was secured by former prime minister Margaret Thatcher in 1984 and is considered sacrosanct by Britons across the political spectrum.

Dutch Europe Minister Atzo Nicolai, too, said the latest budget proposals were "absolutely not acceptable." Spanish Prime Minister Jose Luis Rodriguez Zapatero said they were "insufficient."

As the row over long-term financing raged, a growing number of leaders leaned towards freezing the ratification process for an EU constitution, a scheme trashed by voters in France and the Netherlands.

- AFP