EU budget talks collapse

2005-06-18 08:14

Brussels - The European Union careened into "deep crisis" on Saturday as budget talks failed and a two-day summit collapsed into finger-pointing, compounding turmoil over an EU constitution.

"People will tell you next that Europe is not in a crisis," Luxembourg Prime Minister Jean-Claude Juncker, who holds the EU presidency, said after a two-day summit ended in acrimony.

"It is in a deep crisis."

Fundamental differences between Britain, which clung to its long-cherished budget rebate, and most of its 24 EU partners proved impossible to bridge in a desperate, last-minute round of EU diplomacy.

Recriminations broke out as hopes for a deal on the 2007-2013 budget, worth about €100bn a year, evaporated.

"I believe a deal would have been possible. The fact that there wasn't one is solely due to the inflexible stance of the British and the Dutch," German Chancellor Gerhard Schroeder told reporters. The Dutch had demanded a cut in their annual budget payments.

"In reality we were close to an agreement," added French President Jacques Chirac, saying he "deplored" Britain's stance.

British Prime Minister Tony Blair denied being isolated by his partners at the summit table.

"We were not alone at the table," he said.

"I hope we can move forward from here," Blair told reporters, as he reiterated his call for a root-and-branch review of the way the European Union spends its money.

In a desperate, vain attempt 10 EU newcomer states had called for new efforts to strike an accord, offering to dig deeper into their pockets if it would help. The call went unheeded.

Trembling with emotion

Juncker, trembling with emotion, said their offer made him ashamed.

"When I heard one after the other, all the new member countries, each poorer than the other, say that in the interest of reaching an agreement they would be ready to renounce some of their financial demands, I was ashamed."

The budget row also unmasked a deep gulf between countries like Britain, which want a lean, market-oriented alliance, and others who want a deeper alliance with social benefits for citizens.

"During this budgetary debate there were two conceptions of Europe that clashed and will always clash," Juncker said.

"There are those who, in fact without saying it, want the big market and nothing but the big market, a high level free trade zone, and those that want a politically integrated Europe," he said.

"I have felt for a long time this debate would blow up one day."

EU leaders had hoped to show unity over the budget, regaining some popular respect after French and Dutch voters' humiliating rejection of their first-ever EU constitution.

- AFP