SARKOZY DEAL WITH BRITAIN TO BE RESPECTED

François Hollande and David Cameron
at an EU summit in Brussels.

Traditional tensions could complicate
the Prime Minister's attempts to woo
the French President.
_________________________________________

Photograph: Olivier Hoslet/EPA



Published in :

" THE GUARDIAN "
Sunday 27 May 2012

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David Cameron to warn François Hollande
against challenging EU rebate
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Prime Minister to tell President: abide by deal struck with Nicolas Sarkozy or UK will demand major cuts in EU subsidies to French farmers.

Britain is to tell the new French government that it will demand major cuts
in generous EU subsidies to farmers in France if President François Hollande challenges the annual £2.7bn British rebate.

In a sign of how traditional tensions could complicate the Prime Minister's attempts to woo the new French President, Britain is planning to warn Paris that Hollande would be well advised to abide by an informal deal struck with Nicolas Sarkozy.

The Prime Minister agreed with Sarkozy not to push too hard for reform of the Common Agricultural Policy, which favours French farmers.
In exchange Sarkozy undertook not to demand a watering down of Britain's EU budget rebate.

Britain is hoping to deliver the message in a friendly way to Hollande who has not forgotten that David Cameron declined to meet him during the presidential campaign, all but endorsing Sarkozy.

But the Prime Minister is under pressure to take a tougher stance on Europe with a more radical reform of the next seven year EU budget which will run from 2014-2021. A tough round of negotiations, not expected to conclude until next year, is gathering pace.


Andrea Leadsom, a central figure in the eurosceptic Fresh Start Group of MPs, said the Prime Minister needed to be "more aggressive" in his negotations with other EU leaders.

Leadsom, former head of corporate governance at Invesco Perpetual, said the EU's overall budget could be cut by 15% if a series of reforms are made to structural funds which are meant to support poorer member states.
The budget is worth £112bn a year which would mean it would be cut by 15% – £16.8bn.

In a chapter of a new green paper, to be published by the Fresh Start group, Leadsom says that structural funds should only be distributed by the EU to countries whose gross national income is less than 90% of the EU average.

Britain would have been handed back £13bn of the £33bn it contributed during the current budget period from 2007-2013 had the plans been in place then.

The £9bn spent in Britain on structural funds would have been administered in Britain while a further £4bn, spent on relatively rich EU regions, would have been repatriated to Britain.
The remaining £20bn would have remained with the EU to distribute to poorer regions.

Leadsom said:
"We should be far more aggressive in our negotiating position.
Advisers tell me you can't have a shopping list but reforming structural funds would be a razor sharp reform."

The demands by the 'Fresh Start Group' may help ministers as they explain to the French that the Prime Minister will face intense domestic pressure during the budget negotiations that are expected to last well into 2013.

One senior government source said Britain will tell the new administration in Paris of the need for each country to respect their interests.

The source said:
"The prime minister and Nicolas Sarkozy had an informal understanding that we would not push the French too hard on the CAP if they keep their hands off the rebate."

If Hollande demands major cuts to the rebate Britain will explain that the CAP and the rebate are linked.
If the first element of the CAP, known as Pillar 1 which provides direct support to EU farmers, were to fall then the rebate would fall at a commensurate rate.

Margaret Thatcher negotiated the rebate in 1984 because Britain paid a disproportionate amount in the CAP Pillar 1 under the terms of its EEC accession terms when it joined in 1973.
"The rebate is never as simple as the French think," the government source said.

Cameron wants to avoid a repeat of the last EU budget negotiations, concluded in December 2005 under the British presidency of the EU, when Tony Blair agreed to cut the rebate by about £7bn in a seven year period.
Blair has always maintained that he achieved a good deal because the rebate had to be reformed after the arrival of ten new member states in 2004.
The former Prime Minister says he rejected French demands for larger rebate cuts by placing the CAP on the table.

Leadsom said :
"With the eurozone in absolute crisis the impact on all European economies is going to be disastrous. At a time like this it is complete nonsense for the EU to bury its head in the sand. We have got to really start to fight back."

Pressure from backbenches to take a tougher stance on Europe could interfere with Cameron's attempts to minimise tensions with his Liberal Democrat coalition partners.

On Sunday those tensions were increasing when Nick Clegg dismissed suggestions by the home secretary Theresa May that Britain was planning to "pull up the drawbridge" on any exodus of workers from crisis-hit eurozone nations.

May said on Friday contingency planning was under way to deal with a potential influx of would-be immigrants.

Clegg said she had only been talking about "keeping an eye on migration patterns".

He told the BBC's Andrew Marr:
"I really do think some of the breathless talk in the media about do we pull up the drawbridge to stop hordes of people migrating across Europe is both far-fetched, somewhat apocalyptic in tone and deeply unhelpful. We are not there yet."







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