June 28, 2013 / 12:06 AM / 7 years ago

British rebate fears allayed to seal budget deal

BRUSSELS (Reuters) - European leaders unanimously backed a deal on the EU’s long-term budget at a late-night summit, European Council President Herman Van Rompuy said on Friday, after British concerns over its long-cherished budget rebate were soothed.

European Commission President Jose Manuel Barroso (L) and European Council President Herman Van Rompuy hold a news conference during the European Union leaders summit in Brussels June 28, 2013. REUTERS/Yves Herman

“When it comes to the EU budget, there is full agreement in the European Council,” Van Rompuy told a news conference, allaying concerns that the nearly 1 trillion euro package of spending measures could be derailed by a last-minute hitch.

Britain’s rebate, won in 1984, was created to offset the relatively lower share of cash it receives from EU agricultural and infrastructure funds compared with other countries.

The row centered on a change to how rural development funds are paid to EU member states that joined the bloc after 2004 - and which are not included in Britain’s rebate calculation - which threatened to shrink the payment by around 10 percent.

At the start of the summit talks on Thursday evening, British Prime Minister David Cameron had cast doubt over approval of a deal on the 2014-2020 budget by promising to fight off a last-minute attempt to shrink the rebate cheque.

“It’s absolutely essential that we stick to the deal we reached in February and that we protect the British rebate, and I’ll make sure that we do that,” Cameron told reporters at the start of the talks in Brussels.

British officials were satisfied with the final outcome.


Earlier on Thursday, EU negotiators overcame opposition from the European Parliament to secure a political agreement on spending plans, which have been in negotiation for months.

Under the deal, the figures agreed by leaders in February will remain unchanged. But the parliament won concessions that will allow unspent money to be transferred from one year to the next, rather than returning to national budgets as at present.

EU officials have said the change could allow spending to rise over the next seven-year period, despite the lower expenditure ceiling agreed by leaders, because actual spending will be closer to the upper limits than at present.

Once rubber-stamped by the European Parliament, the deal will unlock 960 billion euros in funding for the next seven years, funding everything from roads and bridges in poorer eastern European member states to subsidies for farmers and fishermen in France and Spain.

Additional reporting by Emmanuel Jarry and Paul Taylor; editing by Rex Merrifield

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