Persson pessimistic over EU funding agreement

Swedish prime minister Göran Persson said he doubts EU leaders will reach agreement on the bloc's future funding during the second day of their two-day summit here, and that it would be better to wait another year.

“I don’t think so, but we all hope that there will be a deal,” he told reporters on his way into the meeting.

Persson said leaders should not “rush into” an agreement on the EU budget for 2007-13, but should instead take the time necessary to reach an accord.

The Swedish prime minister, whose country is one of the six net contributors to the EU budget, said leaders could even wait another year before striking a deal.

“It is better to take a year more and continue to negotiate than to go for one more bad compromise,” said Persson.

“We have time to continue to negotiate about a better budget and a better distribution within the budget between agriculture and more modern measures to build the (European) Union to be more competitive,” he continued.

“I want to have that discussion before we come to a final decision.”

The UK is refusing to bow to pressure from the 24 other member states to surrender its budget rebate, unless France agrees to cuts in EU farm subsidies.

British foreign secretary Jack Straw said at the start of the summit: “The rebate is fully justified and if necessary we will use the veto.”

But French president Jacques Chirac wants to stick with a 2002 deal setting future farm spending.

Luxembourg prime minister Jean-Claude Juncker, whose country holds the rotating EU presidency, has said he is “pretty sure” leaders will fail to reach an agreement, despite his last-minute compromise proposal aimed at breaking the deadlock.

Straw yesterday rejected the latest proposal as “unacceptable to us”.

Asked whether Britain was out on a limb in the current budget deadlock, the Swedish premier replied: “I haven’t heard that.”

There were quite a few other countries “who are disappointed about the structure in the budget,” he continued.

“And I must say I’m a little bit surprised when I see the description of this summit as a fight between France and the UK. That’s a media invention. There is much more in this discussion than that.”

Fundamental reforms would naturally take a great deal of time, the Swedish leader said.

“But we’ll to have to stop some time. We can’t just go on with new compromises and end up with the same old structures. That creates some problems.”

The Netherlands too is a potential obstacle to an accord, insisting on a cut in it budget contribution.

“The Netherlands is the largest net contributor (per capita) and we want that situation to improve,” Dutch prime minister Jan Peter Balkenende said.

Leaders are haggling over the bloc’s future funding, after last night delaying plans for a European constitution.