EU leaders break for bilateral meetings over budget

In the first signs of optimism over the EU budget since the Brussels summit began on Thursday, EU leaders broke for a break at around 3.30 Brussels time on Friday to continue bilateral talks in their hotel rooms.

The Council will reconvene at 6 p.m. Brussels time for the start of what could be a long night.

Hopes are that bilateral meetings will break the deadlock between Britain and France, which are refusing to budge on the British rebate and the Common Agricultural Policy respectively.

Under the UK’s much reviled rebate, it receives a rebate worth around EUR 4.6 bln per year, while France absorbs one-quarter of farm subsidies in a CAP which itself swallows 40% of the EU budget.

If no budget deal is made during the Luxembourg EU Presidency that ends this month, the 2007-2013 budget will not be revisited until after the UK Presidency ends in December 2005.

For technical reasons, that means some of the money could never be absorbed. However, Britain, among others, has argued that this is not the last chance to come to a deal.

Sweden has already asked for the budget to be delayed for another year.

EU leaders agreed yesterday to extend the ratification deadline for the EU constitution.