EU budget/UK rebate - Letter from M. Gérard Errera, French Ambassador to the United Kingdom, published in “The Independent” newspaper

29 November 2005

Sir: Hamish McRae’s article of 23 November, “Britain’s rebate isn’t such a big deal”, distorts the facts and misrepresents the French positions. It is simply not true to claim that what is at stake is getting rid of the British rebate obtained by Mrs Thatcher 21 years ago. The issue is the fair financing of the EU enlargement. It is time to accept a few facts:

- Fact number one: Britain pays less than her share of the EU budget. She pays 11% when she should pay 17% (France pays 18%). This discrepancy is due to the British rebate.

- Fact number two: this situation would continue under the proposal made by the Luxembourg EU presidency last June. As a result, Britain’s net contribution to the EU (what the UK pays minus what she receives) would be similar to France’s.

- Fact number three: Britain, the "champion" of enlargement, is being asked only to pay her fair share of the enlargement costs, nothing else. Is this scandalous?

- Fact number four: under the Luxembourg proposal, the British rebate would continue to apply in full to all farm payments. So saying that the British rebate is an anomaly which corrects another anomaly (the CAP) is irrelevant.

- Fact number five: to ask for a drastic additional reform of the CAP as a precondition for Britain paying her share of the enlargement also misrepresents the facts. The CAP has undergone two major reforms over the past three years. In 2002, all EU members agreed to put a ceiling on agriculture spending until 2013. Subsequently, the 2003 reform, described as "radical" by Prime Minister Tony Blair, decoupled subsidies from production with the result that 90% of the EU budget is now allocated to measures which do not distort international trade. The recent reform of its sugar market is further evidence of ongoing reform of the CAP.

The task of an EU presidency is to try to make proposals which are acceptable to everyone. It can succeed only if it respects the facts./.