Blair, Merkel Emphasize EU Cooperation

Ahead of her Thursday afternoon meeting with the British prime minister Merkel, referred to the talks with Blair as "an important building block" in the run-up to the EU council meeting scheduled for December.

EU members are growing impatient for Britain, which holds the EU's rotating presidency until the end of next month, to put fresh proposals on the table for getting an agreement next month on the 2007-2013 budget.

Both Blair and Merkel danced around reporters' questions on Britain's commitment to keeping its jealously-guarded rebate, which exempts it from having to pay into the EU budget. The rebate was negotiated in 1985 at a time when Britain was going through financial difficulties. London's commitment to holding on to the rebate has been one of the thorns in the side of EU negotiators leading up to the summit in Barcelona on Dec. 15 and 16.

"I want a success and if you want success you have to consider the sensitivities and the positions of every country.
If you forget the interests of a country you won't get far,"
Merkel told a news conference in Blair's Downing Street home.

Budget rebate not "only issue"

Unlike European countries like France, Merkel is not critical of the rebate and stresses that it is just one issue which needs to be looked at in order to clinch a budget deal. "We need to address the concerns of everybody, net contributors and net beneficiaries. It doesn't just hinge on one issue," she said.

Britain, which has promised to find an agreement next month, has said it will put its new proposals on the table before a Dec. 7 "conclave" of EU foreign ministers. Germany's new foreign minister, Frank-Walter Steinmeier, has already rejected any proposal that would increase Germany's EU spending.

Berlin at spending limit

He said that Berlin, the EU's paymaster, is in the midst of its own austerity program and therefore has no further room to maneuver on the budget. Germany and other big contributors have long been arguing that the budget should be capped at one percent of gross national product. Voicing hope that the stalemate would soon be broken, Steinmeier said the talks could get a boost if London put proposals on the table that are close to a package proposed in June by Luxembourg, during its presidency.

An EU summit in June collapsed into a bitter exchange of accusations after Britain, Finland, the Netherlands, Spain and Sweden rejected the Luxembourg proposal. Steinmeier says that Germany and France will evaluate the British proposals together as soon as they are on the table.

Raising the pressure on Britain, European Commission head Jose Manuel Barroso has also urged London to rapidly make its proposals for ending the budget standoff. "I see a real risk if we don't get this agreement during the British presidency," he told reporters.