Interview with Sky television on the EU budget

2 December 2005

Tony Blair has given an interview on Sky television on the on EU budget.

Mr Blair said:

"The reason enlargement is in Britain's interest is that as these countries develop economically they provide jobs and prosperity for us, it is in our interest that we have these countries in the European Union."

Read the interview below:

Interviewer:

Prime Minister, before we get into the detail of this, you are saying to the British people, come what may, whatever deal is done, if a deal is done, you the British taxpayer will be paying more towards Europe, aren't you?

Prime Minister:

Well on any basis, if you enlarge the European Union we have to pay more. The question is, making sure we don't pay more than our fair share, but making sure we do pay our fair share. And the whole point about this is that we have championed enlargement and championed it for a very simple reason. The reason enlargement is in Britain's interest is that as these countries develop economically they provide jobs and prosperity for us, it is in our interest that we have these countries in the European Union. If they end up being unable to develop, and to benefit in for example the way that Ireland or Portugal has over the past 10 years, then of course they end up in the situation where they are not able to make their contribution to overall economic growth. And the interesting thing is, talking to these countries, that they believe within a few years they will be net payers to the European Union, but they need the help with their infrastructure, with economic development, because at the moment obviously they are a lot poorer than the rest of us.

Interviewer:

Can you put a price in pounds on how far you are prepared to go? The suggestion is that you are talking about an extra billion pounds a year, which by anybody's measure is a lot of money.

Prime Minister:

Well I wouldn't get into figures at the moment if I was you and some of the figures bandied about aren't actually right. But look, let me just make this absolutely clear on the rebate, we are not going to be giving up the rebate. The rebate on any basis, on any proposal we will accept, will grow, not diminish. Now it is in a bigger European budget, but the issue is how does Britain make its contribution to the costs of economic development in the new European countries. Now if we refuse to pay any money to that at all, when we are saying that Germany, and France, and Italy and all the rest should, well that would be unfair. Now what we are not prepared to do is to pay any more into the Common Agricultural Policy.

Interviewer:

What about though this Sheriff of Nottingham point? President Barroso is seen as being an ally of you on most things, and he is saying now you are behaving like the Sheriff of Nottingham, robbing the poor to give to the rich.

Prime Minister:

Well that only shows you what a tight spot we are in, because obviously from the other side people say, and this is what they say in countries like this, look come on, we are a poor country, our income per head is less than half of what it is in Britain, so how come you are trying to reduce the money that may come to us. So it is going to be difficult to find an agreement, but it is in our interests, in Britain's interest to find an agreement, otherwise you will have stalemate in Europe and the inability of these new European countries to contribute to economic growth.

Interviewer:

It is a bit like blackmail, if you don't see things our way then we will mess it up and you won't get the money.

Prime Minister:

Well I don't think it is quite like that, but I think in any negotiation like this it is very tough because everybody has got their national interest. And you have got 25 countries trying to reach an agreement, and of course we couldn't reach an agreement in June, not just because of the British, the Spanish wouldn't agree, then the Dutch didn't agree, the Swedes didn't agree. I think we had six countries in all that wouldn't agree.

Interviewer:

But the Hungarian Prime Minister was all very polite, said he understood your arguments about the big picture, but when it came to the detail of cuts in money that countries like Hungary and Poland would get, he said: No deal.

Prime Minister:

Well I thought what was interesting, and of course everyone is going to take a tough position at the moment, but I thought what was interesting was his linking of all three aspects that need reform in Europe: the Common Agricultural Policy; the British rebate, because it is only there because of the Common Agricultural Policy; and the so-called cohesion money, in other words the economic development money. And I thought the way that that was linked was interesting. I think most people in Europe actually support our case for a reformed European Union budget, the question is I think if we manage to get an agreement now, can we also insist on a review of the budget within the next few years that then allows us to make really fundamental reform on the Common Agricultural Policy. That is on the assumption we can't get that through the World Trade talks that are going on at the same time.

Interviewer:

Is there any chance of that, because the French clearly say we did a deal between Chirac and Schroeder which of course you could have vetoed, and you didn't when it happened.

Prime Minister:

Yes, but that wasn't in the context of the European budget.

Interviewer:

Yes, but it was a deal which has affected the European budget. I mean it was a mistake probably not to veto it at the time, wasn't it?

Prime Minister:

No, I don't think that, because actually we got some reductions and changes to the CAP, otherwise we wouldn't have done at all.

Interviewer:

But that is why you are over a barrel now, because you let it through.

Prime Minister:

No, no, it is not in fact. Look, you are going to be over a barrel, all of us, on the European budget because every country has got its own interest dramatically tied up. If we succeed incidentally in getting the type of deal that we want, it will be the first time, and this is what makes all the criticism of giving up the rebate so absurd, we will end up for the first time, Britain will be roughly equal to France and Italy in the payments we make, having paid double what the French have paid over the last 20 years.

Interviewer:

What about that big deal, is there really any chance that you could actually start negotiating on agriculture in two weeks time?

Prime Minister:

I think the only way in the short term you are going to open up the Common Agricultural Policy is through the World trade talks. Now Gordon is holding a Finance Ministers meeting this weekend. The other key players in the world trade talks have been invited to join. I think that it is possible to get movement there, it depends on what happens this weekend, but let's be clear, if the world trade talks fail, and fail in part not only because of Europe, but in part because of Europe, that will be a major blow to all of us, and to countries like Britain, other European countries, and to America and Japan and of course the emerging economies as well, as well as of course being desperately bad for the poorest countries in the world who need the world trade talks to succeed. So we have got some very, very big negotiating coming up in the next couple of weeks.

Interviewer:

You haven't had any hint in contacts from President Chirac or Frau Merkel that they are actually prepared to move?

Prime Minister:

Well Germany and France don't necessarily have exactly the same position on it. It is very hard for France, because let's be realistic about this, for French public opinion this is a very, very tough issue.

Interviewer:

It is for the British too.

Prime Minister:

Yes of course it is, but for France it is a very tough issue too and it is always sensible to recognise that in everybody's politics things look different. The point is however, if because of the external pressure of the need to get a deal at the world trade talks that Europe moves, I think that then makes it easier for everyone to help. Because if this world trade round fails, and again it is very urgent because in 2007 President Bush's Presidential mandate from Congress to negotiate on trade runs out, if the trade talks fail that would be disastrous for the world economy.

Interviewer:

Can we just be absolutely clear on this. If there isn't that big negotiation we have been talking about, bringing in all three elements of the agricultural policy, the rebate and cohesion funds, you are saying you will not accept a deal where the British rebate is less than it is now.

Prime Minister:

No, there is no question of that, we can't do that. What we could do is pay our fair share of the costs of enlargement, what we can't do is accept a lower amount for the British rebate.

Interviewer:

On a sliding scale the rebate will be worth less of the overall budget effectively.

Prime Minister:

Yes, actually I suspect the rebate will probably go up in cash terms, but as you rightly say you have got the overall budget there. But realise that every other country is having to give up money for that. You take a country like Spain, Spain is going to lose somewhere in the region of 40 billion euros. Now the Spanish of course have benefited enormously from European money, so it is not wrong that they should go from being net beneficiaries to contributors, but all I am saying is that enlargement, which we all support and which in the end will be in everybody's economic interest, imposes costs on all the existing European members. So there is no point in being foolish about this. And all I am saying is that I can't give up the British rebate or accept any reduction in it unless it is part of an overall big agricultural deal. What I will do however is pay our fair share of the costs of economic development in the enlargement countries, because we have always said that we should do that.