17 December 2005
Tony Blair chaired two days of talks at the EU summit in Brussels where he successfully brokered a deal on the future financing of the Union. Afterwards he spoke to journalists alongside Jack Straw and Jose Manuel Barroso.
Opening statement
Tony Blair:
Well as you probably know, we have an agreement on the financial perspective. I would just like, if you would bear with me whilst I take you through some of the details, and first of all let me apologise, I know you have been waiting a very long time for this, as indeed we have. It is an amazingly complicated negotiation, indeed if anything indicated how important it is at some stage to get the budget fundamentally reformed, it is the process of trying to put together the different aspects of it.
What are the main things that we have agreed? We have agreed an overall budget on the 1.045, which is somewhat up from the original proposal we put forward, though somewhat down obviously on the original Luxembourg proposal. The key thing is that it allows the enlargement in the new member states to take place, with them being able to plan ahead with some certainty for the money that they are going to receive. And I just want to emphasise that of course the whole purpose of the financial perspective is to engage in a large switch of resources from the wealthy countries, the original European 15, to the new accession countries, and of course that is entirely right and proper.
And over the period of that financial perspective there will be a very large shift in resource between the E15, if I can put it like that, and the accession Ten. And that money will go to the new member states and for that part of it that is about structural and cohesion funds, I would like to look upon that as an investment in those central and eastern European economies to help them grow, to help them develop, and it is an investment that will yield an enormous return for all of us making that investment, in particular those countries with whom they are going to trade, and for whom as a result of the growth in their economy, the overall prosperity of the European Union will be increased.
As you know, the UK has said that it will pay its share for that enlargement, but I just want to make one or two points very clear, as indeed the text makes very clear. The rebate remains in full on all spending, other than the spending for economic development in the new European countries, in other words, other than that money that we are investing in economic development for the future, the rebate remains in full. But it is obviously right that we make our share, on an equitable basis, as other countries are doing, for the cost of that enlargement in that respect, although of course on all Common Agricultural spending, it remains.
The other point I want to make is about the review clause. Again let me make it very clear what we are saying here, and I know the President of the Commission will speak about this in a moment. We have now asked the Commission to undertake a fundamental review of all aspects of the European budget. That will report in the next few years. It will allow us, should we wish to do so, but obviously everyone must agree to this, to make changes at that point, when the Commission reports, and it can also be used as a basis for the next financial perspective that will start in 2014. I think that there is an increasing view virtually everywhere in Europe that such a fundamental reform is necessary, and I think that, as I said a moment or two ago, if anything indicated that it is the budget negotiations we have just been having.
One other thing I should say, and I hope you will forgive me for doing this, it is also important just to point out that in terms of net contributions, the payments that we will make in in this financial perspective, the UK and similar sized countries will come into parity for the first time since we were members of the European Union, and that is obviously important.
So, look this is an agreement that allows Europe to move forward, it allows us to demonstrate the right solidarity with the new member states, and for those of us that have championed the enlargement of the European Union this is an important point. It allows us to develop a different perspective for the future in order to reform the budget so that it better meets the needs of modern Europe, and it has been extremely difficult, it has taken difficult compromises on behalf of everyone, but I think that it removes one major obstacle to Europe moving forward in the right modernising direction, and I am pleased we have been able to reach agreement.
And now over to you Jose.
Mr Barroso:
Thank you. I welcome the fact that member states have now reached a deal. This is indeed a very important political signal for Europe. Europe avoided paralysis, Europe is on the move. And I am certain you remember what I said before this European Council, how important will be the costs of non-agreement. The fact that we have an agreement is a good thing for Europe. The Commission has been fighting Europe’s cause. This was a tough negotiation in which we have worked for an enlarged, modern, open European Union for the European Union to move forward as a whole, always with the idea of solidarity between old and new member states, rich and poor member states. Without solidarity there is no union.
It is true that this agreement is not everything that the Commission wanted, but we have worked very actively to help member states to reach the best deal possible in the circumstances, and in fact this deal is a significant improvement on the earlier proposals of the Presidency. I want to underline the fact that we have worked very loyally with the Presidency, and I want to congratulate Prime Minister Blair for that. We have not always agreed on the proposals, but it was possible to work in a very loyal and constructive manner, and I am happy to say that the outcome includes all the main proposals I made to Prime Minister Blair, notably a significant increase, around 15 billion in the overall spending, reinforced by the increased flexibility which turns virtual money into money that can be actually spent, more money for the new member states, over 5 billion compared to the first negotiating box, the change to the British rebate, in the light of enlargement, exactly as the Prime Minister has just said, and also a globalisation adjustment fund and a comprehensive review clause.
And let me tell you what I think about this comprehensive review clause, that as you may remember I proposed already in June. I welcome this agreement on the comprehensive review clause and the mandate given to the Commission to prepare this revision of the budget. The Commission will look at all aspects of the budget from 2008 onwards, without taboos. The review clause provides the opportunity to reinforce the open, modern, enlarged European Union that we want.
It is true, as I said, that the Commission has asked for more, but it is also fair to say that this deal is much better than the proposals we have discussed over the last few weeks. In any event we keep our ambition, and I believe the revision clause will be an opportunity also to match that ambition.
Today is not the end of the road, in fact the future budget needs formal approval of the European Parliament. The next step will be the negotiation of an agreement between the European Parliament, the Council and the Commission. This needs to be done soon, taking on board the views of the European Parliament. I believe it is possible to get it, I believe it is good for Europe that we keep Europe on the move, that we avoid paralysis and that we keep committed to the idea of an open, enlarged, modern Europe with a basic respect for the principle of solidarity.
Question and answer session
Question:
Prime Minister, thank you, I am sorry to detain you at this rather late hour.
Tony Blair:
I am sorry to detain you.
Question:
British taxpayers are being asked to pay a billion pounds more each year for the EU, and in return they don’t get reform of the CAP, they don’t get the promise of reform, but merely a review. Can you really argue that is a good deal for Britain?
Tony Blair:
I most certainly can. When people say what do we, as Britain, get in return for this, first of all we get the economic development in the new European countries that we have been championing and which will benefit Britain, as well as the rest of Europe. Secondly, we retain the rebate in full on all other spending, including all Common Agriculture spending. Thirdly, the rebate actually rises over the next period, not falls. And fourthly, we get for the first time ever in the history of Britain’s membership of the European Union parity, equality with countries like France of a similar size. Now when people say well you have given up this sum of money on the rebate, but you haven’t yet got the structural form of the CAP, let me make it absolutely clear, we always should be willing to pay for economic development in the new European countries.
If we were to say that everybody else in Europe, the French, the Germans, the Spanish, the Italians should pay for the new European countries, but we, Britain, refuse, that would be quite unreasonable. However, what we are not going to do is to give up the rebate or any part of it on any of the spending in the original European Fifteen, or any Common Agricultural spending, until that fundamental reform occurs. And if can just actually, I was going back, because I knew some of the questions that would be asked obviously, but I was going back to what I said in June. I think it is very important to realise that what we are doing today is fully consistent with what we said in June. And when I came back then and reported to our parliament, I said this: that I propose we have a fundamental review of the budget, reporting in time for us to be able, mid-way through the next financial period, to alter fundamentally the structure of the budget, dealing with both the rebate and the CAP, and I went on to say that in the meantime of course we would make sure we paid our fair share of enlargement.
And so all the way through what I have seen is two separate aspects to this: one, we pay our fair share of the costs of economic development in the new member countries, because otherwise that would be quite wrong, Britain would be saying everyone else should pay but we are not; but secondly, we need a forward perspective that allows us then to change fundamentally the whole of the budget, and that is the only circumstance in which we then put the rebate on the Common Agricultural Policy or the spending in the original European Fifteen. So we get both of those things together.
Question:
Mr President, yesterday President Borrell, sitting in that very same chair, was saying that you were losing your time if you intended to follow the path you were taking in relation with the figures that finally you have agreed upon. Do you fear that the parliament will be disappointed again with these figures?
Tony Blair:
Look, I think a certain amount of disappointment comes with the job of being President of the European Union, and you get it from practically every quarter. And some people are saying to me, as you have just heard, you know we should simply stick where we are and nothing should change insofar as Britain is concerned, other people say you should be far more ambitious and put more money in the European budget. At some point you have got to come up with a deal, and the important thing is this - if we believe in enlargement we had to do this deal now, and if we didn’t we weren’t going to do it in the next year, we would then move to annual budgets, it would make it impossible for these new European countries to plan ahead, and we would do real damage, not just to their cause but to the cause of enlargement more generally. So I don’t doubt that I will get a certain amount of criticism from people who say I have gone too far, people who say I have not gone far enough, but in the end this is about getting an agreement that allows Europe to move forward and I think it does do that.
Question:
Nonetheless Prime Minister, you did have a veto, you haven’t got even a promise of movement by France on the Common Agricultural Policy and you have given up £1 billion a year. Now you can understand, can’t you, why William Hague for example is describing that as surrender.
Tony Blair:
Well I would be very surprised, whatever I came back with, if he didn’t describe it in that way. And let me just make one thing clear to you, because again I think this is a misconception, if I can say this respectfully to my own media, that it is not only Britain that is being asked to pay for enlargement. Look, all the countries that are the wealthy countries of Europe are paying for enlargement, and most of them incidentally are losing far more money than Britain over the time of the next financial perspective. So for example a country like Spain is going down somewhere in the region of 40 billion euros in the next financial perspective. France will be, for the first time, in parity with the UK in terms of the payments we make into the European budget. So when people say to me well Britain is giving up money, it is as if Britain was giving up money and everyone else was gaining money.
For the countries that are the existing members of the European Union, everybody is changing, in fact many countries that for several years have been net recipients of European money, are becoming for the first time net contributors to the European budget. What however we have insisted upon, and this is the whole point about Common Agricultural Policy, is the rebate remains in full on Common Agricultural Policy, indeed in full on everything other than the costs of economic development in these new member states. And if we were to say well we are not prepared to make any payment at all in circumstances where it is not possible now, and I made that clear in June, it is not possible now to get the change in Common Agricultural Policy, but for the first time now we have got a process with a review undertaken by the Commission where we can look at all these fundamental questions and get them resolved in a more satisfactory way for the future. But if you actually look at the net amounts that Britain is paying in as a result of this, and other countries, I have to say we do reasonably well actually, and it is important not to give people the impression that it is only us in Britain that is paying for this. The whole point about enlargement is that within roughly the same budget you are transferring large sums of money across from the more wealthy countries to the poorer countries, and that is the same for Britain as everyone else.
Question:
In the light of the further enlargement process, where is the conclusion for the Macedonian candidate?
Tony Blair:
The conclusion was agreed about Macedonia and I think it is in the conclusions. And of course that I hope again emphasises, again in the future, we hope to see Europe reunited in all its aspects and obviously Macedonia is an important part of that vision.
Question:
Prime Minister, why is this deal better than the one that you were offered in June by the Luxembourg Presidency, which after all did have a review clause rather similar to the one that we are describing today and would have allowed even more money to go to those eastern European countries to help develop their economies from which we will all prosper?
Tony Blair:
Well that is very easy to answer. The amount required from us was more than double what we have been able to do. The review clause was actually not nearly as strong as this review clause, this now makes it absolutely clear that the Commission will report on all aspects of expenditure and that the Council is able then to take decisions on all aspects of the review. And of course the amount of money we are spending overall was smaller and we believe until you get to a reformed budget there should be a smaller amount of money. But in blunt British terms, you know this is a very considerable reduction in the money that we are putting in.
Question:
Prime Minister, a lot of recent summits have focused on ambitious new schemes, potential gains to the European Union such as the constitution, the expansion with ten new members, the possible formation of a common foreign policy on the subject of Iraq. Your Presidency has been a period in which all that could be hoped for was that the European Union could simply continue to function. That is a rather depressing collapse of the European project, and is Britain the villain?
Tony Blair:
Well thank you. It is a trifle exaggerated. I mean after all we did begin the accession negotiations with Turkey and Croatia, and of course we have reached the budget deal, which you may recall was a little tricky. But anyway, I take it we are not getting a standing ovation over there. But look, what is important, I think that the reason for getting a budget deal is also just to clear it out of the way and then let’s start concentrating on the future agenda for Europe that is about economic reform and meeting the challenge of globalisation, about illegal immigration, about security, and of course as the President of the Commission was saying, the possibility of getting a sensible budget in the long term. Because I think one of the things that has come out of this negotiation is the determination of people that the next time we have to negotiate a budget we do it on a more rational basis frankly than the basis we have at the moment, and you know for the Commission to be leading that review is very important.
Mr Barroso:
May I just, because I am more independent in judging the British Presidency, but let’s be fair, we have to congratulate them, they were great results for this British Presidency. In fact not only Croatia and Turkey to start the process, now to get this deal. This deal was so difficult to get among member states, really, it was done, it was possible. So this is something that we have really to congratulate the Prime Minister and all his team for the great things they have done. Just think what we would be saying tonight if we could not have this deal, think about the alternative. What will be, what will be the signal to our citizens in all countries, and outside, how would our friends outside of Europe be looking at us, they cannot even agree on a budget, and it was possible among member states. So really it was an achievement, and many others, I think the Hampton Court summit was really a very important one, and we start now building a new consensus, a more modern, competitive, open Europe.
So we have now clear guidelines. We are going to use this mandate very seriously. Please look at the conclusions, what is said there, it is a comprehensive wide review. Let me tell you that this is a very clear mandate for the Commission and we are going ahead with it, we are going to have a real debate on this, not only among ourselves in the Commission but with the European Parliament, with the public opinions of all member states, to put the question to our public what do you think we should spend at European Union level, where does it make a difference to spend at European level or national level, what are the resources we need and what are the priorities of spending? So that is a fundamental debate that we sooner or later should have, and now I believe we are going to do it in 2008. So I was not always agreeing with my good friend, Prime Minister Blair, as you know, because he is a very tough negotiator let me tell you, but honestly we have to say that this was a very successful Presidency. And now, just now, around the table all the 25 member states agreed with this and they congratulated Prime Minister Blair and the British Presidency, and I want to say this in front of you because it is only fair to say, that after a marathon like this he deserves at least this word of congratulation.
Question:
Prime Minister, do your allies and friends in eastern Europe see this negotiation as a success, or do you think they will be more willing to back you in your search for CAP reform? And also on the review clause, the clause today looks weaker than the clause we had last week, in what some diplomats are calling a fudge, was that change necessary to get a compromise with President Jacques Chirac in order to get him on board?
Tony Blair:
First of all on the latter point, no, I think we have made it very clear, and look there are all sorts of changes in the language, you will see some of the rebate language has changed as well, and hardened up in fact on the clause to do with that. But the most important thing is that we have got a review now that allows us to make a change, and when we decide to make the change is up to the European Council, and I have always said we can’t oblige people to say now, and France of course will have its position, other countries will have their positions on the various timings of this and so on, that is the way it is, that is natural. But the fact is we will be having in 2008 a fundamental review by the Commission of all aspects of the European budget and it will be then for us to take a decision. In addition to that you will have had the WTO negotiation, and in addition to that we will be in a situation where people can see very clearly the longer term perspective of where we need to spend money.
So it has never been my case, and this is one of the misunderstandings, I have never said that we could force a fundamental reform of the CAP this December, it was never going to be possible to do that and that was not what we were arguing for, what we were arguing for was sorting out the issue of making sure enlargement could work with economic development, and then offering the possibility in this next financial perspective of fundamental change on the basis of the review. Now as to the first point you made, I think this is an important point to say particularly to people like the Conservatives who say we should have done no such deal at all, no I believe that Britain’s strong relationship with the new European countries has been safeguarded, and also if I may say so with the new German government too, which is important. If we had simply said we were not going to do this deal, not on any terms other than terms frankly that no other member of the European Union would have agreed to, we would have done immense damage, not just to the European Union, we would have done an awful lot of damage to our relationship with those new countries, and that relationship is in Britain’s national interest.
Look I am the British Prime Minister, I was the President of the European Union, but I have never believed that those two interests are separate, but when I put on my hat as UK Prime Minister, as British Prime Minister, I am proud of the fact that we have championed enlargement, I believe it is absolutely right that we contribute to the costs of the economic development of those member states, and I point out yet again that we have not just kept the rebate, in full, on all other spending, but it will actually increase over the period of the next financial perspective. And in the end I would like to see a situation where … from this type of negotiation where there is continual, sort of here is the rebate, here is the Common Agricultural Policy, we should get to the point where we have a rational budget that is about, as the President was just saying, it is about what you want to spend, where you want to spend it, and payments …according to wealth, but according to need, and that would be a rational budget and that is actually what we should be aiming for, and aiming to get agreement on that as soon as we can.
Question:
Prime Minister, when you launched the British Presidency six months ago you said that Europe was in crisis and you wanted to help restore people’s faith in Europe, and you said that on the budget you were totally opposed to a deal that was the usual cobbled together compromise in the early hours of the morning. Well it is 2.00 in the morning, I just wonder why the negotiations have been so protracted and what you think this deal has done to restore people’s faith in Europe?
Tony Blair:
Well as I just said a moment or two ago, if we had failed to reach an agreement at all I think Europe would have been in very severe crisis. But I also said what I said in the context of saying, look we have got an immediate problem, and then we have got a medium and long term challenge. The immediate problem is to make sure that those new member states can plan ahead, and for that they need a budget, that is the reason why they were beating our door down saying you have got to try and get a deal, that is why we would have done immense damage to our own country’s interest had we not tried to secure such a deal. They need one, they are the ones that need a deal.
So we had to get an immediate deal, but then you have got the medium and long term challenge, which is … budget, and what we have provided for is a process that gets us there. Now in the end it can only be agreed if everyone agrees, so like any budget negotiation it can only be done if people are going to come together and want to do it. But this time we are giving ourselves the ability, through the review that the Commission will undertake, to look at this from the beginning, from first principles, what is it we want to do, what are we trying to do? And that therefore is why I think this does offer us a different perspective, this deal. It solves the immediate problem, because we have got to solve it, otherwise we will do a lot of damage to ourselves, and to particularly the new member states, but it then gives us that forward perspective and that is important. Now how we use that is up to us, and up to the strength and vigour of the Commission review. But you know I was struck very much, well you know this Jose, going round the table at various points, the numbers of people from different positions on the European budget who said we have got to sort this out for the future, the next negotiation can’t be like this one. And you know that is important I think.
Question:
Prime Minister, Gordon Brown described the British Presidency as a make or break chance to reform Europe’s economies. What you have ended up with is no clear commitment from France to a fundamental reform of the CAP, your Hampton Court economic agenda, you have ended up just with a series of working groups. What do you say to people, possibly including your Chancellor, who say that you have failed to live up to the grand rhetoric of your speech to the European Parliament, which would take Europe out of its economic slumber?
Tony Blair:
I think what I would say to you is to go back and read the speech in June and you will see what I actually said, which was not that within six months I was going to transform the European economy, I know I am sometimes accused occasionally of over-promising things, but I did not say that. What I said was this, that we had to offer the possibility of making the fundamental reforms in the European budget for the future. Now we have got a process that allows us to do that. But don’t be in any doubt at all, if we had failed to reach an agreement here, there would have been new member states that then could not properly plan their economic development, the whole cause of enlargement would have been set back, we would have had a situation where not just, Europe in crisis is sometimes seen as just a phrase describing the politics of Europe, it would have meant for those new member states that their ability to take advantage of the huge opportunities of enlargement were then set back.
rwSo you know if you go back over the years and you see for example in relation to Spain or Ireland, to take two countries, as a result of the enlargement that allowed those two countries to come into the European Union, they have gone, as we now see, from large net recipients of European Union money, to more or less equal or net contributors, and they are now highly successful economies, which incidentally do an annual trade with the UK of about $40 billion a year. It is an investment that we are making. So look you guys can say all you like about well we have actually achieved nothing by a financial deal, I think if you were to go to the press conferences of those new member states and ask them what they would have thought of Britain if we hadn’t even tried to get a financial agreement, I think you would get the answer to your question.
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