- The Washington Times - Sunday, June 12, 2005

LUXEMBOURG — British Foreign Minister Jack Straw launched a withering assault on French President Jacques Chirac and his allies yesterday, with British officials threatening to plunge the Continent into financial turmoil unless the French back down.

At issue is a demand by Mr. Chirac that Britain give up a $5.4 billion rebate from the European Union to help the 25-nation bloc out of a budget crisis.

What angers the British is that Mr. Chirac’s plan would allow French farmers to continue receiving billions of dollars in European subsidies. About 40 percent of the EU budget goes to subsidize farmers, mostly in France and other Western European countries.

Mr. Straw flew into Luxembourg for a meeting of European foreign ministers yesterday, vowing to tell them that plans to increase overall EU spending — while leaving French farm subsidies untouched — were “unfair” and “wasteful.”

Officials said British Prime Minister Tony Blair is prepared to plunge Europe into financial turmoil by threatening to wield his national veto over the next EU budget at a summit in Brussels this week.

The dispute comes on top of the turmoil Europe faces over its proposed constitution, just rejected by French and Dutch voters.

Mr. Chirac has taken the lead in calling for an end to Britain’s refund.

He said last week that it was time for Britain to “make a gesture” by giving up the rebate, though he refused to contemplate a reduction in subsidies paid to French farmers from EU funds.

“The rebate is not the issue, and people are deluded if they think the rebate is the issue,” Mr. Straw said.

“The rebate is a symptom of a fundamentally distorted budget system that continues to give [Britain] the lowest per capita receipts of any country because our agricultural sector is efficient and relatively small.”

British officials made clear that they were prepared for the foreign ministers’ talks, which began in Luxembourg yesterday, over the next EU budget to break up without any consensus being reached.

In private, the British have brushed aside pleas from other European leaders that a failure to agree on spending would trigger another crisis of confidence in Europe’s ability to govern itself.

Mr. Straw cast the situation in starkly moral terms, positioning Britain as the champion of the poorer countries of Europe and a defender of African farmers, unable to compete with lavishly subsidized French and other Continental farmers.

Mr. Blair will see Mr. Chirac in Paris tomorrow and their increasingly tense relations were highlighted when Mr. Blair’s office said he would give his own press conference and not, as would be normal, a joint one with his host after their talks.

British officials say that tensions between Britain and France have escalated over the budget to a level not seen since the Iraq war.

France, Germany, Spain and the European Commission have all tried to cast Britain’s rebate as immoral, arguing that the poorest entrants to the European Union, such as Poland, Latvia or Estonia, have to dig into their pockets to subsidize it.

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