"A showdown is looming"
This is fun.
Does Chirac's cheek know no bounds? Blair's claims that without the rebate Britain would be paying 15 times more than France to the EU (rather than just 2.5 times) are actually pretty much accurate. Yet Chirac still has the gaul (geddit?!?) to say that "Our British friends must be aware of how things are changing and therefore of the necessity of a greater fairness in the burden carried by each (member)".
So, what's the likely outcome? God knows.
Chirac can't do the decent thing and agree to Blair's calls for a rethink of the entire EU budget as this would mean France would end up having to pay more. He's just lost a major EU referendum, and the thinking in a number of quarters is that a large part of this was thanks to the proposed constitution bringing about a reduction of France's overly privileged position within the EU structure. Even though he knows full well that he's out on his proverbial posterior come the next French elections no matter what he does, he's not going to be prepared to go down in history as the guy who relegated France to a second-rate EU power, which is how any concessions would be portrayed by his opponents.
Blair, meanwhile, knows that to give up any part of Britain's rebate would make any future votes on any aspect of the EU even more unwinnable, as even with the rebate there is a lot of resentment over how little cash Britain gets back from Brussels, and how little (especially in comparison to France) the UK gets out of the EU project in general. If our Tony starts giving anything away he's going to build up an immense amount of resentment which could very easily give the Tories a superb platform with which to get back to power - even if the next general election is four/five years away. The Tories would instantly be able to claim "We won the rebate - Labour gave it away". Especially considering there are numerous signs that the economy is likely to get into trouble sometime soon, this could be a double blow for a Labour party led by Gordon Brown, who as the guy in charge of our finances would naturally also attract much of the blame.
But there is a chance that more support could come Britain's way. The Dutch are also moaning about the size of their contributions, and the longer this drags out, the more likely it is that other countries will start to look more rationally at the whole EU budget business. At the moment the rebate is a blatantly obvious, easily identifiable point of resentment, as it must seem odd that one of the richest member states gets such a large lump sum back from Brussels. But if they start to think about it for a moment they'll surely see that the amount of money France gets through other means is significantly greater in its unfairness. At that point, we could find ourselves with a situation whereby the rest of the EU start teaming up against both Britain AND France, and start telling us both to get stuffed.
Of course, for a numerical illiterate like me it's fairly hard to work out what a "fair" budgetary system for the EU would actually involve. It's all overly confusing even to people who understand the thing. Labour MEP Terry Wynne has some handy tables and explanations and the like trying to give an idea of how the thing works. Judging by that, it's not going to be easy.
The only thing that is certain is that, as two of the richest member states, Britain and France should - by the fundamental logic of the thing - be paying out rather more than the poorer ones. It's a kind of Robin Hood take-from-the-rich, give-to-the-poor scenario (or dangerously socialist, if you're that way inclined). At the moment, however, it is - as so often - France which is getting by far the best deal. It is, therefore, towards France that any resentment should really be directed. As I optimistically semi-predicted last month,
"France has continued to hold an influence in excess of her size or economic might ever since the 1950s, and a French “Non” would simply make this even clearer to the other EU member states. They would see France as voting against to maintain her own power, not for the good of the Union - and in subsequent renegotiations, France would find herself with too much resentment and opposition to get her way, just as would Britain."The longer Chirac refuses to even consider the prospect of a rethink, the more the irritation with France will rise. While this may not mean that Britain gets her way, it should at least mean that the French are forced into making some kind of concession. If not, it could be France, rather than Britain, which becomes the black sheep of the EU family.
With enlargement, the rebate was always going to have to be rethought. But so was the rest of the EU budget. Chirac is playing a very dangerous game, and one that is likely to backfire. Meanwhile, all Blair has to do is hold out and keep pinning the blame on Paris, and he should be able to sort something out. It won't be as good a deal as we've currently got, but post-expansion it was never going to be.