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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (31646)	6/7/2005 8:06:20 PM
From: regli	Read Replies (1) \| Respond to of 116555

>What is a "budget rebate"?< Britain's EU budget rebate product of Thatcher's iron will eubusiness.com 19/05/2005 Britain's controversial European Union budget rebate, the fruit of Margaret Thatcher's iron will to get what she wanted in negotiations, is under fire from other members sick of footing the bill. It harks back to a 1984 summit in Fontainebleau, outside Paris, where then-prime minister Thatcher famously secured the annual rebate after five years of fierce negotiations during which, as legend has it, she declared: "I want my money back." In fact, Thatcher told a news conference in 1979 that Britain "is asking the (European) Community to have our own money back". Other member states eventually went along with the deal on the grounds that at the time Britain, with a relatively small farming sector, benefitted little from the European Union's costly Common Agriculture Policy. The rebate mechanism went into effect in 1985 to make up for the difference between what Britain paid in to the budget and what it got out. The cost is borne by the other member states, including the poorest. It averaged 4.6 billion euros (5.8 billion dollars, 3.2 billion pounds) annually between 1997 and 2003. By last year, the rebate, which grows in proportion with EU spending, had reached 5.3 billion euros and is projected to average 7.1 billion euros annually between 2007-2013, the EU's seven-year budget period which is currently under intense negotiations. But some other member states, including France, Germany, Spain and the Netherlands, want the rebate to be reconsidered, claiming that since it was introduced Britain has grown much richer and the EU much bigger. Britain stands firm that it will defend the rebate, using its veto to bat down any attempts to do away with it. The European Union Luxembourg presidency proposed on Thursday freezing Britain's rebate in 2007, and then reducing it progressively, as part of an overall accord to avoid a looming budget battle.