Britain Protests EU Budget Plans

The Commission's plans include redirecting money in the 25-member union from old members like France and Spain to the new eastern and central European countries.

The budget plans also include cutting Britain's budget rebate, a highly contentious issue between British officials and Brussels which has heightened tensions outside and inside the Commission.

Presenting the Financial Perspective, European Budget Commissioner Michaele Schreyer, together with president Romano Prodi, set out the EU budget plan, an ambitious blueprint for how to spend some €1,000 billion ($1,238 billion).

But with three-quarters of the EU budget already committed to farming and regional policies, there is little money for innovative and forward-looking programs, especially in the new member states. Still, the most contentious part of Schreyer's plan is not the total expenditure, nor the lack of vision, but the proposed reduction of the €4 billion rebate given to Britain annually.

New states would have to pay for Britain

The 10 new poorer members of the EU feel Britain's 20-year old rebate, which as new members they also have to finance, is unfair. Unlike in the 1980s, Britain today is the second-richest EU country in terms of per capita income. Back in 1984, Margaret Thatcher, then UK prime minister, when fighting for the rebate, stated: "I want my money back." But Schreyer explained the situation is much different now than it was two decades ago.

"The sums allocated to new, poorer member states is growing and the British rebate is also growing to the burden of others," the German commissioner said. Britain now had a "magnificent" economy and no longer needed the rebate, she added.

The British government is fighting tooth and nail against any move to scrap the rebate. The two British Commissioners, Neil Kinnock and Chris Patten, should in theory represent the greater 'European' interest. But even they tried to persuade Romano Prodi, president of the Commission, to water down Schreyer's rebate plans.

Patten fears EU backlash in Britain

External Relations Commissioner Patten wants more understanding of the British position, fearing that if Schreyer's plans are adopted in full, it will not help the knife-edge situation regarding the British public's views on European Union membership.

"I am deeply disappointed and concerned that the proposals will set back our ability to argue a positive European case in the UK," he said.

Patten also reportedly told Schreyer that the plans were "manifestly unfair" and "not the basis for debate."