Pressure for change UK rebate

there has been growing pressure in recent years various eu member states rebate scrapped. partly because recent additional member states of eu, considerably poorer fifteen pre-2004 states, considerable expense on cap , eu budget in general. view put forward many makes uk rebate harder accommodate within eu budget, leveraged moral argument new entrants substantially poorer uk. new entrants, however, net recipients of eu funds , not net contributors uk , germany make larger contribution these poorer entrants.

the rebate distorts uk funding negotiations eu. normally, countries , independent agencies within each country bid receive central eu funds. uk government aware two-thirds of eu funding in effect deducted rebate , come out of uk government funds. uk has one-third incentive apply eu funds. other countries, contributions budget not affected funds receive back, have no incentive moderate requests funds.

furthermore, many eu grants conditional on recipient finding proportion of funding local sources, national or local government. increases proportion coming uk government revenue further. has effect of artificially reducing eu expenditure returning uk , worsening deficit rebate intended redress.

the british government has resisted campaigns abolish rebate , uk has veto on decision eu so. former prime minister tony blair said veto attempt scrap rebate. supported many in cabinet , main opposition party, conservatives, majority of british public. supporters of rebate argue distortion created rebate minor compared created common agricultural policy, expensive , has implications free , fair trade in eu. in addition, point out without rebate, uk pay more eu comparably wealthy countries france, due structural differences between economies.

as of 2004, france gets more twice cap funds uk (22% of total funds compared uk s 9%) in cash terms net benefit france gets on , above uk gets cap of €6.37bn. in comparison, uk budget rebate 2005 scheduled approx €5.5bn. agricultural expenditure new member states included in other segment of graph. limited in 2004 25% of payment rates applying existing member states, rising 30% in 2005 , 100% in 2013. total cap expenditure capped, in absence of further changes, payments pre-2004 member countries fall 5% on period. commentators claim large extent, france gets twice cap payment received uk because has twice amount of farmland, although extent there correlation between 2 disputed.

the underlying reason why uk insists on retaining rebate if reduced no change cap, in view uk subsidising inefficient french farming sector. however, france remains net payer eu budget, contributing €9.05 billion more received in 2013.

if rebate removed without changes cap uk pay larger net contribution france. uk make net contribution of approximately €10bn compared current contribution of €3.86bn, versus current french net contribution of €6.46bn. germany has gdp approximately 25% higher either france or uk, per capita income comparable other 2 countries. france technically makes net contribution eu budget twice of uk, , greatest contributor towards uk rebate, means benefit abolition. should noted if france not required contribute towards rebate still contribute more eu budget uk.

these contrasting positions led deadlock @ june 2005 eu budget negotiations in brussels. france , other states demanded abolition of uk rebate @ meeting. britain dismissed diplomatic manoeuvre france save face after rejection of european constitution in referendum 2 weeks before meeting. uk made cap reform prerequisite of removal of rebate, proposal opponents rejected. negotiations ended without agreement being reached. in december 2005 uk prime minister tony blair agreed give approximately 20% of rebate period 2007–2013, on condition funds did not contribute cap payments, matched contributions other countries , new member states. spending on cap remained fixed, had been agreed. overall, reduced proportion of budget spent on cap. agreed european commission should conduct full review of eu spending.

the planned withdrawal of uk eu has led renewed discussion of scrapping of rebates, european commissioner budget , human resources günther oettinger stating want propose budget framework not without mother of rebates [the u.k.’s] without of children .