EU Budget Talks Collapse

France Rejects Compromise; Still Time to Snatch Defeat From Jaws of Victory

I have a bit of good news today. The efforts of European Council president Herman Van Rompuy to mollify the UK and other budget hawks have created such a stir that France rejects EU budget compromise.

Jean-Marc Ayrault, the French prime minister, objected to deep cuts to agriculture spending included in the proposal, but also expressed displeasure with reductions in the development money, known as cohesion funds, that benefit poorer regions.

The biggest object of displeasure appeared to be Mr Van Rompuy’s move to trim €25bn from the common agricultural policy – traditionally France’s biggest priority – compared with a proposal from the European Commission, the EU’s executive arm. Those cuts include a €12bn reduction in direct subsidies to farmers.

Some analysts argue the cull was even more dramatic because agriculture was starting from a low base – historically speaking – in the commission proposal.

Agriculture is not France’s only concern. Cuts to the cohesion budget look set to fall disproportionately on its own regions, which tend to be bastions of support for François Hollande, the socialist president.

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