Cause and Effect in European Politics and Law

The British rebate

Adelina Marini, June 16, 2005

Probably when "the rebate which Britain has in the European Union" is mentioned or "the British rebate", this is being understood only by a handful of people, familiar with the issue. This is why I am offering you quotes from the book of the more popular as the "Iron Lady" former British prime minister Margaret Thatcher, who negotiated the famous rebate, as well as the opinion of Trade Commissioner Peter Mandelson. Here is what Margaret Thatcher writes in her book Statecraft, as translated from Bulgarian:

"It is often said that the roots of the European project should be sought in the determination of some politicians and philosophers in the post-war period of continental Europe to build a supranational structure, that would make future wars impossible. I want to emphasize that the impulse to create a super state did not ensue only from the wish to avoid war in Europe. It is much older".

Further on, the former British premier recalls Napoleon's attempts to rule over Europe, and Hitler's too, etc. I chose this quote because it clearly illustrates the character of British politics for centuries. Many historians and analysts love to call such a statecraft behaviour "the politics of island states". To this quote I will oppose the statement of EU Trade Commissioner Peter Mandelson, also a British, according to whom "Europe should continue forward with painful economic reforms. The reforms, however, have a very clear goal - not to americanise Europe, but to make our European social model sustainable for the future generations".

According to Mandelson the real problem of Europe is that there is no consensus on the issue what is Europe and where it is heading to. Here, you know, people are being divided into federalists and supporters of a more fragile, more or less an economic union. These two examples are eloquent enough to show how difficult it is to use the term "solidarity" only 50 years after the end of colonialism, because it is solidarity that is the foundation of the European union and its common policies - the richer countries to help the poorer, until a cohesion is reached against the backdrop of all the other pressing tasks in the global agenda.

So, what is the rebate? In the words of Lady Thatcher in the already mentioned book, in the 80s Britain was on its way to turn into the biggest financial donor of the European community. After long and exhausting negotiations at the summit in Fontainebleau the agreement for a reduction of British contribution is announced. Now London has the right to get back roughly one third of its financial contribution. The total amount of the money returned for the period 1985-2000 is 28bn pounds.

Many are the points of view for or against further integration of the European Union. This is why this European Council is loaded with a lot of expectations that, if anything, at least Europe's agenda will be set not just for the upcoming months but for the years to come. Last night the Presidency made its 11th in a row proposal to Britain for a freezing of the British rebate at an average level, as it was during the 7-year period before last year's enlargement of the Union. Luxembourg's Prime Minister Jean-Claude Juncker offers the issue of the rebate to be reopened in 2013, when the next seven-year period will be debated.

Britain, as expected, rejected the proposal its rebate of 3.2bn euro to be frozen. Now it is certain that the dispute on the budget of the Community for the next seven years will be extremely heated. London has already made it clear that it is ready to veto the entire budget after it takes over the Presidency from July 1st. According to The Guardian, however, government sources from Downing Street 10 were severely irritated by the fact that the proposal was made during a face to face meeting between Blair and Juncker and that the British PM informed them about his decision to reject it. In their words, this will return Britain in the era of Thatcherism.

In the same time, as The Guardian writes, French President Jacques Chirac will also be not very comfortable with the issue, as he is subjected to increasing pressure to accept a reduction of France's agriculture subsidies, amounting 4.2bn euro, so that the farmers of Romania and Bulgaria could be financed, as it is expected the two countries to join the Union in 2007. As you know, we and the Romanians have been omitted from the calculations for the agriculture subsidies when they were negotiated in 2002. Unfortunately, the Premier of Luxembourg, who is a very experienced diplomat, last night gave up and expressed confidence that an agreement on the Union's financial perspectives will not be reached at this European Council. According to other diplomats, though, there will be no agreement in the next six months, as Britain will take over the EU Presidency and therefore will never give up its rebate, while there is no other source for money.