21st Jun 2021

Germany holds key to EU budget deal, conservatives say

European conservative party leaders said Germany holds the key to unlocking a budget deal at Thursday (15 December) and Friday's EU summit in Brussels.

"Merkel is an important actor", Luxembourg prime minister Jean Claude Jucker said, indicating that she will be a major mediator in the talks.

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  • Merkel (left) has less money in the pot due to the limping German economy (Photo: SIG-Information Service of the French Government)

The debate has so far been characterised by deep disagreements between the UK, France and Poland over spending cuts and the UK rebate.

"Everyone now wants a deal", Mr Juncker added.

German conservative (CDU) finance expert Peter Hintze said "Europe is waiting for Angela Merkel."

EUobserver picked up the remarks at an EPP congress in Meise, outside Brussels, on Thursday afternoon.

The congress brought together 13 European leaders, including Germany, Italy, the Netherlands, Luxembourg, Slovakia and Greece.

Merkel enigmatic

For her part, Ms Merkel continued to play her cards close to her chest, commenting she does "not want an agreement at any price" and that she expects "tough negotiations" tonight.

German MEP Hans Gert Pottering, the leader of the conservative group in the European Parliament, gave the summit a 50/50 chance of success.

He said talks will revolve around the UK rebate which "should be substantially cut down."

Mr Pottering sketched out a potential scenario where France and the UK agree to scrap completely the UK rebate in 2008 or 2009 "in the context" of changes to the common agricultural policy.

Commenting on the importance of a positive summit outcome, Austrian chancellor and incoming EU president Wolfgang Schussel said the talks will lead to "a united Europe or a divided Europe."

Germany in unique position

Analysts agree that Berlin is in a good position to mediate between Paris and London, having warm relations with both in contrast to the well-known personal enmity between UK leader Tony Blair and French president Jacques Chirac.

Germany is the biggest contributor to the EU purse, with net payments of €8 billion in 2003 compared to the UK's €3 billion and France on €2 billion.

But Germany pays far less into the UK rebate (€350 million in 2004) than France (€1.5 billion) under a complex "rebate on the rebate" deal dating back to 1984.

The EU has in the past been called a "French project paid for by Germany."

But after the expensive German reunification in 1990 and with weak economic growth today, Ms Merkel has less cash to throw at EU problems than her predecessors.

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