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BELGIUM: EU leaders say 50/50 chance to get a budget deal as presidency holds a series of bilaterals before talks BELGIUM: EU leaders say 50/50 chance to get a budget deal as presidency holds a series of bilaterals before talks.

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European Union (EU) leaders began a day of tough bargaining on Friday (December 16) to overcome differences on the bloc's long-term budget. Many saw a deal as an impossible task, others were more optimistic but in general, most looked at the United Kingdom to yield some ground on its rebate. "Today is the day and I hope there will be ambition and responsibility. I call on all leaders to show ambition and responsibility. It is now clear that the costs of a non agreement would be too high," said European Commission President who this week accused Britain of ignoring the wishes of the 25-nation bloc by failing to recognise the need to properly finance enlargement. "But one thing I'd like to say to our British friends is: 'you have invested a lot in this enlargement you want an enlarged Europe and an enlarged Europe needs..This is about making an enlarged Europe work, allowing it to work," he urged Britain. The EU president Britain, which is due to set out a new proposal trying to reconcile new, ex-communist east European states' demands for more aid with its own determination to cling to its cherished rebate from Brussels' coffers. So far London has offered 8 billion euros off its refund to contribute towards the cost of the EU's eastward enlargement but France insists a fair British share would be 14 billion euros. Most other countries want Britain, now among the wealthiest EU states, to cede more. But Blair has linked any further cut to an overhaul in EU farm subsidies, which benefit French farmers most, before the 2007-13 budget period ends. France says farm spending must remain unchanged until 2014. Sweden urged Britain not to fight too strongly for its corner. "Neither the British nor others can come back home with a bad deal we must remember that. Now there is pressure to come to a deal, and I am in favour of that, of course, but we must still remember there are conflicts that has to be solved, we need more modern budget in Europe and in return we need a reduction of the British rebate, it's about that," Swedish Prime Minister Goran Persson said. He added that new member states also had a lot to lose by rejecting a deal referring to Poland's alliance with France in rejecting the second British proposal. Failure to reach a deal would damage the credibility of the bloc, already reeling from its failure to agree a proposed EU constitution earlier this year -- and from bitter recriminations after an abortive attempt to agree a budget in June. It would also prevent the new member states from using the hefty funds available to modernise their economies and bring them into line with their wealthier western cousins, a position that adds to the sense of urgency. "Everyone has very firm positions but I don't think its likely that the new member states in the end should say no to a good deal because they would have a deal, nevertheless, how it would look like, it would be much much better than the present situation," Persson said. British Foreign Minister Jack Straw said there was a heavy responsibility on Britain which had to put its own interests forward as well as acting as presidency broker. "There is a heavy responsibility on the United Kingdom as presidency. But its in the nature of these negotiations that we all talk about solidarity and solidarity inside the European Union is very important but for every member state they have to also take full account of their national interests and this is what makes these negotiations interesting. Twenty five are difficult." Germany, the bloc's traditional paymaster, has been among those country's most optimistic about the chances of a deal. But Chancellor Angela Merkel sounded less upbeat as she arrived. "We need to take account of our own interests and this means that, as a large net contributor, we have to be responsible with our money and we also have to take account of our own wishes, especially when it comes to the new German regions (eastern German regions). Secondly, we are able to be a good partner in negotiating but we cannot give too much away," German Chancellor Angela Merckel said. Straw said a new British proposal would come only after a series of one-on-one talks during the morning to try to find new room for manoeuvre. Other agenda items, such as Macedonia's entry hopes and a deal on value added tax on the EU services sector, have been put aside to give budget talks more time. The wrangling hinges on how much EU countries are prepared to pay to fund the integration of 10 new members which joined last year, mostly poor ex-communist eastern European countries. Blair is under pressure to yield on the rebate won by his predecessor Margaret Thatcher in 1984 to reflect the fact that Britain, then the EU's second poorest member, benefited little from farm subsidies. Among other issues on the table besides the British rebate and French agricultural subsidies were VAT rates Finance ministers failed last week to agree new VAT rules because of German opposition. Nine member states - Belgium, Greece, Spain, France, Italy, Luxembourg, the Netherlands, Portugal and the UK - currently apply reduced VAT rates to sectors as diverse as construction and hairdressing. Belgian caterers demonstrated outside the Council calling for VAT calling for lower VAT rates. The reduced rates were introduced six years ago as an experiment to boost employment, and have already been extended twice. The European Commission says the job boosting plan has not worked, but a rise in VAT could trigger job losses. . Under an arrangement that expires on Dec. 31, Belgium, Greece, Spain, France, Italy, Luxembourg, the Netherlands, Portugal and Britain apply lower VAT rates to labour-intensive services than the minimum EU level of 15 percent. UK Finance Minister Gordon Brown and others voiced hope that a deal on VAT could be struck at the EU summit on December 15, but German Finance Minister Peer Steinbrueck made it clear Berlin would not change tune easily.

Reference: 17554/05

Tape: 11063

Timecode: 17:23:04:17 - 17:27:31:09

Duration: 00:04:26:17 sec.

Sound: NATURAL WITH GERMAN AND ENGLISH SPEECH

Copyright: REUTERS

Restrictions: NONE


17:23:04:17 - 17:23:31:10 REUTERS


BN10) BRUSSELS, BELGIUM (DECEMBER 16, 2005) (REUTERS) VARIOUS OF (SOUNDBITE) (English) EUROPEAN COMMISSION PRESIDENT JOSE MANUEL BARROSO, STEPPING OUT OF CAR AND SAYING: "Today is the day and I hope there will be ambition and responsibility. I call on all leaders to show ambition and responsibility. It is now clear that the costs of a non agreement would be too high.

17:23:31:10 - 17:23:34:20 REUTERS


REPORTERS AND CAMERAS ON THE OTHER SIDE

17:23:34:20 - 17:23:57:04 REUTERS


CLOSE OF (SOUNDBITE) (English) BARROSO SAYING: "But one thing I'd like to say to my British friends is the following: 'you have invested a lot in this enlargement, you want an enlarged Europe and an enlarged Europe needs additional resources,' so this is about making an enlarged Europe work, allowing it to work."

17:23:57:04 - 17:24:08:20 REUTERS


FRENCH PRESIDENT JACQUES CHIRAC ARRIVING AND ENTERING BUILDING WITHOUT SAYING ANYTHING

17:24:08:20 - 17:24:16:10 REUTERS


BRITISH PRIME MINISTER TONY BLAIR ARRIVING, NOT SAYING ANYTHING

17:24:16:10 - 17:24:41:22 REUTERS


CLOSE OF (SOUNDBITE) (English) SWEDISH PRIME MINISTER GORAN PERSSON SAYING: "Neither the British nor others can come back home with a bad deal we must remember that. Now there is pressure to come to a deal, and I am in favour of that, of course, but we must still remember there are conflicts that has to be solved, we need a more modern budget in Europe and in return we need a reduction of the British rebate, it's about that."

17:24:41:22 - 17:24:49:20 REUTERS


VARIOUS OF PERSSON WALKING TO THE OTHER SIDE TO TALK TO MORE REPORTERS

17:24:49:20 - 17:24:53:18 REUTERS


WIDE OF ANOTHER CAR DRIVING IN

17:24:53:18 - 17:25:11:07 REUTERS


SIDE VIEW (SOUNDBITE) (English) SWEDISH PRIME MINISTER GORAN PERSSON SAYING: "Everyone has very firm positions but I don't think its likely that the new member states in the end should say no to a good deal because they would have a deal, nevertheless, how it would look like, it would be much much better than the present situation."

17:25:11:07 - 17:25:25:02 REUTERS


VARIOUS OF BRITISH FOREIGN MINISTER JACK STRAW ARRIVING AND WALKING OVER TO MEDIA

17:25:25:02 - 17:25:47:01 REUTERS


CLOSE OF (SOUNDBITE) (English) BRITISH FOREIGN MINISTER JACK STRAW SAYING: "There is a heavy responsibility on the United Kingdom as presidency. But it's in the nature of these negotiations that we all talk about solidarity and solidarity inside the European Union is very important but for every member state they have to also take full account of their national interests and this is what makes these negotiations interesting. Twenty five are difficult."

17:25:47:01 - 17:25:50:11 REUTERS


WIDE OF MEDIA

17:25:50:11 - 17:25:57:14 REUTERS


SPANISH PRIME MINISTER JOSE LUIS ZAPATERO ARRIVING, NOT SAYING ANYTHING TO MEDIA

17:25:57:14 - 17:26:06:05 REUTERS


VARIOPUS OF ANGELA MERCKEL, GERMAN CHANCELLOR, ARRIVING AND SAYING GOOD MORNING TO MEDIA

17:26:06:05 - 17:26:08:09 REUTERS


CLOSE OF CAMERAS

17:26:08:09 - 17:26:40:13 REUTERS


CLOSE OF (SOUNDBITE) (German) ANGELA MERCKEL, GERMAN CHANCELLOR, SAYING: "We need to take account of our own interests and this means that, as a large net contributor, we have to be responsible with our money and we also have to take account of our own wishes, especially when it comes to the new German regions (eastern German regions). Secondly, we are able to be a good partner in negotiating but we cannot give too much away." MERCKEL WALKING AWAY

17:26:40:13 - 17:26:46:10 REUTERS


WIDE OF POLISH PRIME MINISTER KAZIMIERZ MARCINKIEWIECZ ARRIVING/ WALKING INTO BUILDING

17:26:46:10 - 17:26:59:05 REUTERS


ITALIAN PRIME MINISTER SILVIO BERLUSCONI ARRIVING AND LOOKING WORRIED, WALKING INTO BUILDING

17:26:59:05 - 17:27:02:14 REUTERS


CLOSE OF DEMONSTRATOR BEATING A PAN TO PROTEST AGAINST VAT (VALUE ADDED TAX)

17:27:02:14 - 17:27:06:14 REUTERS


VAT DEMONSTRATORS HOLDING BANNERS READING '6 PERCENT'

17:27:06:14 - 17:27:10:06 REUTERS


WIDE OF POLICE IN FRONT OF DEMONSTRATORS

17:27:10:06 - 17:27:13:19 REUTERS


WIDE OF BANNER SHOWING '6 PERCENT'

17:27:13:19 - 17:27:17:23 REUTERS


CLOSE OF SIGN READING ' TOO MUCH VAT KILLS' (French) AND 'LESS VAT OR DEATH' (Flemish)

17:27:17:23 - 17:27:22:12 REUTERS


WIDE OF EXTERIOR EUROPEAN COUNCIL

17:27:22:12 - 17:27:26:20 REUTERS


WIDE OF POLICE OUTSIDE THE BUILDING

17:27:26:20 - 17:27:31:09 REUTERS


WIDE OF FLAGS INSIDE THE COMMISSION

ENDS 17:27:31:09

Feed: News

Syndication: WORLD3-DEC16-BELGIUM-(R)EU ARRIVALS WORLD3: STORY 531

Category: European Union

17:23:04:17 - 17:23:31:10 REUTERS


BN10) BRUSSELS, BELGIUM (DECEMBER 16, 2005) (REUTERS) VARIOUS OF (SOUNDBITE) (English) EUROPEAN COMMISSION PRESIDENT JOSE MANUEL BARROSO, STEPPING OUT OF CAR AND SAYING: "Today is the day and I hope there will be ambition and responsibility. I call on all leaders to show ambition and responsibility. It is now clear that the costs of a non agreement would be too high.

17:23:31:10 - 17:23:34:20 REUTERS


REPORTERS AND CAMERAS ON THE OTHER SIDE

17:23:34:20 - 17:23:57:04 REUTERS


CLOSE OF (SOUNDBITE) (English) BARROSO SAYING: "But one thing I'd like to say to my British friends is the following: 'you have invested a lot in this enlargement, you want an enlarged Europe and an enlarged Europe needs additional resources,' so this is about making an enlarged Europe work, allowing it to work."

17:23:57:04 - 17:24:08:20 REUTERS


FRENCH PRESIDENT JACQUES CHIRAC ARRIVING AND ENTERING BUILDING WITHOUT SAYING ANYTHING

17:24:08:20 - 17:24:16:10 REUTERS


BRITISH PRIME MINISTER TONY BLAIR ARRIVING, NOT SAYING ANYTHING

17:24:16:10 - 17:24:41:22 REUTERS


CLOSE OF (SOUNDBITE) (English) SWEDISH PRIME MINISTER GORAN PERSSON SAYING: "Neither the British nor others can come back home with a bad deal we must remember that. Now there is pressure to come to a deal, and I am in favour of that, of course, but we must still remember there are conflicts that has to be solved, we need a more modern budget in Europe and in return we need a reduction of the British rebate, it's about that."

17:24:41:22 - 17:24:49:20 REUTERS


VARIOUS OF PERSSON WALKING TO THE OTHER SIDE TO TALK TO MORE REPORTERS

17:24:49:20 - 17:24:53:18 REUTERS


WIDE OF ANOTHER CAR DRIVING IN

17:24:53:18 - 17:25:11:07 REUTERS


SIDE VIEW (SOUNDBITE) (English) SWEDISH PRIME MINISTER GORAN PERSSON SAYING: "Everyone has very firm positions but I don't think its likely that the new member states in the end should say no to a good deal because they would have a deal, nevertheless, how it would look like, it would be much much better than the present situation."

17:25:11:07 - 17:25:25:02 REUTERS


VARIOUS OF BRITISH FOREIGN MINISTER JACK STRAW ARRIVING AND WALKING OVER TO MEDIA

17:25:25:02 - 17:25:47:01 REUTERS


CLOSE OF (SOUNDBITE) (English) BRITISH FOREIGN MINISTER JACK STRAW SAYING: "There is a heavy responsibility on the United Kingdom as presidency. But it's in the nature of these negotiations that we all talk about solidarity and solidarity inside the European Union is very important but for every member state they have to also take full account of their national interests and this is what makes these negotiations interesting. Twenty five are difficult."

17:25:47:01 - 17:25:50:11 REUTERS


WIDE OF MEDIA

17:25:50:11 - 17:25:57:14 REUTERS


SPANISH PRIME MINISTER JOSE LUIS ZAPATERO ARRIVING, NOT SAYING ANYTHING TO MEDIA

17:25:57:14 - 17:26:06:05 REUTERS


VARIOPUS OF ANGELA MERCKEL, GERMAN CHANCELLOR, ARRIVING AND SAYING GOOD MORNING TO MEDIA

17:26:06:05 - 17:26:08:09 REUTERS


CLOSE OF CAMERAS

17:26:08:09 - 17:26:40:13 REUTERS


CLOSE OF (SOUNDBITE) (German) ANGELA MERCKEL, GERMAN CHANCELLOR, SAYING: "We need to take account of our own interests and this means that, as a large net contributor, we have to be responsible with our money and we also have to take account of our own wishes, especially when it comes to the new German regions (eastern German regions). Secondly, we are able to be a good partner in negotiating but we cannot give too much away." MERCKEL WALKING AWAY

17:26:40:13 - 17:26:46:10 REUTERS


WIDE OF POLISH PRIME MINISTER KAZIMIERZ MARCINKIEWIECZ ARRIVING/ WALKING INTO BUILDING

17:26:46:10 - 17:26:59:05 REUTERS


ITALIAN PRIME MINISTER SILVIO BERLUSCONI ARRIVING AND LOOKING WORRIED, WALKING INTO BUILDING

17:26:59:05 - 17:27:02:14 REUTERS


CLOSE OF DEMONSTRATOR BEATING A PAN TO PROTEST AGAINST VAT (VALUE ADDED TAX)

17:27:02:14 - 17:27:06:14 REUTERS


VAT DEMONSTRATORS HOLDING BANNERS READING '6 PERCENT'

17:27:06:14 - 17:27:10:06 REUTERS


WIDE OF POLICE IN FRONT OF DEMONSTRATORS

17:27:10:06 - 17:27:13:19 REUTERS


WIDE OF BANNER SHOWING '6 PERCENT'

17:27:13:19 - 17:27:17:23 REUTERS


CLOSE OF SIGN READING ' TOO MUCH VAT KILLS' (French) AND 'LESS VAT OR DEATH' (Flemish)

17:27:17:23 - 17:27:22:12 REUTERS


WIDE OF EXTERIOR EUROPEAN COUNCIL

17:27:22:12 - 17:27:26:20 REUTERS


WIDE OF POLICE OUTSIDE THE BUILDING

17:27:26:20 - 17:27:31:09 REUTERS


WIDE OF FLAGS INSIDE THE COMMISSION

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