Press conference with the Prime Ministers of Estonia, Lithuania and Latvia

2 December 2005

Tony Blair has met with the Prime Minister of Estonia, Mr Andrus Ansip, the Prime Minister of Lithuania, Mr Algirdas Brazauskas and the Prime Minister of Latvia, Mr Aigars Kalvitas for talks on the EU budget.

Read the press conference:

Mr Andrus Ansip:

Dear colleagues, Ladies and Gentlemen. It is a great pleasure hosting my colleagues from the United Kingdom, from Latvia and Lithuania here at Stenbock House today. The main issue under discussion today was of course the next financial perspective. Overall we had very fruitful discussions today, now I hope the Presidency will better understand our positions, and we or the Baltic States, we got more information about the Presidency's latest proposal.

We, the three Baltic States, would like to have the next financial perspective as soon as possible. If we will not get the next financial perspective very soon, we will have a lot of problems in the year 2007. We need some time for preparations. But we cannot agree with every kind of financial perspective. We would like to have a good, a very good financial perspective. Every member state of the European Union has been satisfied, has felt comfortable in themselves with their new financial perspective. This financial perspective has been based on the principles of solidarity. We would like to get a very modern financial perspective. Enlargement was, and still is, and I hope it will be in future also so that enlargement is a very successful, the most successful project of the European Union in history. And the next financial perspective has to support enlargement also.

We are still awaiting the whole financial perspective for the whole proposal, and we hope to get this proposal on Monday. We will support the Presidency to have to prepare this financial perspective. But now I would like to ask the Presidency to say some words.

Prime Minister:

Thank you Andrus, and thank you very much indeed for welcoming me here to Tallinn, to Estonia, and to say thank you to your colleagues for what has been a very good and useful meeting.

Now I hope you will forgive me if I don't go into the details of the proposal that we will put down early next week, but I just wanted to say one or two things about the importance of the negotiation we are about to have. The reason why this is important is that for those new European countries, those that have come into the European Union, they need to have the certainty that comes from a budget agreement, they need to be able to access the European money, they need to be able to plan ahead on the basis of the money that they have, and the principal reason frankly why I am going to do my best to reach an agreement on the financial perspective is because of these people, is because we have always supported and championed enlargement and we want to make it work.

There is no desperate and urgent reason in many ways for a country like Britain to reach the financial perspective deal now, but there are I think very good reasons why you need to have this agreed so that you can plan ahead properly. And I said when I was speaking earlier today in the Ukraine, that there are really two types of agreement that we can reach here, and there is a meeting coming up this weekend of the G7 Finance Ministers, which now will also include India, and Brazil, and China and South Africa, which has relevance to this question too. Essentially our view very clearly is that the best deal the European Union could have, as I said in June in my address to the European Parliament, is one in which there is a fundamental recasting of the European budget, so that we spend in the future on the things that are really going to make the difference to our countries' dynamism, innovation and prosperity for the future.

A major part of that obviously is reform of the agricultural policy, and it is the existence of that policy that is of course the primary reason for the existence of the British rebate, which is why, as you will know, the two are always talked of together. Now I hope very much, as part of an overall agreement on world trade, where we desperately need, our industry and our service industries need to bring these tariff barriers down in order to be able to boost our industrial and economic success, I hope we are able in that world trade round negotiation to have a much bolder and more ambitious meeting in Hong Kong than is at present envisaged.

Now if we can, then that opens up the possibility of a radical perspective for the financial perspective as well for the European Union, because then we will be talking about a true and radical reformation of the European budget. If we can't, then we are in a situation where it is still important obviously particularly for the accession countries, for the new European countries, to have the budget agreed in the European Union. In those circumstances, as I said earlier in the Ukraine today, it will be at a smaller overall budget level, but it is important that we have the possibility to review the European budget again mid-way through the financial perspective.

So I won't, as I say, go into further details about this now because obviously this is something that we need to discuss, and discuss in a sense between us, all the countries of the European Union, and discuss in the context of the formal proposals that we table. But I do want to reiterate again that it is our desire, if we possibly can, to reach agreement at the December Council. But as Andrus has just said, quite rightly, it has got to be the right deal - the right deal for you, the right deal for us, the right deal for the whole of the European Union.

I think that is really all I would like to say at this stage, except thank you again.

Question:

Is there a Plan B, Prime Minister Blair, if this idea of yours which has been talked about, and which details you are not going to tell us, is there a Plan B if it is not accepted by the Eastern European countries?

Prime Minister:

A Plan B, and a Plan C, and a Plan D, and you could work your way down the alphabet. Look the important thing is to recognise what is our key strategic objective for all of us - it is to get the budget agreed so that Europe can move forward. Now as I say at the present time we have not been able to reach agreement, and actually there was not just Britain, there were I think six countries at the European Union summit in June who were not able to reach an agreement. Why is it so important to try and reach an agreement in December? Precisely because countries like Estonia, but also the other new members of the European Union, need the certainty that comes from a budget deal. So I am not at the stage yet of talking about Plan B, or Plan C, or even further plans, I am simply at the stage at the moment of seeing whether it is possible to make our way in this. And as I indicated to my colleagues, I think once we have had the discussions on the basis of the formal proposal next week, then probably towards the end of the week we can make an assessment of whether there is a sufficient possibility of agreement to move forward and to try and get it done in December.

Question:

A question to Prime Minister Blair. According to what is supposedly the EU Presidency's EU budget proposal, it seems that it leaves everyone more or less happy in the old member countries, I mean Britain keeps it rebate, and France keeps its farm subsidises, and it seems that those who are left out in the cold are the new member countries who are in the weakest money position here. Is that a fair approach, Prime Minister?

Prime Minister:

Well again, without going into the details of this, let me tell you that anything that is agreed will mean that countries like Britain carry on being major net contributors and the new countries will be major net beneficiaries. But I just wanted to pick up on one point that you made. I think, and this is why I think it is important that whatever deal that we do includes the prospect of a review mid-way through the next financial perspective, it is important in the end that we get to a more rational way of calculating the European Union budget. If you look at any of our countries, not just the new members, but Britain as a country, our future is going to lie in the knowledge economy, in developing science, and technology, and education, in research and development, in all the things that frankly Europe should be collaborating on and doing more on. And that is why one essential part of this is at least to be able to see, if we can't get it agreed now, to see a pathway into the future where we can get a more rational budget.

Question:

First to the Estonian Prime Minister, since you seem to be the spokesman for your Baltic counterparts. Can you just say bluntly, do you see this proposal that Mr Blair brought today, something that you can work with? If you are not 100% happy with it, is it something worth pursuing? And secondly for Mr Blair, I get the impression that over the past months you have been using the financial perspectives issue, the rebate more precisely, as a bit of a lever to make the French, if you don't mind, come to their senses on farm subsidies. You seem to be giving up on that now. Do you think with the G7 meeting this weekend, with the WTO coming up in Hong Kong, that the French position is simply untenable? If they won't cave in now in return for the rebate, they will have to cave in later on the farm subsidy issue.

Mr Ansip:

Thank you. I am happy that we started with negotiations again. It will be not good to say no in the very good beginning. If we will say no in the very beginning, we will not get the next financial perspective in December. We have to go on with the negotiations, but solidarity is important for us. We hope that Estonia will develop very quickly. Our growth is now 10% per year, our exports are growing, more than 28% per year, the number of tourists visiting Estonia is growing rapidly from the United Kingdom, more than 120% per year, the unemployment rate was just 5 years ago 14%, now it is 7%. Things are going on here in Estonia. We hope that we will stay as net payers in the European Union. But now solidarity means for us that rich countries, they have to help those countries who are still not so rich. I am not 100% happy with the ideas of the proposal we don't have yet, because it seems for us that only the new member states, they have to pay to find consensus, but I know that people in the United Kingdom, they will feel that only they have to pay to find consensus. It is not a good feeling. I think that it is not a good feeling for Estonians, it is not a good feeling for British people also. Every country has to give its contribution to find a very good solution. We have to go on with the negotiations, and I am looking forward quite hopefully.

Prime Minister:

On the points that you raise, Robert, first of all this is not just a problem in relation to France, but many other countries share this perspective. And I have always said incidentally that we can never change overnight the Common Agricultural Policy, that is not the issue, the issue here is how do we, over time, get to a more rational budget and a more rational position that helps our own industry? And the reason why the World Trade Organisation talks are so important, and the reason why we are holding this meeting this weekend, is because if we get a good deal at the World Trade Organisation, that is good for the very poorest countries in the world who desperately need access to the wealthy countries' markets, it is good for the emerging economies like China, and India, and Brazil, and it is good also for countries in Europe and America, the vast bulk of whose industry and business is not in agriculture. And therefore if we were able to unlock the World Trade Organisation deal so that Europe moved on agriculture, and on tariffs, Brazil, and India and other countries moved on non-agricultural market access, and the United States played its part, both on agriculture and on industry, Japan too, if we got those major countries working together, we would all be more prosperous. And what is more then, in the European Union, we could have a budget that would be aligned with the actual interests of the EU. So I have not given up on this at all, all I am saying is that we would, as it were, leave this whole issue until it could be resolved, except for the fact that for these countries - for the Baltic countries, but also the other countries I will be seeing later today and tomorrow - they need some certainty on the EU budget. And that is why it is important that we are trying to do this. And of course Britain has always said, and we will pay our fair share of enlargement, of course we should do that, but the relationship between the rebate and the Common Agricultural Policy is fundamental. So as the Prime Minister has just rightly said, look in any such negotiation, Estonia has got to be happy with its interest, Latvia and Lithuania too, and the UK as well, but I think at the very least what we have found here is a desire at least to see whether it is possible to reach agreement or not, and I think that is important.

Question:

As both of you mentioned, one of the great successes, you said, of the European Union was expansion and the idea of solidarity, but this kind of budget that is obviously raising, to say it mildly, discontent amongst the new members, because they are bearing the brunt of potential cuts, that doesn't do much for solidarity and countries that are seen as your partners in their vision for the future of Europe.

Prime Minister:

Well this is exactly the point, and that is why it is important that if possible we get to a budget deal that actually sorts out all the issues to do with the European Union budget. All I am saying to you is that if we can't do that, then we have got to look at how we get a budget deal that gives accession countries the certainty that they need. And I would make one other point to you which I think is important. Obviously there will be some intensive negotiations over the next few days, but we championed enlargement in Britain, we believed that what the new members have brought into the European Union has been important, it has been distinctive and it has been positive for the European Union, so we will have that well in mind over the discussions in the next few days.

Question:

Can we make it clear, are you making proposals, you have talked in the Ukraine about the need possibly for a smaller EU budget, does that mean smaller cuts, does it mean cuts to aid money, fund money to the Baltic states and the new EU states which joined last year?

Prime Minister:

Well as I have just said Patrick, I think you will have to wait until we put the formal negotiations down, and there will no doubt be very intensive negotiations over the next few days, but it has got to be a deal that is obviously satisfactory for everybody, for the new member states, but also for countries like ours that are going to be major, major, net contributors on any basis at all.