Joint press conference with Josep Borrell and Jose Manuel Barroso in Brussels

20 December 2005

The PM, discusseed resources to the European Union at a joint press conference held in Brussels.

Read the statement in full below:

Question:

With surprise, I heard today that you were advocating a more rational and more ambitious budget, because during the convention I heard your representative consistently oppose an evaluation of resources and the case for fresh resources to the European Union. Does this now mean that the UK is prepared to consider that the issue of the EU's own resources has to be re-examined and now is the time to discuss for example a Europe tax or some other means of providing those resources?

Prime Minister:

I think now is the time for a fundamental reconsideration of the budget. Now you know what I said back in June was that we had to agree a process as part of the short term finance deal that allowed that greater reconsideration, and the Commission President will now undertake that with his team, and I think that is really important. And the interesting thing about it is that as President Barroso was saying in there, there is the chance mid-way through this financial perspective to have that fundamental reconsideration. Now of course there will be difficult issues that have to be resolved along the way, but the one thing for sure is yes we needed this budget now. Without the budget now Europe would have been in a perpetual state of crisis so that it couldn't discuss the future because it was dealing with the crisis of the present. The point is we have the short term budget deal; but the long term solution - especially with 25 countries sitting round that table - is not to do it as we have just done it; it is to do it in the way that President Barroso has described, and that is a fundamental reconsideration of everything, and let's have a look at it and see what conclusions the Commission come up with. And I am not saying there won't be really difficult decisions in that, but it is absolutely clear to me that you need a rational system of decision making, but also out of that a rational budget in which you decide how much you want to spend, where you are going to spend it, and how the costs of that expenditure are going to be distributed according to wealth and need. That is what a proper budget would look like, that is what a budget usually does look like. And what is very, very clear with enlargement, especially with future enlargement to come, is that this process isn't fit for purpose.

Question:

Prime Minister, when you look back at the media and political reaction to the budget agreement over the last few days in the UK, do you consider that over the last 8 years since you have been in Downing Street you have managed to pull British public opinion at all in a pro-European direction, and if not, why not and do you think it may be a lost cause?

Prime Minister:

If you are complaining about media coverage of Europe, I mean you guys are the media, I am not the media, I am just a politician. But what I would say to you is that at some point or other it would be right in Britain to have a sensible rational debate about Europe. Because the idea that these guys who were sitting in front of me at that session, wanting Britain out of Europe - this in the early 21st century for Heaven's sake - the largest economic market in the world, the biggest political union in the world, and we should get out of it. The idea that that represents any form of sensible future for Britain is absurd. So when you say over these past 8 years is the Euroscepticism in the media still the same, I am afraid that is the bit of the problem I can't affect, you can affect it, I can't. The bit that I can affect is to make sure that we continue to represent the proper interests of Britain, and those interests lie in Britain being good partners in Europe, because that is in our interest. And my view of this is that you know sometimes political leadership is exhibited, not by agreeing with conventional wisdom, which is a very easy thing to do, particularly with the media, but actually by defying it. And I think that if Britain had championed enlargement all these years and then turned around and said, you know we are going to have no budget deal for these countries because we, Britain, aren't going to pay anything towards enlargement, it would have been a completely untenable position for my country and I wasn't going to put us in that position. And you know insofar as anyone is interested, it is perfectly obvious it is a fair deal for Britain because for the first time we have got parity with similar sized countries. You can put that in the FT tomorrow, George, it is about the only place we will get it in.

Question:

A question to the Prime Minister. During the debate almost all heads of group called for an increase in the budget 2007-2013. In your opinion what is the margin for manoeuvre?

Prime Minister:

I think we have got to be clear, as we were saying earlier, there were some countries that were wanting a smaller budget than the one we came out with. So. But the key thing, and I apologise for repeating myself, but it is the absolute essence of seeing what the strategy has been of the Presidency, is to get a short term deal that will be a limited deal, and then in the medium term, mid-way through the next financial perspective, get a proper rational agreement for the future, and that is really where the margin for manoeuvre will come in. Because as I say, I think there is a case for a more ambitious European budget, but only on the basis of a reformed budget.

Question:

I am glad you are defying conventional wisdom today. Would you rule out a Europe tax?

Prime Minister:

Well we have never been in favour of Europe taxes, but whatever method you come out with you have got to raise the money, so the question is what is the best way to raise the money, and that is something also that the Commission can look at. But if you will forgive me, I have got enough on my plate at the moment without arguing for Europe-wide taxes.

Question:

Mr Blair, I was studying the agreement, also with the help of some experts of the Commission, yesterday. It looks like some of the decisions have to be ratified by member states, and one of them is the decision on the rebate. How confident are you that the decision on the rebate, along with the other two that concerned what is called resource-... in French, are going to be ratified in Britain?

Prime Minister:

I think we will ratify it in Britain because it is a fair deal. Look, when I was doing the debate in Parliament yesterday, and as I say this debate is not really reflected in our media anywhere, but it is completely absurd to say that you are in favour of enlargement, to agree that enlargement means the wealthy countries have to transfer the wealth to the poorer countries, but say that France, and Germany, and Spain, and Italy and all the other countries should do that, but we shouldn't. And I felt that I didn't really get an argument back on that issue. For the first time in Britain's history we are going to have a situation in which instead of paying double into the European budget what similar sized countries pay, we will have rough parity. So that is a big advance. But there is no point in us being foolish about this, there is a major change going on in the whole European budget, basically I don't know quite what the amount is Josep, but it is roughly I think half of the structural and cohesion funds are being transferred over to the poorer countries, to the accession countries. So we can't say everyone else is going to make a ... which is why I think when all the sound and fury settles down, people will see that this is a sensible deal for Europe and for Britain that has championed the enlargement in these countries. And I think the interesting thing is when you look at Spain and Ireland particularly over the past 10 - 15 years, have we not, has Britain benefited from their increased growth and prosperity - we have benefited enormously from it, and actually for a relatively small investment of our own money.

Question:

Prime Minister, back on the question of public opinion, there is a new Euro-barometer survey out today on attitudes towards membership of the EU, and approval was already very low in the UK, it is down to 2 points. So I wonder whether you feel that you have failed personally in any way during this Presidency to shift that argument? And if I may ask a question to Mr Borrell, on the budget what sort of room for manoeuvre would you like to see in terms of increasing the size of the budget?

Prime Minister:

Look Steven, let me ask you a question. Do you consider the overall media coverage of Europe to be: a)objective; or b) somewhat partial?

Question:

Our newspaper is very objective.

Prime Minister:

Yes, but I think overall one would have to say it was more likely to be (b) than (a). Now look all I can say is that I continue to fight for a sensible view of Europe. I also think incidentally that it is a mistake that people often make in thinking that British public opinion is just completely irreconcilably hostile to Europe. It is not. I think that underneath as I say all the sound and fury, and look it is not particularly surprising if you are reading in large numbers of papers that we have given up a portion of the rebate and got nothing in return, and that we are paying money for enlargement but no-one else in Europe is, it is not surprising you kind of think that is a bit of a rough deal for Britain. But I actually think that when you get beneath the surface, I think people do understand that it isn't sensible for Britain to separate itself out from Europe in this time, in this era. And you know my job as a political leader is to try to lead, and that is what I have tried to do. And the easiest thing in the world would have been for me to have scuppered the whole financial deal and come back and said you know until everyone did what we want in Europe nothing is going to change and all the rest of it, it wouldn't have advanced Britain's interests at all, in fact if we had ended up with a failure to have a financial deal, I think Britain's interests would have really suffered, suffered with the new member states, suffered with other European partners and suffered because enlargement couldn't work without the new finance deal to make it work. And so in the end, as I say, the issue of the media is your job, not mine; the issue of political leadership is mine and I have tried to all the time through in the 8 years, look in the 8 years I have been Prime Minister of this country, remember I came in in the aftermath of the beef war, and do you remember the beef war? Britain ended up without a single partner it could ever work with in Europe, completely isolated on every issue and without influence. In the last few years, on every single major European issue, we haven't always agreed with our partners, but my goodness we have been at the forefront of the debate, and I actually believe the debate on reform and change is moving our way.

Mr Borrell:

Parliament has not as yet set down a red line, and haven't said yet nothing below such amount. I don't believe that the European Parliament will begin the negotiations having set a red line, a line which cannot be crossed. But can I take advantage of this opportunity to say to the incoming Austrian Presidency, and to the remaining Presidency on the issue of the ... agreement that there are a number of European policies that have been much neglected in the agreement, perhaps they are rather more European policies than national policies, and the Council hasn't ... namely striking a balance between the national interests of all the member states, everyone wants it from their own corner, from their own national interest, and that is only natural. If you take a more pan-European approach, well surely it is for the Parliament to take such a pan-European approach, ... let's have some more money just for its own sake, we will try to structure things in a rather more European way, whilst the Council's approach is far more nationally imprinted and characterised.

Question:

Mr Borrell, the room for manoeuvre that Mr Blair seems to be offering entails restructuring the budget. Having listened to the majority of the groups, do you think that there is a possibility of a conflict between the institutions and Mr Blair, do you have this kind of envelope which you can still negotiate with Parliament, this room for manoeuvre?

Mr Borrell:

Have you got an envelope?

Prime Minister:

Have I got an envelope? I have got a cheque book. Look, first of all I should say that I enjoyed the European Parliament discussion this morning, once I had sort of woken up to the fact that it was going to be a very lively debate, it was interesting to hear the various views that were expressed. But you know I would say in the European Parliament, and I don't know whether you would agree with this Josep, but I think that in the European Parliament there is probably a majority for real reform of the budget. And I think that is quite a hopeful sign actually for the future, because if we can use these next two or three years to develop the right process of debate and consultation about what a new and different budget should look like, then I think something very important will have come out of this Council. And look the issue is very, very simple for Europe at the moment. There was talk about the constitution, and I think as I have often referred to your comment that it was not the text, but the context that was the problem. The context for Europe now could be, having sorted the budget, because if you can't get a budget sorted you have got no credibility to do anything, and that was one of the reasons why it was so important to get agreement. But once you have got agreement on that, there is a very busy agenda now for Europe, and that agenda is about economic reform and change, and this Commission is completely in favour of that, it is about taking forward the further steps of enlargement, it is about dealing with issues like illegal migration and terrorism, which are real security concerns of citizens, and then it is about producing a budget and a structuring of the budget that really meets what people would say is a modern European perspective. And if that happens, I think the whole background to the debate about the constitution changes. And so when you say to me how much is the room for manoeuvre, I think the truth is that whilst you are talking about a budget structured in the way that it is, it is very, very limited, but I think if you are talking about a more rational exercise where the budget represents modern Europe, then I think it is a completely different situation. I am sure you could get people to spend more money on tackling organised crime, or illegal migration, or trying to make sure that we pursue the development goals of Europe, or European defence when it is doing valuable work in different parts of the world, I am sure you can find money to spend on education, or on research and development and innovation. What is more difficult to do is to spend it in the way that it is spent at the moment. So I come back to the point I made in June, we have got to get an immediate deal, we have got an immediate deal because that solves the immediate budget problem, particularly for the new European states, and then you have got to work out the longer term process. And in that it is in my view of great significance that you have a European Parliament that is basically I think up for reform and change, and you have a European Commission that under President Barroso is definitely a reforming Commission. So that gives us a real opportunity. And funnily enough I think in the end the issue on reform is not going to be the Parliament or the Commission, I think the question will be whether the member states and the Council are as up for reform as both of the institutions sitting alongside me now.

Mr Borrell:

Let me say there is the text on the context, we can also say there is the budget on the project, no good budget without a clearly defined project, and perhaps we are talking too much about the budget without having it very clear in mind what kind of project we have. So let's talk much more about the project and then the budget will follow. But if we start saying no more than 1%, there is no logic about that, why 1%, which kind of project is behind this 1%? So the Parliament is in favour of big reform, of course, and I talked to the Council, because you know every time more countries, with every time more different objectives, with the unanimity rule it is almost impossible to get an agreement if everyone only had in mind their ... having divergent objectives being more and more, and with the unanimity rule, it is going to be impossible to reach an agreement, a logical rational agreement in favour of any project. In the end it is a kind of sabotage in order for everybody to be happy and get out of the problem. So the Parliament will very much engage on making a big discussion about the future of the European budget, starting with their own resources, because the Parliament has always been criticised, OK you are after more money, of course, because you are going to have to raise it, because you don't have to tax people. OK, let's talk about that also, perhaps a good thing would be to establish a direct link between the European expenditure on the European taxpayers. So a bigger scenario is open, it is perhaps the most important result of this Council, and let's hope that in future the next budget discussion will be more rational, more based on a common and shared project.