Warning over EU rebates

France yesterday urged Germany to drop its campaign to secure a big reduction in its net contribution to the European Union budget, warning it could derail the re-ordering of Europe's finances essential for EU enlargement to go ahead. Speaking after talks with British officials in London, Pierre Moscovici, the French Minister for European Affairs, noted Britain had already ruled out any change in the rebate formula negotiated by Margaret Thatcher. "This mustn't become contagious," he said. It would be "a very bad start" for the negotiations if every country insisted on getting its money back.

At a weekend meeting in Luxembourg, German Finance Minister Theo Waigel served notice that the current system, under which Bonn claims to pay 60 per cent of net contributions to the pounds 60bn EU budget, had to change. As it strives to get its budget deficit below the 3 per cent required to qualify for the single currency, Bonn is casting around for every possible saving.