Chirac Demands Blair Give Up Rebate; E.U. Faces Deadlock

PARIS – The European Union was facing financial deadlock last night after Prime Minister Blair rejected a face-to-face demand by President Chirac that Britain surrender its rebate.Mr. Blair’s uncompromising stance on the rebate, worth about $5.4 billion a year, appeared to kill off hopes of a deal on the union’s future spending due to be worked out at a summit tomorrow. It left the European Union facing budgetary stalemate as well as a political crisis over its constitution, which has been rejected by French and Dutch voters.Speaking in Paris after meeting Mr. Chirac at the Elysee Palace, Mr. Blair said he would consider changes to the value of the rebate only if France agreed to cut farm subsidies.He said that there had been a “sharp disagreement” between them.“I think it is difficult to see these differences being bridged,” he said. “But of course we continue to talk to people, including the presidency, about it.”The prime minister said that, despite their differences, the meeting had been “immensely amicable,” although he and Mr. Chirac did not share a platform at the end of their talks.On the constitution, Mr. Blair called for a “pause for reflection,” indicating that other countries should follow Britain in postponing their planned referendums on the issue. The people of Europe would accept the need for a constitution only if they believed that the European Union was spending wisely, he said.Mr. Blair earlier rejected calls for the rebate to be frozen in the next budgetary round between 2007 and 2013. British officials said that the demand, presented over breakfast by Luxembourg’s prime minister, Jean-Claude Juncker, who will chair the E.U. summit, would cost British taxpayers between $31 billion and $36 billion.Mr. Chirac made no comment as his talks with Mr. Blair ended. But a spokesman said he wanted a “reasonable and fair” deal with each member state.

Chirac Demands Blair Give Up Rebate; E.U. Faces Deadlock

Chirac Demands Blair Give Up Rebate; E.U. Faces Deadlock

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