German Chancellor Angela Merkel and visiting French President Jacques Chirac differed Thursday on the role of Britain's annual rebate in the EU finance, despite the fact that both had rejected its controversial European Union budget proposal.

Speaking before an informal meeting with Chirac, Merkel said that the British proposals for the 25-member EU 2007-2013 budget were not sufficient.

Merkel said that she did not want to load up the negotiations over EU finances by making demands on certain countries.

She said that the rebate Britain receives from its contribution fees to the EU could form part of the solution to the conflict over EU finances, and that it was important for the summit to workout an agreement.

For his part, Chirac Tuesday called on British Prime Minister Tony Blair to make new proposals on the budget, saying that "the current proposal made by the British presidency (of the EU) poses a problem".

He also called for a lasting new formula for the British rebate.

"The current proposal is not satisfactory from the French point of view," the French president said.
 
Chirac has come to meet Merkel to "construct with her a common approach" on the European Union 2007-2013 budget proposal, as he thought a French-German agreement "is necessary for progress of Europe," his spokesman Jerome Bonnafont quoted him as saying Thursday in Paris.

On the Dec. 15-16 EU summit in Brussels, the budget proposal produced by Britain for the 25-member EU will be main topic to be discussed. London is holding the EU's current rotating presidency.

The proposal to cut the budget to € 846.8 billion (US$993.9 billion), compared to € 871 billion proposed by previous presidency Luxembourg.

It has drawn criticism from many member-nations, especially new EU members, as most of the savings would come from the slashing of aid to the newcomers, mostly east European states, and the cutting of rural development funds for western Europe.

(Xinhua News Agency December 9, 2005)