The budget negotiations broke down at the end of Luxembourg’s presidency, in June. Several member states rejected the proposed package then, including Britain. It would only consider re-negotiating its annual budget rebate in return for a promise to review the farm sector. The newcomer states were already saying then they would accept less money if that would help secure agreement .
If left unadjusted, the rebate would increase to seven billion euros in 2013, from around five point three billion now. Former Prime Minister Margaret Thatcher started pushing for the rebate in 1979, six years after the UK joined the ‘common market’. At that time, Britain was one of the poorer club members and got little back from communal farm subsidies. Thatcher’s wish was granted in 1984. Two decades later, Britain is in the same neighbourhood as Germany and France in terms of wealth.
When the rebate began, some three quarters of the budget was being allotted to the increasing and guaranteeing of production. The Common Agricultural Policy still consumes more than 40 percent of the budget. France receives more farm aid than anybody, around a fifth of the total. Next come Spain, Germany, Italy and Britain. A 2002 reform deal froze farm funding levels until 2013. France has made clear it wants those levels to stay till then.