Persson is Blair’s new budget buddy after summit solidarity

By Jarle Hetland

Date: 23/06/05

Like many Nordic politicians Sweden's Prime Minister Göran Persson is usually regarded as ideally suited for EU negotiations. But last week's summit saw the emergence of a rather different man. He was in bullish form when he arrived in Brussels on Thursday (16 June). He was even more bullish on his way home to Sweden after helping the UK's Prime Minister Tony Blair postpone a deal on the EU's budget for 2007-13. The Anglo-Swedish friendship was cemented at 10 Downing Street on Tuesday (21 June), when Persson paid a post-summit visit to Blair.

Ever since it joined the European Union in 1995, Sweden has remained critical of the EU's spending on agriculture - naturally, some will say, since agriculture is only a small part of the country's economy. But it was the same Persson who, in 2002, accepted the current agricultural spending plans, which run until 2013, under the then Danish presidency led by Anders Fogh Rasmussen.

If Persson has his way, any future EU budget will have a smaller net contribution from Sweden and it will not have a cent to spare for agriculture. And he insists that time is running out for the French President Jacques Chirac, who is a staunch defender of the common agricultural policy (CAP).

No one doubted the sincerity of the Swedish premier when on Friday night he demanded radical changes to the structure of the EU budget. But close observers will also see his act in Brussels as political play for next year's general election.

He is currently struggling to regain momentum at home after losing two crucial battles over the EU: the referendum on joining the euro, in 2003, and last year's elections for the European Parliament.

Although Persson's opposition to the Luxembourg presidency's budget proposal was, undoubtedly, a gift to Blair, the British premier's decision to attack the CAP was music to the ears of his Swedish counterpart.

The two could join forces again as soon as Tony Blair takes over the EU presidency on 1 July. Persson described Blair as a "world-politician" and was in no doubt that the UK premier came out strengthened from last week's summit. He said that he expected a new initiative during the next presidency. The remaining question is what, if anything, Persson will be expecting in return from Blair.

Not as much joy was expressed on the other side of the Øresund straits, following the collapse of the summit. Although Denmark was one of the countries blocking the budget proposal, Prime Minister Anders Fogh Rasmussen said that he would support it if all other member states did. He was, thus, disappointed with the outcome.

Fogh Rasmussen was one of the architects of the current agricultural regime and is on record describing the current gradual phase-out of agricultural spending as a good thing. He did, however, agree with both the UK and Sweden that the EU's money is spent the wrong way. In particular, he claimed, too little is being invested into research, development and education, and there is a need for a more future-based orientation of the EU budget. This money, Fogh Rasmussen conceded, will have to come from the farm budget.

Praising the effort of the Luxembourg presidency in the search for a solution, Fogh Rasmussen said a deal was more likely to be crafted under the Austrian presidency, which starts next January, and not under the UK's.

Despite their slight differences over how to deal with agricultural spending, both Fogh Rasmussen and Persson have signalled their commitment to reform the way the EU spends its money. But while Persson will be busy seeking to be re-elected in the coming year, Fogh Rasmussen could play an essential part in mending bridges among member states.

Swedish Prime Minister Göran Persson is critical of the European Union's spending on agriculture, and at the European Council in Brussels, 16-17 June 2005, he helped UK Prime Minister Tony Blair postpone a deal on the EU budget for 2007-2013.