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EU Leaders Discuss Financial Aspect of Proposed Expansion - 2002-10-25

Leaders of the European Union's 15 member countries are still haggling at a summit in Brussels over the details of how they plan to finance the bloc's expansion into Eastern Europe and the Mediterranean. An agreement on what financial terms the European Union should offer 10 countries that expect to join the union in 2004 is crucial, if enlargement is to proceed on course.

The search for consensus on sticky money issues got a boost on Thursday, when France and Germany appeared to settle a long-standing dispute over the EU's massive farm subsidies. They agreed to freeze handouts to the bloc's farmers as of 2007.

But diplomats at the EU say such countries as Britain, the Netherlands and Sweden, which, like Germany, are net contributors to the EU's budget, may not be satisfied with that deal. Some see it as a political victory for France, the biggest net beneficiary of the farm subsidy program.

The Dutch, for instance, have been arguing that the farm subsidies should be phased out, and not just capped, as the EU phases in agricultural and other types of aid to the mostly poor candidate countries.

Denmark, which holds the rotating EU presidency, has circulated a draft proposal among the other delegations that would enable the new members to receive direct farm payments from the day they join. But those payments would only reach the level that current members receive after 10 years.

That proposal does not sit well with many of the applicant countries, which are heavily dependent on agriculture. They say they cannot compete with existing EU members on those terms. And, they say, they will press hard in the negotiations on agriculture that will take place between now and December for better conditions and more money for their farmers.

The European Union, however, seems unwilling to bargain on the farm aid proposal.

EU foreign policy chief Javier Solana says he thinks the candidate countries will end up accepting it.

"All these countries are so keen to join the European Union that they will take this deal, which, I think, is a good one, in order to be a part of the European Union," he said. "And, therefore, the time that goes from now to December will be the time to finish up all the negotiations, so that, by December, we will be ready."

Denmark is adamant that the other 14 EU members give it a mandate to conclude negotiations with the candidates on thorny agricultural and budgetary issues before a mid-December summit in Copenhagen. It is there that the 10 candidate countries hope to receive formal invitations to join the bloc in 2004.