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EU budget chief sparks row over British rebate billions

BRUSSELS (AFP) – Europe's budget chief sparked a fierce row with Britain on Monday over the 'Thatcher rebate' which sees billions returned to London in lieu of farm payments to France and Germany.

"The rebate for Britain has lost its original justification," European Union budget commissioner Janusz Lewandowski told German business daily Handelsblatt, arguing that income per capita in Britain has risen substantially since 1984 when the rebate was negotiated.

"My role in this business is as an honest broker," he added in anticipation of a vigorous defence from London.

The British government did not shirk the issue, telling the Polish official that he was barking up the wrong tree as Brussels bids to rejig its finances for the years through to 2020.

"The UK abatement remains fully justified. It's a matter of fairness," said a British government spokesperson.

"Without the rebate, the UK's net contribution as a percentage of national income would be twice as big as France's, and one-and-a-half times bigger than Germany's.

"This is because of expenditure distortions from policies such as the (Common Agricultural Policy), which still accounts for more than 40 percent of the EU budget."

British Treasury figures put its rebate for this calendar year at 3.1 billion pounds (3.7 billion euros or 4.8 billion dollars) and around 26 billion pounds for the 2007-13 budget cycle as a whole.

Using 2010 prices, London calculates that Britain's 75-billion-euro payment into the EU pot over that seven-year period falls to 38 billion euros after the rebate -- a huge sum at a time of deep and unpopular cuts to public services across England, Scotland, Wales and Northern Ireland.

The issue has returned to the agenda as Brussels seeks to find its own cuts in straitened times, and grants to poorer regions of Europe in the form of so-called 'cohesion' funding are being even more heavily targeted in heated negotiations just over next year's budget.

Then prime minister Margaret Thatcher was infamously caricatured as hitting fellow EU leaders of the day over the head with her handbag when she won the argument more than a quarter of a century ago.

She wrung the concession out of fellow leaders on the grounds that a large slice of EU money was used for farm subsidies from which did not benefit London.

A European Commission spokesman said that Lewandowski had "just stated his personal opinion," adding: "I don't think it's the commission's view on this.

"Never ever did he actually call for the end of the UK rebate."

Britain is leading the charge for deeper spending cuts in Brussels throughout the bloc's next major budget cycle from 2014-2020.

Last month, the 27 EU member states recommended a 2011 budget of 126.5 billion euros, more than 3.6 billion euros less than the amount sought by the commission and an almost identical figure to the London rebate.

The EU budget now goes to the European parliament, with a conciliation process expected to be invoked if the final figures are to be produced in time for an October deadline.

Posters for Egypt's spy chief as president removed

CAIRO – Posters supporting Egypt's intelligence chief as a candidate in next year's presidential election were removed from Cairo's streets hours after they appeared, while an independent newspaper was ordered to pull reports of the campaign from its pages, officials said Friday.

The swift reaction against the posters, which bore an image of Lt. Gen. Omar Suleiman in a dark business suit and sunglasses and waving his right hand, appeared to indicate that the campaign backing the enigmatic spy chief had embarrassed President Hosni Mubarak's regime.

Suleiman is a close aide of Mubarak, the 82-year-old who has ruled Egypt for nearly 30 years and is still officially the ruling party's candidate in next year's presidential vote.

The campaigners behind the posters, which dubbed Suleiman the "real alternative," say they oppose a possible succession in which Mubarak passes power to his son, banker-turned-politician Gamal. Both deny that such a plan exists.

A security official, speaking on condition of anonymity because he was not authorized to speak to the media, said municipality workers removed all of the posters Thursday soon after they appeared. He did not elaborate.

Campaign organizers also confirmed the posters were taken down.

The activists insist on anonymity, making it impossible to determine who or how popular they are.

The question of who will succeed Egypt's longtime ruler has gained added urgency since the elder Mubarak traveled to Germany earlier this year for surgery to remove his gallbladder and a benign growth in his small intestine.

His 46-year-old son has been a rising force in Egyptian politics since 2000, and now serves as the ruling party's chief strategist. Earlier this month, posters sprung up around Egypt supporting Gamal as a candidate for presidency.

In an indication of just how delicate the issue of who will succeed the elder Mubarak is, an official at the independent Al-Masry Al-Youm daily the paper was ordered to destroy 30,000 copies of the daily that carried reports of the Suleiman poster campaign.

It was an unusual request for Egypt's largely vibrant press.

The official, who also spoke on condition of anonymity because of the sensitivity of the issue, said the printing house of a state-owned newspaper refused to print another batch of Al-Masry Al-Youm until news of the campaign was pulled from the front page.

The state-owned printing house was following orders from senior officials, the official said without elaborating.

Suleiman, 74, has been Egypt's intelligence chief for nearly two decades. He is a close Mubarak adviser and is in charge of Egypt's most pressing foreign policy issues, such as relations with Israel, the United States and neighboring Sudan.

He rarely speaks to the media and, like most of those with intelligence or military backgrounds, is viewed positively by many Egyptians who look to him as a candidate that would keep Egypt's top job within the widely respected military. He has never publicly expressed a wish to run for president and is not a member of the ruling party.