Amid pressure from all sides, the EU budget for 2007-2013 was finally agreed upon, with the majority of accolades going to new German Chancellor Angela Merkel, as she won the hearts of the continent by offering to pay more and play mediator between London, Paris and Warsaw over the contentious UK-rebate.

All along, UK Prime Minister Tony Blair had tied any concession of his country’s rebate to an overhaul of the common agricultural policy (CAP). In the end, however, there was no firm commitment to re-discussing the CAP, and the British gave up €10.5 billion (approximately 20%) of their annual rebate.

It is expected that Mr. Blair will face harsh criticism at home for such a compromise. In fact, Reuters is reporting that the UK financial minister Gordon Brown is furious with the result.

The Financial Times is predicting that the cut will eventually wreak havoc on Britain’s own budget.

Source: EU Observer