EU: COMMISSION TOYING WITH NEW PLAN TO BREAK BUDGET DEADLOCK.

Last Wednesday, the day before the start of the ill-fated summit meeting when EU leaders were to try and get a budget deal, European Commission President Jose Manuel Barroso proposed a review clause of the 2007-13 financial framework in 2008 to see if there were adequate budget resources to cover spending needs. Senior Commission officials explained to Europe Information that the idea was to use the review as a springboard for a new round of CAP reform. Officials point out that under the last round of CAP reforms in 2003, the Commission has to submit a report to the Council on the implementation of the single payment scheme by member states two years after its introduction or by 2009 at the latest.

During the negotiations on Friday, which focused on language concerning a review clause, the Commission proposed a "joint declaration" which would be adopted by the Council but separate from the agreement text and the Council conclusions. However, this compromise - and language proposed by the Luxembourg Presidency - was rejected by the UK which argued that there was not a strong enough commitment that spending on the Common Agricultural Policy would be reduced during the 2007-13 period and that the 2002 agreement on the farm budget would go unchallenged.

The Commission believes that it will be...