MercoPress. South Atlantic News Agency

Major clash anticipated over EU budget; farm subsidies at the heart of dispute

Minister Cazeneuve: “France would not support a multi-annual budget that does not maintain the funds of the common agricultural policy”

British Prime Minister David Cameron came under pressure to act tough on the European Union budget and France threatened to use its veto, signalling a divisive start to bargaining over the 1 trillion Euros long-term spending plan.

Wednesday's warning from Paris echoed a similar threat from Denmark last week, while in London Cameron suffered a humiliating defeat in parliament by Conservative rebels determined to push him to take a hard line over Europe, an issue that has long divided his party.

Although the British parliamentary vote is non-binding, mutinous Conservatives said it added force to their demand that Cameron should end his backing for a freeze in EU spending and demand outright cuts.

The French ultimatum was prompted by a proposal to trim farm subsidies - jealously guarded by Paris as the top recipient of such payments - as part of a compromise from the Cypriot EU presidency to cut the 2014-2020 budget by more than 50 billion euros.

Even after the proposed cut, agriculture would remain the largest spending area, with deeper cuts pencilled in for infrastructure investment in the bloc's poorest regions as well as research.

“We oppose the proposed reduction,” French European Affairs Minister Bernard Cazeneuve said in a statement. “France would not support a multi-annual budget that does not maintain the funds of the common agricultural policy.”

The backlash was also a warning not to cut the proposed farm budget further, after Cyprus said much deeper reductions than those outlined so far would be needed to clinch a deal.

Despite support from Ireland and Austria, France's position puts it on a collision course with Germany, Britain and other net contributors looking to slash overall spending by 100-200 billion Euros.

EU diplomats have warned privately that further cuts are likely to hit agriculture hardest. A Franco-German deal to maintain the nominal level of farm spending served as the basis for agreement on the last long-term EU budget for 2007-2013.