Britain and France battle

Speaking after talks with President Chirac at the Elysee Palace, Mr Blair said it was “difficult to see the differences being bridged” at a two-day meeting of European leaders.

The two-day talks, due to start in Luxembourg on Thursday, will be dominated by the Netherlands and France’s rejection of the EU constitution and a row over the 2007-2013 budget

France is leading a European push for Britain to give up a five billion euro
(A$8b) annual budget rebate.

However, Mr Blair again insisted there could be no renegotiation that did not also take account of the EU’s agricultural spending, of which France is by far the biggest beneficiary.

“There cannot be an agreement on this that does not involve reconsideration of the fundamentals…. It’s difficult to see how you can have a change in fundamentals that doesn’t make a change in the Common Agricultural Policy (CAP),” he told a press conference at the British embassy.

But Mr Blair said it would not be a “crisis” if this week’s summit in Brussels failed to reach a deal on the EU’s future financing, because the budget under discussion does not come into effect until 2007.

The British leader Blair was in Paris on the last leg of a four-nation tour originally focusing on issues such as global warming and African debt relief which will be on the agenda of the Group of Eight summit in Scotland next month.

Asked about the French and Dutch “no” votes in referendums on the EU’s new constitution, Mr Blair said that Europe now needed time to ponder the best way forward.

“I am now more clear than ever before that it is right to give some pause for reflection,” he said.

But he said the key message of the “no” vote was that the European Union needed to “reconnect” with the concerns of ordinary people.

In a jibe at Germany and France, long seen as the major political forces within the EU, he said the old ways of running the bloc had to change.

“It’s no longer possible to run Europe the way it used to be run, it’s got to be run on a different basis,” he said.

“We need a strong Europe, but it’s got to be a strong Europe of the right kind. The Franco-German relationship is very important but it cannot comprise all of what now drives Europe forward.”