Dermot Ahern (Louth, Fianna Fail)

The budgetary correction mechanism, called the UK rebate, remains with the reduced contribution to the financing of the abatement, benefiting Germany, Austria, Sweden and the Netherlands, as agreed at the 1999 Berlin European Council. The rebate remains in full on all expenditure except that relating to the new member states. From 2013 at the latest, the UK shall fully participate in the financing of the enlargement costs of countries that acceded after 30 April 2004, except for CAP market expenditure, which relates to direct payments and market-related expenditure as well as rural development expenditure originating from the EAGGF guarantee section.

To this end, the UK budgetary mechanism shall be adjusted by progressively reducing the total allocated expenditure in line with the modalities in annexe 2 to that document. Between 2007 and 2013, the additional contribution from the UK shall not be higher than €10.5 billion in comparison with the application of the current own resources decision. The key issue in the December discussions was the amount and there was a significant debate on that. Between 2007 and 2013, the UK's contribution will gradually increase towards the cost of enlargement but the CAP-related cost will not be taken into account in this regard.

There was a division between the larger states and net contributors to the budget, which wanted to keep the ceiling as low as possible and the benefiting countries and other member states such as Ireland which felt the accession countries had to obtain a fair share of the funds and all the richer states should make valid contributions. During the discussions, it was generally felt that while the British were saying they wanted to pay for enlargement, ultimately, because of their refusal to discuss the issue of the UK rebate in the months leading up to the meeting, they caused an impasse, which meant that all countries were not fairly contributing to the cost of enlargement. While the accession countries were satisfied with the compromise on the funds, individually, they would probably say they did not receive enough. A total of €170 billion in Cohesion Funds is available over the seven-year period for the accession states and, therefore, substantial resources will be available to them.

Circumstances have changed, unfortunately, for the worse regarding the Iranian issue since the December Council. The IAEA board of governors will meet on 2 February and the situation is evolving on a daily basis. The Iranians are due to meet the Russians on 16 February to discuss the Russian proposal on how to get around the issue. However, this is an extremely difficult and potentially dangerous scenario. The Government and the EU believe we should continue to seek a diplomatic resolution to this problem. There is a long way to go and we will continue to push at EU level to ensure all diplomatic channels are used to get the Iranians to see sense.

On the one hand, they point out they are entitled under the NPT and other international agreements to move on the issue of nuclear energy for peaceful purposes while, on the other hand, a number of UN member states believe they have other intentions in this regard. However, independent examinations of what they have been doing show they have not told the full truth regarding what is going on. They are not being fully transparent with the IAEA inspectors and, as a result, the wider international community feels they should be pressed harder on the commitments they have made on ensuring this activity is for peaceful means only. I assure the Deputy we will keep a close eye on this.

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