HEADLINES IN THE PAPERS

The Times :
Blair surrenders chunk of rebate as EU wheeling and dealing ends
The Mail :
Leaders agree deal over EU budget -
Tony Blair sacrificed an extra £2.7 billion to salvage an EU budget deal he insists is in Britain's interests
The Telegraph :
Blair set to give up £7bn in rebate fiasco - Tony Blair was preparing his biggest climbdown over Europe last night, offering to slash Britain's EU budget rebate by £1 billion a year without winning any commitment from France on early reform of farm subsidies.
The Independent : - No story or article (still Fridays news)

The Guardian :
Blair clinches deal with offer of big rebate cut - Tony Blair last night brokered an agreement on the EU budget which will see Britain give up £7bn of the rebate negotiated by Margaret Thatcher more than 20 years ago as part of a broad deal to pay the bill for Europe's enlargement to the east

ARTICLE FROM THE BBC WEBSITE

European leaders have agreed the next seven-year EU budget after two days of what UK PM Tony Blair described as "extraordinarily complicated" talks.
The UK gives up 10.5bn euros (£7bn) of its budget rebate, after initially offering 8bn, while the overall budget grows to 862.4bn over seven years.

In return, the EU will review all its spending in 2008-2009, including the expensive Common Agricultural Policy.

Mr Blair said it was "an agreement that allows Europe to move forward".

Referring to budget commitments to new, mainly east European member states, he told reporters: "If we believe in enlargement, we had to do this deal now."

The EU leaders also agreed to grant formal candidate status to Macedonia.

The decision had been delayed by the budget impasse, with France especially sceptical about the wisdom of expansion plans for the bloc while finances remained undecided.

'Solidarity budget'

The 2007-13 budget figure agreed represents 1.045% percent of EU output, up from 1.03% in an earlier proposal but still well below the 1.24% sought by the European Commission.


Commission head Jose Manuel Barroso nonetheless hailed the extra money, saying: "Without solidarity there is no union."

The rebate money will be used exclusively to fund the development of the EU's 10 new members, mainly from eastern and central Europe.

Polish Prime Minister Kazimierz Marcinkiewicz, whose country will get 4bn euros in regional aid, said it was a "budget of solidarity... good for the sake of Poland and for the sake of the development of Europe".

French President Jacques Chirac, long at odds with the British leader on budget issues, praised Mr Blair's movement on the UK budget rebate.

By accepting the need to "deeply transform" the rebate, he said, Tony Blair had made a "legitimate but politically difficult" gesture.

German Chancellor Angela Merkel, said to have played an important part in securing the final compromise, greeted the deal as "a good accord for the future of Europe".

A row deferred

After a pretty awful 12 months for the EU, its leaders will be glad to end the year if not exactly on a high, then on at least a success when yet another crisis was seriously on the cards, the BBC's Mark Mardell reports from Brussels.

In practical terms, the Eastern European countries can now start planning how to spend the cash they will get.

Angela Merkel played an effective role as a peacemaker rather than just as France's staunchest ally.

Tony Blair's grand project was to give Europe a modern budget, refocusing the spending of the European Union so it can face up to the challenges of globalisation rather than subsidising farmers.

He has achieved nothing like that, our correspondent says, not even the certainty that a review will apply to this budget round.

But he has ensured that the EU will return to the subject. This is a row deferred but a row that will happen, our Europe editor adds.

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