A familiar showdown

Negotiations over the size and shape of the EU budget post-2013 are just around the corner. Expect no surprises about what the main battlegrounds will be (clue: the CAP and the UK rebate).

UK Chancellor George Osborne has already sent a clear message to his colleagues in the EU.

"We are not going to give way on the rebate, and people had better know that at the beginning of the process, because they'll certainly discover it at the end", he said earlier in the week.

But despite Osbourne's comments, French Budget Minister Francois Baroin (picture) still tried to test the waters during a visit to London yesterday.

"I have made many efforts and put on the table several arguments. But I have understood that the Britons had no intention of changing their stance", he said, adding that during the talks he had also made clear that French President Nicolas Sarkozy's position on the Common Agricultural Policy "is not negotiable".

In other words, we're alooking at a tricky, but painfully familiar, starting position for the budget talks.

Baroin concluded, "at least [...] these talks have shown the determination of both our countries to defend the respective positions". (Hmm, good thing these talks took place then - for a while there we thought that the UK and France would decide not to defend their respective positions...)

But there is a simple solution to this potential deadlock: let's opt for a similar deal to that which Tony Blair struck in 2005, when he infamously gave away £9bn of the UK's rebate in return for vague promises of CAP reform, which amounted to absolutely nothing in the end.

But this time, let's reverse the terms: France and other member states agree to cut the CAP by, say, 50% and repatriate regional spending for member states with a GDP of 90% or more of the EU average (France could actually agree to the latter solution even outside discussions about the UK's rebate and CAP, since the country is now a net contributor).

In return, the UK would promise a "review" or "health check" of its rebate - alongside other member states' rebates - in 2018, with the view to possibly scrapping it altogether.

Unfair? Unreasonable?