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Kenny faces nightmare start to EU presidency after budget talks fail

TAOISEACH Enda Kenny faces the nightmare prospect of having to put together a deal on the highly contentious EU budget during Ireland's EU presidency next year.

The next round of talks are scheduled for a summit early next year after leaders failed to come to agreement on the €1trn budget over two days in Brussels.

But the latest set of proposals would see the budget for EU farm grants cut by €17bn – a significant blow to Irish farmers receiving CAP payments.

Although the failure is a setback for Ireland's EU presidency, Government officials believe there is a chance to make the six-month term more relevant.

"It's a chance for Ireland to step up and show we can do a job," a coalition source said.

Mr Kenny struck an upbeat tone saying there "wasn't any bitterness" at the talks but there was confidence agreement can be reached.

However, the Taoiseach admitted there was no agreement on spending.

"We are now faced with it, we have to deal with it and we will deal with it," he said.

"It is now going to happen during Ireland's presidency and we will embrace that and work very effectively and closely with the presidency to see that that happens."

The latest proposals on the table from European Council President Herman van Rompuy were less heavy on the cuts to CAP, which Mr Kenny says he is defending.

"Obviously I made a very strong defence for the importance of the CAP for Ireland from which we get 85pc of our income and also the question of the recognition of the reality of unemployment, dealing with rural development and particular regions within the country," he said.

Mr Van Rompuy brought the seven-year budget to run from 2014 to 2020 down under the €1trn mark, to €973bn, by cutting €75bn off original proposals put forward by the European Commission.

In his compromise arrangements, he put back another €8bn into the CAP and €10bn into cohesion funds for disadvantaged regions.

German Chancellor Angela Merkel wants another €30bn cut from the overall budget.

British Prime Minister David Cameron said the compromise plan tabled by Mr Van Rompuy was "just not good enough", given the austerity that governments were implementing at home.

He said other northern EU countries that contribute more to the budget than they get back felt the same way.

Mr Cameron said a deal was still possible but the European institutions were "living in a parallel universe".

He said he will also continue to defend Britain's budget rebate. "We came here wanting a deal, but it can't be a deal at any cost," he said.

"The British people expect us to fight for the best deal for them and that's what I intend to do," he added.

Mr van Rompuy said the budgetary talks are so complex they normally take two terms.

EU officials said the talks had to be postponed because there was no chance of reaching a consensus.

European Commission President Jose-Manuel Barroso said this was the third time he was involved in such negotiations and this was the "most difficult" as it was the first time in EU history that real cuts were being discussed.

Irish Independent