Tony Blair has raised the stakes ahead of tomorrow's EU summit, warning fellow leaders that they must radically reshape the common agricultural policy before attempting to revive plans for further political integration, according to many of this morning's papers.
The Guardian quotes the prime minister speaking at a solo press conference at the British embassy in Paris after talks with Jacques Chirac. It says he admitted that there was now "sharp disagreement" between Britain and France over the EU budget. "It is very difficult to see how these differences are going to be bridged," he said.
MEANWHILE the Financial Times says Blair rejected suggestions that a failure to agree a budget deal when EU leaders meet would fuel the political crisis caused by the Franco-Dutch rejection of the EU constitution.
The paper adds that Blair’s comments did not dispel optimism among diplomats in Brussels that a deal could still be reached, settling the EU's budget for the seven years 2007-13.
IN OTHER NEWS. TURNER & NEWALL (T&N) has begun talks with the Pensions Regulator, leading to fears that a £775 million hole in the retirement scheme of the failed engineering company could sink the government’s new pensions lifeboat The Times claims.
The paper says Kroll, the company’s administrator, says it has held “constructive, ongoing meetings” with the regulator over the future of T&N’s pension scheme. Entry into the Pension Protection Fund (PPF) would save a substantial part of the retirement benefits promised to T&N’s 37,000 fund members. It comes just days after it emerged that the PPF was likely to take on the £210 million pension deficit of Heath Lambert, the insurance broker.
AND PROSPECTS of an interest rate cut next month are in the balance after figures showed inflation remained unchanged at a seven-year high of 1.9% in May - the third month running - buoyed by the rising cost of food and air travel, says The Scotsman.
The paper says the figure is higher than analysts had expected, reducing hopes of an imminent cut in rates, which had been raised by the consumer spending slowdown and manufacturing weakness. Analysts had been expecting inflation, as measured by the rate of increase of the Consumer Price Index, to fall to 1.7%, but the price of meat and fruit soared during the month. Air fares also increased as the airline industry launched its more expensive summer schedule. However, drivers received a boost at the petrol pump with the cost of petrol easing slightly during the month.IFAonline
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