EU Shock Up For Debate

Poorer European Union newcomers may agree to a reduction in the aid they receive from the bloc's coffers but not to as big a cut as current EU president Britain has proposed, diplomats said on Friday.

Leaders of the four biggest newcomers -- Poland, the Czech Republic, Hungary and Slovakia -- are meeting Prime Minister Tony Blair in Budapest on Friday for talks on the long-term budget, due to be approved in mid-December.

Diplomats say Britain has proposed a cut in EU aid to the 10 new members in the 2007-13 period of 10 percent, about 16 billion euros (10.8 billion pounds), as a way of reducing contributions by the bloc's biggest paymasters, led by Germany.

New members, mostly ex-communist nations in central and eastern Europe, reacted with alarm to the plan, saying it would threaten their ability to modernise their infrastructure and catching up with the richer West.

But some diplomats from the new member states said they could agree to a compromise if Britain were to scale back the planned cuts.

"I think that Britain might agree on around five percent (cut in cohesion funds)," a senior official taking part in the Budapest meeting said.

Hungarian Prime Minister Ferenc Gyurcsany, who met Blair on Thursday evening, also saw room for a compromise but told Blair the four big newcomers, often called the Visegrad Four, would reject a 10 percent cut, a Hungarian official said.

"Gyurcsany...explained that this would not be acceptable for the Visegrad Four, but it doesn't mean that the Visegrad Four and Gyurcsany would not be striving for a compromise," the official told Reuters.

Blair received a similar message on Thursday when he met leaders of the Baltic nations in Tallin, diplomats said.