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MENAFN - AFP - 16/11/2012

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(MENAFN - AFP) The French and Polish presidents agreed Friday to lobby for strong development and farm spending as economic stimulus at upcoming European Union budget talks, despite the bloc's paymaster Germany wanting austerity.

The EU's 27 members are struggling to find ways to rein in spending to overcome the economic crisis sparked by the eurozone's crippling debt woes.

As they gear up for the key November 22-23 summit, EU nations are deeply divided over whether to cut the European Commission's proposed 1.03-trillion-euro (1.3 trillion) 2014-2020 budget.

France and Poland "will work together on the budget because I do not want the Common Agricultural Policy -- which is part of our history -- to come into conflict with the cohesion (development) policy, to which Poland is deeply attached," French President Francois Hollande, a socialist, said on this his first visit to Warsaw since becoming president in March.

The budget summit risks turning into an ugly showdown between older wealthier states like Germany or Britain and poorer southern and eastern EU members, including Poland, who benefit most from development funds.

France has long been the main beneficiary of EU farm aid under the Common Agricultural Policy (CAP) and is dead set against possible cuts.

Hollande also stressed his first visit to Warsaw since becoming president in March was focused squarely on "launching a new stage" in bilateral ties with Poland, a 2004 EU entrant which has enjoyed growth each year since it shed communism in 1989.

The EU's development, or Cohesion Fund, a major budget item, helps poorer member states' economies catch up with richer members of the EU's single market, for example by building new transport networks. Poland is its largest beneficiary.

With a market of 38.2 million consumers, Central Europe's largest economy was allocated a total 67.3 billion euros (85.7 billion) in the bloc's previous 2007-13 budget, almost a fifth of the overall development spending.

Poland's centrist President Bronislaw Komorowski hailed Hollande's stance.

"He has underlined... that there is no contradiction between fighting to preserve the Common Agricultural Policy -- including its financial side, which is in our interests -- and those of our farmers and protecting the level of cohesion funds, which we see as an investment in the future," he told reporters at a joint press conference.

"I consider his stance an announcement of cooperation in favour of a final deal negotiated by governments, taking into account two points of view on the realities of the economic crisis and of cohesion policy," Komorowski added.

Hollande also vowed France would do everything possible to smooth Poland's entry into the eurozone, the 17-member single European currency, which Warsaw insists it will join only after its debt crisis is solved.

In a speech later Friday to the Polish parliament, Hollande said EU nations should consider their choices carefully.

"The European budget must be a tool for growth and solidarity, implying that it should be well targeted, well used and set at a level that isn't too high to worry countries that may end up paying in more, nor too low to prevent collective action" by the EU, he said.

Another bone of contention is Britain's EU budget rebate, won by then prime minister Margaret Thatcher in the 1980s and which London is fiercly defending.

Hollande said that the rebate should be up for discussion, just like any form of spending.

"We need to look at rebates, cheques made out to various players, so that everyone can make an effort to control EU spending," he said.

Polish Prime Minister Donald Tusk on Friday held telephone talks with his British counterpart David Cameron.

"The exchange of views confirmed a deep difference in positions on the issue of EU budget spending," a Polish government statement said.

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