FERENC Somogyi, the foreign minister has tabled a "Budapest Compromise" in consultation with the other Visegrád countries (Poland, Czech Republic and Slovakia) in a bid to ensure that the European Union will have a budget from 2007.

Two weeks ago, the European Council failed to reach agreement on the shape of the EU's budget for the period 2007-2013. The stumbling block was British insistence on retaining a budget rebate won more than 20 years ago.

The British refused to countenance surrendering the rebate - justified by the fact that the country's relatively small agricultural sector receives less per capita under the Common Agricultural Policy (CAP) than other countries - unless CAP itself were reformed. This was unacceptable to the French.

Somogyi proposes that, if no agreement is be reached during the British presidency of the EU, which runs from July 1 to the end of the year, a temporary threeyear budget should be worked out under the Austrian presidency which will follow the British.

The Budapest Compromise was necessary because the budgetary disagreements resulted from "genuine differences in principle" between the member states.

There is widespread irritation in the new member states at what is seen as British "wrecking" of the budget.

The EU would function even without a budget after 2007, but structural funds would be paid to member states according to the previous five-year budget, which was agreed upon before the new members joined. They would thus receive far less.