EU leaders struggled last night to advance the deadlocked debate on the future financing of the Union.
The Taoiseach, Mr Ahern, said they had reached the stage in the so-called Agenda 2000 budget negotiations where it was now necessary to move from the "recital of aspirations to biting the bullet"
But the negotiations are so bogged down that the incoming German presidency has decided to call a special summit in February to tackle the matter.
Britain was still insisting that its demand for a financial rebate from the EU budget is non-negotiable, the Germans that they must have a reduction in their contributions as well as budget cuts, and Spain that the suggested spending ceiling is too low.
The result was that officials were overnight struggling even to agree a formula for the final summit declaration which would imply that there would be, in the words of the French President, Mr Jacques Chirac, "no taboos" in the negotiations.
A very weak Austrian Presidency formulation, "Everything is up for discussion", had proved acceptable to a British spokesman on the basis that they could discuss the British rebate as much as they liked - "it remains non-negotiable".
A downbeat Mr Ahern said the mood of the meeting was one of determination to get the issue resolved by the end of March, but it was also clear a strong majority favoured the stabilisation rather than expansion of the budget. All would have to make sacrifices, he said.
The duty-free issue was due to come up last night at dinner. Despite intensive lobbying by the British Prime Minister, Mr Blair, the Taoiseach was doing his best to play down hopes of a reprieve. He told journalists that although others were now beginning to see the down-side of abolition and the case for an extension was gaining ground, it was extremely difficult to get the decision reversed.
A measure of that was reflected in the editorial unanimity in Denmark yesterday, with most of the national press warning the Prime Minister, Mr Poul Nyrup Rasmussen, that his failure to stand firm for abolition would be a crucial test of his character.
Although he has suggested he is unwilling to stand alone against an extension of the deadline, his Finance Minister, Ms Marian Jelved, the leader of the Social Liberals, has warned she will bring down the government if he wobbles.
Speaking to the summit in the Agenda 2000 debate, the Minister for Foreign Affairs, Mr Andrews, reiterated Irish concerns about the effect of budget cuts on structural funds and the inadequacy of elements of the farm reform package. The issue of regionalisation did not arise, the Taoiseach said.
Mr Blair in his contribution made the case for two special exemptions from the Objective 1 eligibility ceiling, Northern Ireland and the Highlands and Islands of Scotland.
Journalists tried to prise an admission from his spokesman that he would be willing to sell out the £2 billion a year rebate negotiated in 1984 by a handbag-waving Mrs Thatcher.
But the closest he would go to such an admission was to accept that if the CAP was dramatically reformed in line with British proposals, the rebate could be reduced while the mechanism would have to remain.
In an exercise akin to clutching at straws, some observers were also noting Germany's repeated insistence that it was most concerned to turn around its ever-rising net contribution and did not expect to get much back from a revision of the payments system. "We are not negotiating with a handbag", the German Foreign Minister, Mr Joschka Fischer, insisted.
The tension between the four poorer Cohesion countries and the rest was evident in the debate. The Greek Prime Minister, Mr Costas Simitis, said his country could not survive with the 28 per cent cut in structural funds that advocates of "stabilisation" of the budget recommended.
The Portuguese leader, Mr Antonio Guttieres, contrasted the level of state aids to new companies Portugal can afford at £50 per head of population with Germany's £330 a head.
Yet a clear majority of memberstates are in favour of stabilisation, and although the four have vetoes, too, the talks will be an uphill battle.
