The Minister for Agriculture has expressed some confidence that a deal in the EU farm talks might emerge next week, although ministers were presented in the last 24 hours with wildly differing approaches to a settlement.
Mr Walsh also said he was "very pleased" at the Germans acknowledgment that co-financing was no longer on the table.
As talks adjourned at lunchtime yesterday, the German Presidency signalled a new entente cordiale with France by tabling a new compromise paper which would reduce the costs of Commission plans by £13 billion by watering down reform proposals for price cuts or by postponing them.
Most significantly the paper suggests saving £6.5 billion by abandoning all reforms of the dairy sector before a review of quotas in 2003.
Although Mr Walsh said the proposals were still being considered, there was no doubt they come closer to the Irish approach than any paper yet seen and were welcomed as such by the Irish Farmers' Association. They were, however, denounced by the Commission as an abandonment of reform and have no possibility of winning acceptance in their current form among the majority of reform-minded countries.
The paper could not have come as a more extreme contrast to the nightmare budget scenario presented by the Commission late on Thursday. Extrapolating the alleged costs of all the demands currently on the table and the costs of the last compromise on offer, the Commission came up with an overspend of £20 billion on the broadly agreed ceiling proposed for spending in the 2000-2006 budget period.
To bring the spending back to the acceptable level the Commission outlined three scenarios based on the idea of "degressivity", annual successive claw backs of direct aids, each scenario worse than the last.
In the first and second, annual cuts to those receiving more than £3,900 a year would work out at 15 per cent if applied across the board, or, if sectorally, 20 per cent in cereals and 7 per cent in other sectors, in effect eliminating direct aids, or "cheques in the post" altogether within a maximum of seven years.
A third formula simply cut aids to large farmers by between 75 per cent and 100 per cent, the latter for farmers receiving more than £60,000 in aid a year.
The scenarios were denounced as "provocation" by an Irish spokesman, and "bully-boy tactics" by the IFA. The French Minister, Mr Jean Glavany, said they were all shocked and that this was "not a serene way to negotiate".
There can be little doubt that they were intended largely to concentrate minds on the gulf between aspirations and means available. A Commission spokesman, Mr Gerry Kiely, said half of the excess spending reflected French demands.
The result may well be to force member-states to look more closely at a combination of scaling down reform and moderate degressivity.
Mr Walsh insists that as much as £4.5 billion can be saved by postponing milk reform, £1.2 billion by phasing in cereal price cuts in two stages, and £1.2 billion by reducing payments to the richest cereals farmers.
The German compromise paper heads in that direction. It has not been circulated as a Presidency paper, presumably to allow the Germans a freer hand, and in addition to postponing milk price cuts suggests cuts of only 20 per cent in beef and veal guarantee prices and a 10 per cent cut in cereals prices with 10 per cent setaside.
In both beef and veal, however, the Germans are proposing far-from-complete compensation to producers.
The talks resume on Tuesday afternoon when a new Presidency compromise package is expected. Farm ministers are anxious to get a framework of an agreement before finance ministers return to Brussels on Monday week when they may impose a budget stringency which could make a deal even more difficult to come by.
