Westphalia and his apparent decision to seek early general elections in the autumn, a year ahead of schedule, would remove any German flexibility to agree to higher spending now. EU president Luxembourg has proposed freezing the British refund at its current level of 4.6 billion euros a year at the start of the 2007-2013 budget period then gradually reducing it. Luxembourg's deputy foreign minister, Nicolas Schmit, noted that if his country was not able to broker a compromise, Britain would inherit the problem when it takes the EU chair in July. "To start negotiating by threatening with a veto ... I wish all the best to the next presidency," Schmit said. --more 2114 Local Time 1814 GMT
