negotiated in 2002 and agreed unanimously. The talks between the two leaders came ahead of the E.U. summit in Brussels on Thursday and Friday, where the E.U.'s budget for 2007 to 2013 will be a main topic. With Britain set to take over the E.U. presidency in July, Europeans are hoping for a political breakthrough on the budget, to limit political damage inflicted on the Union by the rejection of the E.U. constitutional treaty by the French and Dutch. However, the British prime minister said it was "difficult to see how these differences can be bridged" for the summit. And he is likely to be in the minority regarding the rebate at the summit and during the British E.U. presidency. On Monday, after talks with Blair, German Chancellor Gerhard Schroeder firmly backed Chirac on farm subsidies and urged the British prime minister to show "flexibility" over cutting its E.U. rebate. Despite his disagreements with Chirac and Schroeder, Blair said "the idea of the European Union without a strong French and German relationship is unthinkable". --More 2336 Local Time 2036 GMT
