German Foreign Minister Joschka Fischer has said the European Union can make progress with a debate on reforming farm subsidies and hoped it would agree on a budget during Britain's presidency of the bloc. In a sign of a softening stance towards a call by British Prime Minister Tony Blair to reform Europe's generous system of farm subsidies under the Common Agricultural Policy (CAP), Fischer told the BBC late Monday, "I think we can make progress but we should avoid confrontation. We have different interests and Europe needs compromise." Blair, whose government took on the rotating, six-month presidency of the 25-nation bloc last Friday, has said he wants to turn a crisis over the EU's budget and fledgling constitution into an opportunity for reform. He has promised to support a review of a controversial budget rebate granted to Britain provided this forms part of a sweeping shake-up of the European Union's long-term financing. Fischer noted that the group had worked hard in recent years to reduce the amount of its budget that is spent on subsidies from 80 percent to 40 percent and predicted the ratio would fall further. "I think moving forward with the reforms, agriculture policy, I think a further decrease is manageable if you can reach a consensus," he said. "You need a consensus for that and it would be very helpful if the British presidency will take the lead and give also a signal with the rebate." In practical terms with the EU now comprising 25 member states, the German diplomat said it was vital to agree on the 2007-2013 budget. "If we can manage to reach an agreement during the British presidency, Germany will applaud," he said.