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@hugo7
Nice.
I don't think there's going to be room in your budget for a respray though. Also you'd be much better off spending that money on some wheels*/ tyres, and drive train (chainrings/cassette/chain/BB).
I'd add new brake blocks to your list. Fibrax are cheap and good. As for the rear mech, it depends on the condition, but you may actually just be able to take it appartly and service it - although you can pick up second hand ones cheap.
First thing to do is get it all stripped down and have a look.
*altho it's hard to tell what condition the wheels are in.