Bonn ties agriculture ministers’ hands to win EU budget deal

Date: 14/01/1999

By Tim Jones

EU FARM ministers will be kept on a tight leash by their political masters as the negotiations on reforming the Common Agricultural Policy reach a climax, under plans drawn up by the German presidency.

Foreign and finance ministers will be instructed to maintain a firm grip on the talks over costly farm reforms, which are key to an overall agreement on the Agenda 2000 package of changes to EU spending plans.

The move has been prompted by fears that agriculture ministers are too easily swayed by farmers' lobbies and may fail to recognise the need for concessions to get a deal on the package as a whole.

German Chancellor Gerhard Schröder has decided to call a special summit of EU leaders on 26 February in Petersberg in a bid to break the deadlock over the Union's budget for the next seven years. "We really must make significant progress on farm reform, because it is one of the key questions in the financing of Europe," he insisted after a meeting with the European Commission this week.

In its Agenda 2000 package designed to ready the EU for enlargement to the East, the Commission proposes deep cuts in grain, beef and dairy support prices in return for compensation worth up to €6 billion for farmers.

Schröder wants to be able to trade off elements of CAP reform to secure an overall budget deal. This would keep alive his hopes of persuading fellow EU leaders to repatriate some responsibility for paying direct subsidies to farmers as part of his campaign to reduce Germany's €10-billion annual net contribution to the budget.

A 22-page paper prepared for Agenda 2000 negotiators by the German presidency warns that "due attention will have to be paid to ensuring that there is coherence between the objectives and scope of the CAP reform and the financial means available".

Martin Wille, chairman of a high-level group of national officials tasked with breaking the back of CAP reform, has been asked to report regularly to member states' EU ambassadors.

The paper also calls on foreign ministers to examine the state of play in the CAP negotiations when they meet on 25-26 January. Two weeks later, finance ministers will subject the latest compromise proposals to "more detailed financial verification".

German Finance Minister Oskar Lafontaine will kick off ministerial discussions on Agenda 2000 next Monday (18 January) with a debate on a planned new agreement between governments, the Commission and the European Parliament for managing the seven-year budget. MEPs are keen to win extra budgetary powers in return for their ratification of Agenda 2000 before the June elections.

Spanish Socialist MEP Joan Colom, who heads negotiations with the two other institutions over fiscal management, believes the Parliament should be allowed to move money in the EU budget from one policy area to another as the need arises.

This would be the Parliament's price for accepting an increase in spending below the anticipated 2.5% growth rate for the Union's economy between now and 2006.

"What does Parliament get? Less money to spend and no power," explained Colom. "Why should it agree without any kind of compensation? We are not talking about having billions of euro to spend, but the current system is totally inflexible."

Lafontaine will also propose a compromise to end the dispute between Spain and the rest of the Union over how to ring-fence the €59-billion budget set aside for countries preparing to join the EU.

Fourteen governments want a long-term budget established for the existing 15 member states with a separate 'enlargement reserve', while Madrid fears that this could result in cash earmarked for Spain being spent instead on new members.