Compromise struck in battle over Balkans cash

Date: 24/02/2000

By Simon Taylor

Farm Commissioner Franz Fischler has agreed to shave €300 million off next year's agriculture spending to raise money for EU projects in the Balkans.

In a face-saving compromise struck this week, Fischler resisted Budget Commissioner Michaele Schreyer's demands for a cut in direct support payments to farmers, which account for 60% of the Union's €43-billion annual farm budget. But he agreed to lower the overall ceiling for EU agriculture spending in 2001, gambling on a better-than-expected performance on the commodity markets and a favourable euro-dollar exchange rate to avoid the need for higher expenditure.

"Fischler has agreed to lower the margin for manoeuvre next year," said a spokesman for the Farm Commissioner.

Under the deal, Fischler has reluctantly agreed to slice €100 million off the farm budget reserve and revise his estimates for expenditure in 2001. He is relying on spending on the beef and pork sectors being lower than originally expected and is hoping that savings can be made on the payments to farmers to compensate for currency fluctuations.

Schreyer admitted that the financial package endorsed by the full Commis-sion yesterday (23 February) would depend on her agriculture counterpart keeping a tight grip on spending. But she added: "If Fischler tells us this amount can be saved, I expect that he can manage that with his expertise."

She also announced that a further €300 million would be saved in 2002 through changes to the EU's sugar support regime.

As part of the deal, Fischler wants to carry over unspent funds from the Union's 2000 rural development budget into the 2001 kitty to give him himself greater flexibility next year.

The row erupted earlier this month after Schreyer called on the Agriculture Commissioner to cut spending to help cover a €3.6-billion shortfall in the money needed to pay for the Balkans Stability Pact over the next seven years. She said the Commission had esti-mated the region's total needs at €5.5 billion over this period, but the Agenda 2000 budget deal struck in Berlin last spring had only provided €1.85 billion.

Schreyer tried to persuade Fischler to find some of the extra money by launching a new round of reforms of the EU's Common Agricultural Policy. She wanted Fischler to begin cutting farmers' direct payments gradually to generate h300 million a year for the next six years, but this would have unstitched the agreement painfully put together by farm ministers and Union leaders in Berlin last spring.

A spokesman for Fischler insisted that he was not prepared to see that agreement renegotiated, adding: "He is adamant that the CAP is not a goldmine which you can keep taking money from whenever there are additional needs like the Balkans. This is a one-off deal."

Farm Commissioner Franz Fischler has agreed to shave €300 million off next year's agricultural spending to raise money for EU projects in the Balkans.