UK takes aim at farm subsidies

By Tim King

Date: 30/06/05

The unfinished business of agreeing on the EU budget for 2007-13 is passed from the Luxembourg presidency to the incoming UK presidency (albeit with not much grace or goodwill since Luxembourg blamed UK for the failure).

Some observers assume that the debate on the financial perspectives will now be frozen until Austria takes over the presidency in January 2006.

That is not an assumption shared by the UK government, which is adamant that it will try to advance the discussions, recognising that uncertainty over the EU's budget does not contribute to the Union's greater glory.

The UK is sensitive to accusations that its stance over the budget is damaging to the EU's new countries because delay would restrict their access to EU funds. UK officials argue that with or without the budget rebate, the UK is paying more for the ten newcomers than is France.

They point out that one of the reasons why the UK accepted the 2002 Franco-German agreement on farm spending was for fear that to do otherwise would prompt the French President Jacques Chirac to block EU enlargement.

Now controversy over the Common Agricultural Policy (CAP) threatens to divide the new member states. Some countries, like Poland, with sizeable agricultural sectors, stand to benefit from increased farm payments. Other countries, like Estonia, have little interest in sharing in the CAP and would happily see the CAP reduced as a proportion of EU spending.

Tony Blair, the UK prime minister, made concessions, of a sort, in the course of the Luxembourg-brokered negotiations. He said, as no previous UK leader had dared to do, that the rebate was an anomaly and should go, but he made that concession conditional on reform of the budget, to reduce the share devoted to agriculture. The best he can probably hope for is to obtain a meaningful commitment to substantial reform. Blair's challenge for the next six months is how to pursue such a controversial course while playing the presidential role of "honest broker".

Article discusses the likelihood of an agreement on the EU's financial framework for 2007-2013 during the UK Presidency of the Council, July to December 2005.