13 August 1999

How Europe really works

THINK of Brussels and what image springs to mind?

If you are a tourist, its probably the grandeur of the Grande Place or that little boy peeing into one of the fountains.

If you are a consumer or taxpayer, you more likely think of a place where politicians and farmer leaders meet over mussels and chips to sort out the next round of cash hand-outs.

And if you are a farmer, you may imagine faceless civil servants, beavering away in equally bland offices, producing ever-more obscure rules and regulations with which to trap you.

The reality is somewhat different, of course.

Get away from the historic centre and the architecture is not that great.

The balance of power is also shifting, with consumers and taxpayers having an increasing say in how things are run.

The bit about civil servants probably applies, but that is the same the world over. But, whatever your perception, there is no denying that, as far as agriculture is concerned, Brussels is the single most important factor determining the profitability, (or otherwise), of most farm businesses.

To dispel the myths and offer some guidance, Europe editor Philip Clarke looks at how the institutions really work.

GLOSSARY

IF, LIKE most people, you think of decoupling as something that goes on in railway sidings and horizontal measures as coming in feet and inches, then clearly you need help. The following aims to guide you through the maze that is Euro-jargon.

Agenda 2000The whole package of measures designed to prepare the EU for the new millennium. Includes a new finance package, preparations for eastward enlargement, improving the conditions of the poorest regions and reforming the common agricultural policy.

Accompanying measuresIntroduced in the1992 reforms, these include agri-environment schemes, forestry and early retirement. They are now incorporated in the rural development package under Agenda 2000, together with training, aid for young farmers and promotion.

Blue boxAgricultural subsidies that do not directly stimulate production, but are not totally decoupled either. They are typically linked to some production limiting programme, such as set-aside or headage limits, and include area aid and livestock premia. They are currently protected under the last GATT round, but could be re-negotiated in the next WTO talks.

CappingA form of modulation, in which payments are limited to a certain upper limit per farm. Optional under Agenda 2000.

Co-financingMeasures where the cost is shared between Brussels and the national authorities.

Cohesion fundA relatively small EU fund, providing special assistance to the unions four poorest countries – Ireland, Spain, Portugal and Greece.

COPA/COGECACOPA is the association of EU farming unions, including the NFU. COGECA is the association for EU co-operatives.

Cross complianceMaking payments to farmers conditional on meeting certain environmental or animal welfare improvements

De-couplingBreaking the link between subsidies and production. Countryside Stewardship Scheme payments are totally decoupled. The old sheep variable premium was not.

DegressivityThe process by which direct income payments to farmers are reduced over time. Favoured by the UK government for several years, it was dropped in the final stages of negotiating Agenda 2000.

DirectiveA broad piece of EU legislation that sets out certain objectives, (for example, on nitrate levels in water). It is left to national legislation to deliver these objectives.

EnlargementThe process of expanding the EU to the east. Hungary, Poland, Estonia, the Czech Republic, Slovenia and Cyprus form the first wave, which could join as soon as 2003.

European modelThe European model of farming stresses agricultures multifunctional role. This includes production competitiveness, secure food supply, protection of the environment, creation of jobs and reducing the gap between rich and poor farmers.

Green boxAgricultural subsidies which are totally de-coupled and, as such, escape any cuts under the last GATT round and impending WTO round. Environmental payments and retirement grants are green box payments.

GuidelineThe agricultural guideline limits the amount by which farm spending can expand to 74% or less of the rate at which EU gross domestic product increases.

Horizontal measuresPolicies such as cross-compliance, modulation and capping which are applied "horizontally" across all member states.

Millenium roundThe next round of World Trade Organisation talks, which get under way in Seattle this November and is expected to last at least three years. The negotiations will cover matters such as environmental protection and animal welfare standards, as well as traditional trade protection measures such as export subsidies and import tariffs.

ModulationThe linking of direct income aids to the level of employment and/or profitability on a holding. This is optional under Agenda 2000 and may only cover up to 20% of payments.

National envelopeFunds which are allocated by Brussels to national governments to spend on CAP support measures, (such as suckler cow premium), as they best see fit, within certain guidelines.

Own resourcesThe system of financing the EU, in which member state contributions are linked to gross national product.

Official journalEU legislation does not take effect until it is published in the Official Journal, usually a few weeks after decisions are made. Regulations, directives and decisions are published in the "L" series, opinions and recommendations in the "C" series.

Qualified majorityThe most common method by which council decisions are taken. Different member states have different numbers of votes. For example, the UK, France, Germany and Italy have 10 each. Luxembourg has two. A qualified majority is reached when 62 out of the 87 votes available are cast the same way.

RegulationA binding piece of EU legislation which all member states have to adhere to.

Second pillarRural development measures, (such as environmental protection, aid to young farmers, early retirement schemes and investment aid), enshrined in Agenda 2000, have been dubbed the "second pillar".

Special Committee on AgricultureThe special committee, or SCA, serves the agriculture council and is made up of senior civil servants from each of the 15 members states. It reviews draft legislation and is an important sounding board ahead of key ministerial meetings.

Structural fundsThese funds are intended to aid regional development, through better infrastructure, education and employment in some of the EUs poorest regions. Eligibility has been streamlined, (to Objective 1,2 and 3), under Agenda 2000.

Subsidiarity

The principle by which decisions are taken at the lowest appropriate level of government. Thus the re-routing of a footpath will be decided by a local authority rather than the council of ministers.

UKREPThe team of UK civil servants in Brussels who represent domestic interests in the work of the EU.

THECOMMISSION

SOMETIMES described as "the heart" of the EU, the commission is the body which designs and proposes new legislation.

Previously based in the famous Berlaymont building, the commissions 15,000 staff are now scattered around Brussels, following problems with high asbestos levels in the former headquarters.

The commission is headed up by the 20 commissioners – appointed for a five-year term by the 15 member states – who meet every Wednesday. Key players, like the UK, France and Germany, have two commissioners each. Following the mass resignation of the entire commission last March, a new team is currently up for consideration. UK nominations are former Labour leader, Niel Kinnock, (up for a second term) and former governor of Hong Kong, Chris Patten. The European parliament will approve the final line-up in mid-September, with the farm portfolio heading back to Austrian, Franz Fischler.

The commission is divided into 26 different directorates-general, including DG6 (agriculture) and DG24 (consumer affairs) which do the day-to-day work.

As well as proposing new legislation, the commission is responsible for policing existing laws, to make sure all member states comply. It has the right to impose fines.

It also manages agricultural and regional policy, and controls EU expenditure. For example, the cereals management committee meets every Thursday to set export subsidies and adjudicate intervention tenders.

The commission also has considerable powers to "fill in the gaps" of Council legislation.

The work of the commission is constantly scrutinised by the other institutions of the EU, in particular the European parliament.

THEPARLIAMENT

TRADITIONALLY seen as the weakest of the three main institutions, the parliament is now acquiring more influence in the running of the EU.

The only directly elected body, the parliament is made up of 626 MEPs, representing almost 100 different political parties. These are organised into eight broader groups, of which the Party of European Socialists and the European Peoples Party (mainly Christian democrats) are the main two. Recent elections in May saw a shift in political balance towards the right.

The European parliament meets every month in its palatial new offices in Strasbourg. But most of its work is carried out in palatial new offices in Brussels. Each month, literally thousands of staff decamp from Brussels to Strasbourg for the plenary session, in an operation that keeps many a haulier and hotelier in business. The secretariat is based in Luxembourg.

Historically, the parliaments powers were restricted to approving the EUs budget – currently valued at E80bn (£57bn). It is able to amend commission proposals and, with the exception of the agricultural budget, decide the final amounts.

It is also responsible for monitoring expenditure and can even force the entire commissions resignation in cases of maladministration and fraud.

In recent years the parliament has been given more powers over some areas of legislation, either through co-operation with Council (in which it can make amendments in areas such as regional development and environmental policy) or through co-decision, (in which it can throw out legislation in areas such as consumer protection and health).

The 1997 Amsterdam Treaty has extended the range of issues covered by co-decision from 15 to 38.

Farm policy, however, is still dealt with under the old consultation procedure, in which parliament is asked for its opinion on new legislation, but may be ignored by the commission and council.

Parliament has the important job of appointing the president and members of the commission, and scrutinising their performance.

THECOUNCIL

THE council is the EUs principal decision-making body. It amends and adopts commission proposals which then become EU law.

Based in the Justus Lipsius building in Brussels, council is made up of 15 ministers – one from each member state. A different council is convened for various subjects, including agriculture, economic/financial affairs and general affairs. These three meet monthly, while lesser councils, such as environment or education, meet only occasionally.

The council presidency changes hands every six months, and is currently held by Finland.

The agriculture council, currently headed by Finnish farm minister Kalevi Hemila, is serviced by the special committee on agriculture (SCA), which is made up of top civil servants from each member state. The SCA prepares detailed papers and draft legislation.

Most legislation has to be passed by what is known as a "qualified majority" of ministers. Each member state is given a certain number of votes, according to population, as follows: UK: 10, Germany: 10, France: 10, Italy: 10, Spain: 8, Greece: 5, Netherlands: 5, Belgium: 5, Portugal: 5, Sweden: 4, Austria: 4, Denmark: 3, Finland: 3, Ireland: 3, Luxembourg: 2.

A qualified majority is achieved when 62 out of 87 votes are cast the same way. Conversely, a "blocking minority" is achieved with 26 votes. Thus, if the UK (10), Italy (10), Sweden (4) and Denmark (3) team up on any issue, they hold 27 votes and can block the legislation.

On issues of greater political sensitivity, a unanimous vote is required, while on other issues, a simple majority of eight ministers will suffice.

Usually, when the council passes a new law, the actual implementation is left to the commission.

THEOTHERS

European Court of Justice: Based in Luxembourg, the courts main job is to uphold the laws of the EU, and ensure the same interpretation by all member states. There are 15 judges and nine advocate generals, who may be called upon to decide on cases brought by national governments, the commission or other EU institutions. They may also be asked to give national courts guidance on points of community law.

European Court of First Instance: Attached to the court of justice, the court of first instance deals with actions brought by private individuals and companies against the EU institutions.

European Court of Auditors: The taxpayers watchdog, the court of auditors checks that the EU institutions, and in particular the commission, stick to the budgetary rules. It has the power to make spot checks, aiming to crack fraud.

The Economic and Social Committee: There are some 222 members of the economic and social committee, drawn from a cross section of society. Their job is to issue opinions on various subjects, so as to give an independent input into the legislative process.

The Committee of the Regions: A consultative body, made up of local government representatives, dealing with subjects such as regional policy and health.