12 May 2000

Plan to use farming budget to rebuild Kosovo slammed

By Philip Clarke

BRUSSELS plans to dock the agricultural budget by l600m (£351m) over the next two years, to help rebuild Kosovo, were firmly rebuffed by EU finance ministers at their council meeting this week.

The proposal was presented by EU budget commissioner, Michaele Schreyer. She is looking to spend k5.5bn on the Western Balkans over the next six years, including k2.3bn for Serbia and k1.1bn for Kosovo.

To fund this the EU Commission requires an extra l1.8bn, above the figure agreed at last years Berlin Summit, and is looking to agriculture to pay the first two instalments of l300m each for the next two years.

The commission is insistent that this will not be damaging to farmers interests. In particular, it points to the weakness of the k against the $ which, according to Ms Schreyer, is likely to save the agriculture budget k500m this year, due to lower export subsidies.

Reform of the sugar regime should save a further k300m in 2002, said a spokesman for agriculture commissioner, Franz Fischler. "Mr Fischler has made it clear he does not consider the CAP to be a goldmine, but he is prepared to help out for 2001 and 2002, so long as he can maintain direct aid payments to farmers."

Despite this, finance ministers in their first debate on the subject, were lined up against the commission.

In particular, they opposed making any financial provision for Serbia while President Milosovic is still in power. Without that k2.3bn, there was enough money within the existing external relations budget to pay for reconstruction work in Kosovo, they argued.

Ministers also objected to the principle of moving any money from the agriculture budget. "If there are any savings, then they should not be reallocated," said one UK government source in Brussels.

The commission proposal now goes to the Finance Councils budget committee for further examination, and must also be voted on by the European Parliament, where it is likely to get equally rough passage.

"It is ridiculous that the commission is even thinking about making a charge on agriculture, when the Kosovo conflict was something that concerned the whole of society," said conservative MEP, Robert Sturdy, who sits on the agriculture committee. "We will fight this tooth and nail."

EU farmers group, COPA, also questioned the commissions assurance that removing k300m in each of the next two years would not affect farmers incomes. The k was not guaranteed to stay weak forever, said a spokeswoman, so it could not be assumed the savings in export refunds would necessarily materialise. &#42