UK food and farming minister Lord Donoughue warned the European single currency could lead to greater volatility in the value of farm subsidies between countries in the Euro zone and those outside.
He told delegates at a London conference on European Monetary Union, organised by Farmers Weekly, the start of the Euro would mean a thorough overhaul of the European Unions agrimonetary system. This translates Ecu-based subsidies into national currencies.
Arrangement would still be needed to convert Common Agricultural Policy payments into national currencies for countries not signing up next year, he said.
A successor to the “green rate” system must be simpler, more transparent and less costly, he said. And he warned that difficult negotiations with those entering the Euro lay ahead for those countries not participating.
The minister said those joining the Euro would be keen to make sure the entry rate was as generous to farmers as the green rate. There might be demands for transitional compensation if this was not so.
Serious negotiations on a new system are expected from May.
Robert Gooch, of the Eurinco consultancy, told the conference British farming was set for a “roller-coaster ride” in the wake of EMU from the start of 1999.
But Ben Gill, president of the National Farmers Union, said Britain should join as soon as possible. He warned it was dangerous for Britain to stay out for too long.
- Financial Times 24/02/98 page 33
- The Scotsman 24/02/98 page 29