‘Modernised’ EU funding means less for farming

UK foreign secretary Jack Straw has called for a more modern approach to EU funding, with less spent on agriculture and more on improving the EU’s overall efficiency.

In a new paper on the EU budget from 2007 to 2013, presented to foreign affairs ministers in Brussels on Monday (7 November), he also called for a fairer system of net contributions and suggested that some of the funds for rural development should be moved to a new “globalisation adjustment fund”.

The paper was designed to kick-start the debate on financial perspectives, which ground to a halt so spectacularly last June, when Prime Minister Tony Blair refused to give any ground on the UK’s annual rebate unless there was further reform of the CAP.

The UK, which now holds the EU presidency, says it is determined to secure a deal before the end of the year.

“It won’t be easy, but that will not stop us from trying,” Mr Straw told journalists after the meeting.

But sources at the meeting said progress was limited, with some member states critical that the UK paper made no mention of any numbers, just vague political statements.

Divisions also remained between the net contributors to the budget, such as Sweden and The Netherlands, which want to spend less on the EU, and net beneficiaries, especially southern member states, who reject any cuts.

Last June, the then Luxembourg presidency tabled a compromise which would have reduced total EU spending from 1.14% of gross national income to 1.06% – a saving of over 50bn (34bn) from the EU commission’s original seven-year plan (see table).

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It also suggested big cuts in planned spending on rural development and would have resulted in EU farmers’ single farm payments being trimmed to pay for Romanian and Bulgarian accession to the EU.

The UK this week said there were elements of this package which could form part of an agreement in December.

But Mr Straw added that “significant changes in the level of overall spending and the structure of EU funding will be necessary compared with that which was on the table in June if there is to be a deal reached in December”.

philip.clarke@rbi.co.uk