11 June 1998
EC establishes new subsidy system
THE European Commission yesterday established a temporary “agrimoney” system for paying EU farmers after the single currency is introduced in January next year.
The agrimoney system converts a range of farm subsidies from Ecu into national currencies.
Farmers in the four EU countries not adopting the euro at this stage – Britain, Denmark, Sweden and Greece – will supposedly be cushioned against the worst effects of currency changes under the system.
They will continue to receive compensation for currency fluctuations but it will be phased out over three years and stopped after 2002.
Compensation might also be offered to some farmers from member states joining the Euro from the outset. The commission fears that when monetary differentials are dismantled on 1 January, producers in some countries could see declines in prices and direct aids paid in national currencies.
Franz Fischler, EU farm commissioner, said the proposal adopted yesterday would virtually eliminate what he called one of the greatest complexities of the Common Agricultural Policy.
- Financial Times 11/06/98 page 2