EU has a year of confrontation

If one word can be used to sum up events of 2005 in Europe, it’s “confrontation”.

Arguments over the EU budget, the future of the CAP, the EU constitution, sugar reform and world trade talks have filled the column inches of this and many other magazines.

The most bitter row has been over the future financial perspectives for 2007 to 2013.

The issue was due to be settled at the EU summit under the Luxembourg presidency in June of this year, based on EU commission proposals for a substantial increase in funding to help meet the cost of enlargement.

But relations started to sour when French president Jacques Chirac – under intense political pressure at home – demanded an end to the British rebate as part of any deal on the budget.

UK Prime Minister Tony Blair struck back, demanding a major shake-up of the way funds were spent under the CAP, with less paid out to French farmers. The current budget was “not fit for the 21st century”, he railed.

Mr Blair’s problem was that he had already signed a deal in 2002 guaranteeing farm support until 2013. His was also a lone voice in trying to defend the British rebate and the June summit ended in disarray, with the UK said to be “more part of the crisis than part of the solution”.

All went quiet for a few months, but the issue resurfaced in the autumn as Mr Blair, stung by criticism that the UK’s presidency of the EU was a flop, committed himself to getting a budget deal by the end of December.

This was achieved last weekend, with heads of state agreeing to keep direct aids to farmers and market supports unchanged for 2007-2013, but to rein in spending on rural development (see p6). They also agreed to review EU funding, “including the CAP”, in 2008.

But while the budget issue has now been resolved, the EU constitution is stuck in limbo-land.

The original document was agreed by heads of state in June 2004, with the aim of streamlining the workings of the EU post-enlargement.

For agriculture, the constitution would also give the European Parliament a greater say in decision making.
All was going smoothly, with 10 member states approving the document in early 2005.

But then in May the French shocked the establishment by saying “non” to the constitution, followed by the Dutch in June.

Europhobes were quick to pronounce the constitution dead. The reality, however, is that the “no votes” were more to do with opposition to the national governments of France and Holland.

There is a general acceptance that many of the changes in the constitution are essential to ensure the smooth running of the EU, and member states will return to the matter in the first half of 2006.

The commission had greater success with its reform of the EU sugar regime.

Following publication of a White Paper in 2004, the debate began in earnest in early 2005. At that time, the sugar price cut being talked about was 33%.

But then, in May, the World Trade Organisation ruled that the EU’s sugar export policy was illegal, requiring further cuts in surplus production. The result was a 39% price cut by the time the commission tabled its formal proposals in June.

As negotiations headed into the autumn, it became clear that a deal would be done, with November the self-imposed deadline. EU farm ministers duly arrived in Brussels on 22 November, prepared for a long week of haggling.

It was testament to the management of the UK presidency that the whole process only took three days and a deal emerged based on a 36% price cut, 64% compensation for growers and a generous restructuring scheme that should see the EU’s least efficient sugar factories quit production.