News @ Justice & Home Affairs Council. The Council has recently reached an agreement with the European Parliament on the Directive for the protection of the environment through criminal law (at first reading, under the co-decision procedure). According to Hartmut Nassauer, European Parliament rapporteur, “we are setting a precedent” whilst stressing that criminal penalties might be extended to other areas than protection of environment. This Directive intends to harmonise the approach of Member States in the breach of EU environmental protection rules. Presently, there is no express power conferred by the EC Treaty to the Community to adopt criminal law measures.
In 2001, the European Commission proposed a Directive on the protection of the environment through criminal law however the Council had adopted a framework decision instead. In September 2005, the ECJ ruled that the Community had the competence to adopt criminal measures to ensure compliance with environmental protection rules and annulled the framework decision. Obviously, the ECJ ruling was an important victory for the European Commission which could not wait to initiate legislation in criminal matters. In February 2007 the European Commission had put forward a proposal for a Directive on the protection of the environment through criminal law aiming at replacing the Council Framework Decision annulled by the ECJ. The Directive will apply to breaches of Community law on the protection of the environment such as the illegal transport of waste, illegal trafficking of threatened species, the significant deterioration of protected habitats, unauthorized emissions into the water, air or soil, through dangerous activities which includes the production, storage and transportation of nuclear material, or the production and placing on the market or use of ozone depleting substances. Under the Directive such behaviour will be considered as a criminal offence throughout the EU when unlawful and committed intentionally or with serious negligence.
Member States are therefore required to introduce in their national legislation criminal penalties for serious violation of Community environmental protection law committed intentionally or by seriously neglect and to introduce the necessary measures to ensure that these offences are punishable by effective, proportionate and dissuasive criminal penalties. Under the Directive, inciting, aiding and abetting of such conduct will also be considered a criminal offence. The Commission was initially aiming at harmonizing the minimum levels for fines but this was withdrawn as the ECJ ruled that the Community does not have competence to determine the type and the level of the criminal sanctions.
The Lisbon Treaty confers powers on the Union to define criminal offences and sanctions when they are necessary for the implementation of one of its policies. The Justice and Home Affairs Council gave its blessing to this Directive on 6 June. The power to determine criminal liability and to impose criminal penalties is another sovereign power which has been transferred from Member States to Brussels.
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Tuesday, 24 June 2008
EU Parliament seeks larger role in foreign and defence policy
It is well known that the role played by the EU in the international arena would be enhanced if the Lisbon Treaty goes through. On 5 June, the European Parliament adopted two reports on the impact of the Lisbon Treaty on the EU’s Common Foreign and Security Policy (CFSP) and on the European Security and Defence Policy (ESDP). Obviously, the European Parliament wants to have a bigger role in these areas. The European Parliament adopted by a large majority (520 votes in favour) Jacek Saryusz-Wolskin’s own initiative report on the Council’s 2006 Annual Report on CFSP. The European Parliament welcomed the “improvements” introduced by the Treaty of Lisbon regarding external action, the CFSP and the ESDP, which will become the Common Security and Defence Policy (CSDP).
The European Parliament has stressed the necessity of improving EU political unity in order to strengthen the CFSP. Under the Lisbon Treaty, there is an overall transfer of further political power to EU level, through the new President of the European Council and the High Representative on Foreign and Security policy. All these changes would eliminate or diminish the ability of Member States to conduct their own foreign policy. The intergovernmental nature of the CFSP is maintained under the Lisbon Treaty however it increases the areas in which QMV would be applied to CFSP matters which includes decisions on proposals presented by the High Representative, all of which is unacceptable.
However, the European Parliament wants to scrap the veto on CFSP matters. According to the European Parliament, the Lisbon Treaty improves the existing CFSP arrangements but “further efforts are needed in order to streamline the decision-making process as regards foreign policy with a view to overcoming the veto power and introducing qualified majority voting.” The European Parliament has called for further transfer of power from the Member States to the Union. If the Lisbon Treaty goes through, the Union would not only have a “foreign affairs minister” but also a European external action service (EEAS), meaning a diplomatic service with delegations in several countries. The organisation and functioning of the EEAS will be established by a Council decision, acting by a QMV, on a proposal from the High Representative after consulting the European Parliament and obtaining the consent of the Commission. The European Parliament has stressed its right to be consulted on the establishment of the EEAS. Obviously the creation of the European external action service will challenge the distinction of European and national foreign policy priorities and interests. The Member States would no longer represent themselves but the Union on the international stage.
The European Parliament also adopted Helmut Kuhne’s own initiative report on the implementation of the European Security Strategy (ESS) and the European Security and Defence Policy (ESDP) by a large majority (500 votes in favour). According to Geoffrey Van Orden MEP, Conservative Spokesman on Defence, “This report is a manifesto for an EU takeover of our armed forces – the greatest prize for the federalists and their ambition to create a state called Europe.”
The European Parliament has invited the High Representative to include in a White Paper major proposals endeavouring to improving and complementing the European Security Strategy (ESS), mainly “the definition of common European security interests and criteria for the launching of ESDP missions.” The European Parliament has also called on the High Representative “to define new targets for civilian and military capabilities (…) and to reflect on the implications of the Lisbon Treaty with regard to ESDP and proposals for a new EU-NATO partnership.”
The European Parliament has welcomed the Lisbon Treaty’s major innovations in the area of ESDP such as the High Representative of the Union for Foreign Affairs and Security Policy, a European External Action Service, a provision on mutual defence assistance, a solidarity clause, permanent structured cooperation in the field of defence and an extension of the “Petersberg tasks.” The Common Security and Defence Policy would be further developed under the Lisbon Treaty. There would be a major transfer of power in this area from the Member States to the Union. The Lisbon Treaty would further the Union’s defence integration. UK relations with the rest of the world and NATO would be undermined. The Lisbon Treaty also introduces a provision for “permanent structured cooperation” between a group of Member States, allowing greater cooperation in the area of capabilities. The aim is to move forward in military and defence integration. It is a step towards a Single European Army. As this would not be enough, the European Parliament has asked the Member States to examine the possibility of possessing (under the terms of permanent structured cooperation, and as foreseen in the Lisbon Treaty) existing multinational forces such as Eurocorps, Eurofor, Euromarfor, the European Gendarmerie Force, the European Air Group, the European Air Coordination cell in Eindhoven, the Athens Multinational Sealift Coordination Centre and all relevant forces and structures for ESDP operations. As regards civilian crisis management and civil protection, the European Parliament has called upon the Commission to look into the possibilities for setting up of a specialised unit within the European external action service aiming to ensure a more coherent approach to civilian crisis management based on better coordination of internal EU instruments. Moreover, the European Parliament has stressed the importance of strengthening the conflict resolution civil capacity and consequently urged the establishment of an EU Civil Peace Corps for crisis management and conflict prevention. Furthermore, the European Parliament has reiterated its opinion that its is unacceptable that although the EU Code of Conduct on Arms Exports hits its tenth year in 2008, it is not yet legally binding. The European Parliament has stressed the need for the EU to have a leading role on strengthening the international arms control regime.
Geoffrey Van Orden has spoken against arms trade being surrendered to EU control. He has said “Britain is fortunate to possess the largest and most successful defence industry in Europe. Strategic industries and British jobs would be put at risk if the EU was allowed to bind us with more of its bureaucratic red tape.” The European Parliament has also called on the Council to assess the Battle Group concept in order to create a more extensive catalogue of available capabilities and to be in a position to promptly generate a force adequate to a mission’s circumstances. It also wants to set up within the EU Operations Centre a permanent planning and operational capability to conduct ESDP military operations. The MEPs have also proposed “to place Eurocorps as a standing force under EU command and invite all Member States to contribute to it.” Keeping in mind the training of those European forces, the European Parliament has called for a military ‘Erasmus’ programme. The European Parliament has welcomed the Commission’s proposals for a directive on defence procurement and for a Directive on intra-Community defence equipment transfers. The MEPs have stressed that the European Parliament should adopt a recommendation or resolution before the launch of any ESDP operation and have asked the Council to include in a decision authorising an ESDP operation a reference to a recommendation or resolution adopted by Parliament.
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The European Parliament has stressed the necessity of improving EU political unity in order to strengthen the CFSP. Under the Lisbon Treaty, there is an overall transfer of further political power to EU level, through the new President of the European Council and the High Representative on Foreign and Security policy. All these changes would eliminate or diminish the ability of Member States to conduct their own foreign policy. The intergovernmental nature of the CFSP is maintained under the Lisbon Treaty however it increases the areas in which QMV would be applied to CFSP matters which includes decisions on proposals presented by the High Representative, all of which is unacceptable.
However, the European Parliament wants to scrap the veto on CFSP matters. According to the European Parliament, the Lisbon Treaty improves the existing CFSP arrangements but “further efforts are needed in order to streamline the decision-making process as regards foreign policy with a view to overcoming the veto power and introducing qualified majority voting.” The European Parliament has called for further transfer of power from the Member States to the Union. If the Lisbon Treaty goes through, the Union would not only have a “foreign affairs minister” but also a European external action service (EEAS), meaning a diplomatic service with delegations in several countries. The organisation and functioning of the EEAS will be established by a Council decision, acting by a QMV, on a proposal from the High Representative after consulting the European Parliament and obtaining the consent of the Commission. The European Parliament has stressed its right to be consulted on the establishment of the EEAS. Obviously the creation of the European external action service will challenge the distinction of European and national foreign policy priorities and interests. The Member States would no longer represent themselves but the Union on the international stage.
The European Parliament also adopted Helmut Kuhne’s own initiative report on the implementation of the European Security Strategy (ESS) and the European Security and Defence Policy (ESDP) by a large majority (500 votes in favour). According to Geoffrey Van Orden MEP, Conservative Spokesman on Defence, “This report is a manifesto for an EU takeover of our armed forces – the greatest prize for the federalists and their ambition to create a state called Europe.”
The European Parliament has invited the High Representative to include in a White Paper major proposals endeavouring to improving and complementing the European Security Strategy (ESS), mainly “the definition of common European security interests and criteria for the launching of ESDP missions.” The European Parliament has also called on the High Representative “to define new targets for civilian and military capabilities (…) and to reflect on the implications of the Lisbon Treaty with regard to ESDP and proposals for a new EU-NATO partnership.”
The European Parliament has welcomed the Lisbon Treaty’s major innovations in the area of ESDP such as the High Representative of the Union for Foreign Affairs and Security Policy, a European External Action Service, a provision on mutual defence assistance, a solidarity clause, permanent structured cooperation in the field of defence and an extension of the “Petersberg tasks.” The Common Security and Defence Policy would be further developed under the Lisbon Treaty. There would be a major transfer of power in this area from the Member States to the Union. The Lisbon Treaty would further the Union’s defence integration. UK relations with the rest of the world and NATO would be undermined. The Lisbon Treaty also introduces a provision for “permanent structured cooperation” between a group of Member States, allowing greater cooperation in the area of capabilities. The aim is to move forward in military and defence integration. It is a step towards a Single European Army. As this would not be enough, the European Parliament has asked the Member States to examine the possibility of possessing (under the terms of permanent structured cooperation, and as foreseen in the Lisbon Treaty) existing multinational forces such as Eurocorps, Eurofor, Euromarfor, the European Gendarmerie Force, the European Air Group, the European Air Coordination cell in Eindhoven, the Athens Multinational Sealift Coordination Centre and all relevant forces and structures for ESDP operations. As regards civilian crisis management and civil protection, the European Parliament has called upon the Commission to look into the possibilities for setting up of a specialised unit within the European external action service aiming to ensure a more coherent approach to civilian crisis management based on better coordination of internal EU instruments. Moreover, the European Parliament has stressed the importance of strengthening the conflict resolution civil capacity and consequently urged the establishment of an EU Civil Peace Corps for crisis management and conflict prevention. Furthermore, the European Parliament has reiterated its opinion that its is unacceptable that although the EU Code of Conduct on Arms Exports hits its tenth year in 2008, it is not yet legally binding. The European Parliament has stressed the need for the EU to have a leading role on strengthening the international arms control regime.
Geoffrey Van Orden has spoken against arms trade being surrendered to EU control. He has said “Britain is fortunate to possess the largest and most successful defence industry in Europe. Strategic industries and British jobs would be put at risk if the EU was allowed to bind us with more of its bureaucratic red tape.” The European Parliament has also called on the Council to assess the Battle Group concept in order to create a more extensive catalogue of available capabilities and to be in a position to promptly generate a force adequate to a mission’s circumstances. It also wants to set up within the EU Operations Centre a permanent planning and operational capability to conduct ESDP military operations. The MEPs have also proposed “to place Eurocorps as a standing force under EU command and invite all Member States to contribute to it.” Keeping in mind the training of those European forces, the European Parliament has called for a military ‘Erasmus’ programme. The European Parliament has welcomed the Commission’s proposals for a directive on defence procurement and for a Directive on intra-Community defence equipment transfers. The MEPs have stressed that the European Parliament should adopt a recommendation or resolution before the launch of any ESDP operation and have asked the Council to include in a decision authorising an ESDP operation a reference to a recommendation or resolution adopted by Parliament.
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The Commission strikes again on UK budgetary control
News @ European Commission. On 11 June, the European Commission adopted a report according to Article 104 (3) of the EC Treaty, to initiate the excessive deficit procedure for the United Kingdom. The European Commission adopted the report following the UK notification, in March 2008, of a planned deficit of 3.2 per cent of GDP in financial year 2008-09, which is above 3 per cent of GDP – the Treaty reference value.
The Commission has stressed that the planned figure for 2008-09 provides evidence of the existence of an excessive deficit in the UK which was confirmed by the spring forecast. The Commission has accepted that the planned deficit is close to the reference value and has concluded that the UK’s planned excess over the deficit over the reference value cannot be qualified as exceptional within the terms of the Treaty and the Stability and Growth Pact, or temporary. Therefore the Commission has suggested that the UK is not respecting the deficit criterion established in the Treaty. Hence, the Commission has issued a warning for the UK to keep the budget deficit under the 3 per cent GDP level.
The UK is therefore under EU pressure to improve its finances. The Commission has already warned that tax cuts would further sprain public finances. Consequently, Alistair Darling might raise taxes to reduce the deficit. The initiation of the excessive deficit procedure against the UK though would not lead to financial sanctions if the UK does not follow the recommendations but it raises doubts over Alistair Darling’s management of public finances. The report will be assessed by the Ecofin Council.
On 5 June, the European Commission has also lodged a formal complaint to the ECJ against the UK for alleged failure to comply with European employment legislation relating to road transport activities. According to the Commission, the UK has not informed it of its national measures transposing Directive 2006/22/EC which regulates the controls that Member States have to carry out in order to ensure compliance with rules on driving time and rest periods. Member States were required to adopt the necessary legislation before 1 April 2007. Moreover, the Commission has also sent a reasoned opinion against the UK for alleged failure to fully transpose Directive 2005/45/EC into national law on the mutual recognition of seafarers’ certificates issued by the Member States. Member States had until October 2007 to transpose the Directive. It is aimed at encouraging mobility of seafarers within the European Union. The UK will have to adapt its national legislation on maritime transport if it does not want to find itself before the ECJ.
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The Commission has stressed that the planned figure for 2008-09 provides evidence of the existence of an excessive deficit in the UK which was confirmed by the spring forecast. The Commission has accepted that the planned deficit is close to the reference value and has concluded that the UK’s planned excess over the deficit over the reference value cannot be qualified as exceptional within the terms of the Treaty and the Stability and Growth Pact, or temporary. Therefore the Commission has suggested that the UK is not respecting the deficit criterion established in the Treaty. Hence, the Commission has issued a warning for the UK to keep the budget deficit under the 3 per cent GDP level.
The UK is therefore under EU pressure to improve its finances. The Commission has already warned that tax cuts would further sprain public finances. Consequently, Alistair Darling might raise taxes to reduce the deficit. The initiation of the excessive deficit procedure against the UK though would not lead to financial sanctions if the UK does not follow the recommendations but it raises doubts over Alistair Darling’s management of public finances. The report will be assessed by the Ecofin Council.
On 5 June, the European Commission has also lodged a formal complaint to the ECJ against the UK for alleged failure to comply with European employment legislation relating to road transport activities. According to the Commission, the UK has not informed it of its national measures transposing Directive 2006/22/EC which regulates the controls that Member States have to carry out in order to ensure compliance with rules on driving time and rest periods. Member States were required to adopt the necessary legislation before 1 April 2007. Moreover, the Commission has also sent a reasoned opinion against the UK for alleged failure to fully transpose Directive 2005/45/EC into national law on the mutual recognition of seafarers’ certificates issued by the Member States. Member States had until October 2007 to transpose the Directive. It is aimed at encouraging mobility of seafarers within the European Union. The UK will have to adapt its national legislation on maritime transport if it does not want to find itself before the ECJ.
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US frustrated as EU Commission remains defiant in lifting chicken ban
News @ European Commission. The credibility of the Transatlantic Economic Council (TEC) is at stake as the Commission will not be able to honour its commitments. On 13 May, Gunther Verheugen, Vice President of the European Commission and TEC chairman had promised that the Commission would put forward a proposal to lift the 1997 EU ban on the US chlorinated chickens (see The European Journal, June issue). On 28 May, the European Commission has submitted the proposal to the Standing Committee on Food Chain and Animal Health. The Commission’s Draft Regulation establishes strict rules and criteria for the use of antimicrobial substances. Operators would be required to set up controls to check the potential effects of the use of such substances. Moreover, operators are required under the Commission proposal to affix the sign of “chemical decontamination” or “treated with antimicrobial substances” on the poultry packaging. The operators are also required to rinse the poultry carcasses with potable water after treatment.
The Commission’s proposal sets a temporary authorisation of two years for the import of chickens for human consumption treated with chlorinate. Mr Verheugen has made significant efforts to work with the United States however he may have provided false hopes, as it will be very difficult for Member States to approve the proposal. At the Agriculture Council which took place on 19 May, it became clearer that the majority of the EU agriculture ministers are against the idea of authorising US poultry in the EU market. The poultry issue is among the main priorities of the TEC.
The US has already criticised the Commission’s proposal. Daniel Price, the Co-Chairman of the TEC, has said, according to Europolitics, that the Commission’s proposal “is the functional equivalent of leaving the ban in place.” According to Price, the European Commission is already undermining the TEC, adding, “The message being sent out is that if an issue is politically difficult or affects the commercial interests of local domestic constituents, it may not be appropriate for the TEC. This really is not about the poultry trade – it is about the TEC’s integrity.”
The Standing Committee on the Food Chain and Animal Health voted on 2 June to keep the ban on US poultry imports, rejecting the European Commission proposal. All the EU Member States, with the exception of the UK which has abstained, have voted to keep in place the ban on imports of poultry rinsed in chlorine. According to the comitology rules, the Commission’s proposal will go to the Agriculture Council which is very likely to reject the proposal as the EU agriculture ministers have recently shown their opposition to such measure. This is effectively a blow to the EU and US trade relations. Günter Verheugen has promised that it would work with the Member States in order to find an agreement on lifting the ban on US chickens but up until now, it has achieved the opposite. The TEC’s credibility is already at stake in achieving little in the way of removing barriers to transatlantic trade. The EU-US Summit took place on 10 June and trade tensions are set to stay rather than be sorted. The summit unsurprisingly has not brought any major developments. According to a Joint Declaration, the EU and US have welcomed the work of the Transatlantic Economic Council yet it was stressed that that in order “To fulfill the TEC's mandate of creating a barrier-free transatlantic market, it is essential that both sides follow through on their commitments ….” The US is already considering taking the issue to the World Trade Organisation. In order for the TEC to start producing results, Gunter Verheugen needs support from the EU presidency which does not seem likely during the French presidency as it is obvious that France is not willing to remove regulatory trade barriers.
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The Commission’s proposal sets a temporary authorisation of two years for the import of chickens for human consumption treated with chlorinate. Mr Verheugen has made significant efforts to work with the United States however he may have provided false hopes, as it will be very difficult for Member States to approve the proposal. At the Agriculture Council which took place on 19 May, it became clearer that the majority of the EU agriculture ministers are against the idea of authorising US poultry in the EU market. The poultry issue is among the main priorities of the TEC.
The US has already criticised the Commission’s proposal. Daniel Price, the Co-Chairman of the TEC, has said, according to Europolitics, that the Commission’s proposal “is the functional equivalent of leaving the ban in place.” According to Price, the European Commission is already undermining the TEC, adding, “The message being sent out is that if an issue is politically difficult or affects the commercial interests of local domestic constituents, it may not be appropriate for the TEC. This really is not about the poultry trade – it is about the TEC’s integrity.”
The Standing Committee on the Food Chain and Animal Health voted on 2 June to keep the ban on US poultry imports, rejecting the European Commission proposal. All the EU Member States, with the exception of the UK which has abstained, have voted to keep in place the ban on imports of poultry rinsed in chlorine. According to the comitology rules, the Commission’s proposal will go to the Agriculture Council which is very likely to reject the proposal as the EU agriculture ministers have recently shown their opposition to such measure. This is effectively a blow to the EU and US trade relations. Günter Verheugen has promised that it would work with the Member States in order to find an agreement on lifting the ban on US chickens but up until now, it has achieved the opposite. The TEC’s credibility is already at stake in achieving little in the way of removing barriers to transatlantic trade. The EU-US Summit took place on 10 June and trade tensions are set to stay rather than be sorted. The summit unsurprisingly has not brought any major developments. According to a Joint Declaration, the EU and US have welcomed the work of the Transatlantic Economic Council yet it was stressed that that in order “To fulfill the TEC's mandate of creating a barrier-free transatlantic market, it is essential that both sides follow through on their commitments ….” The US is already considering taking the issue to the World Trade Organisation. In order for the TEC to start producing results, Gunter Verheugen needs support from the EU presidency which does not seem likely during the French presidency as it is obvious that France is not willing to remove regulatory trade barriers.
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Franco-German united front against CAP reform
News @ European Commission. Mariann Fischer-Boel, Commissioner for Agriculture and Rural Development, has recently unveiled the Commission’s proposals for the so-called CAP Health Check. The Commission’s proposal does very little to boost farm competitiveness, to phase out all the price support measures and to cut bureaucracy. The situation is likely to get even worse through the negotiations as several Member States such as France and Germany believe that the Commission’s proposals are too ambitious since they both want to keep the coupled payment system and market instruments. It is very likely the UK will have few or none of its demands met through the negotiation process.
CAP has been through recent reforms but it continues to be one of the most expensive EU common policies, it imposes substantial costs on developing countries as well as on EU consumers and taxpayers. Tony Blair not only gave up part of the UK rebate but there appears to be no serious CAP reform on the way. The Government has stressed, on its longer term vision for the CAP, published in 2005, that “the CAP has been estimated to be equivalent to a value added tax on food of around 15 per cent” and that “removing market price support would bring a one-off reduction in inflation of 0.9 per cent.” The European Commission has proposed to increase decoupling, strengthen rules on cross compliance, reduce market intervention mechanisms and increasing modulation. However, the Commission’s proposal to reform CAP is far from satisfactory.
The Commission has proposed further decoupling, meaning reducing the link between how much farmers produce and how much financial support they receive from the CAP with the exceptions of suckler cows, goat and sheep premia where Member States would be allowed to maintain the coupled support. Whereas the UK favour direct aid to be completely decoupled from production, several EU Member States such as France, Portugal, Germany and Romania, are not convinced by the Commission’s proposals on decoupling as they believe it will not promote production.
The Commission has pointed out that in order to strengthen the EU efforts in the field of climate change, renewable energy, water management and biodiversity, additional funding is needed. The Commission believes that “the best way of meeting them is through Rural Development policy.” Therefore, it has proposed to increase the transfer of direct payments to the Rural Development budget by 8 per cent. Modulation provides a mean to ensure the transfer of subsidy funds from Pillar 1 of the CAP (guarantee expenditure and single farm payments) to Pillar 2 (rural development and agri-environmental schemes). Some Member States are concerned that the rural development support will come at expense of market supports and subsidies.
Presently, all direct aid payments of more than €5,000 are reduced by 5 per cent and the money is transferred into the Rural Development budget. The Commission wants to make further cuts for bigger farms. It has proposed that any amount of direct payments to be granted to a farmer that exceeds EUR 5,000 shall be reduced for each year until 2012 by the following way “2009: 7%, 2010: 9%, 2011: 11%, 2012: 13%.” However, several Member States such as Germany are concerned that reducing subsidies to big farmers might lead to splits into smaller farms in order to qualify for subsidies. The Commission has also proposed to replace the present intervention systems under which farmers are able to sell stock into EU reserves if they cannot get a decent price for their produce on the market into a “genuine safety net.” It has proposed to abolish the existing intervention mechanisms for durum wheat, rice and pig meat. Intervention will be set at zero for feed grains and tendering will be introduced for bread wheat, butter and skimmed milk powder. The UK has been demanding the end of all market instruments whereas France does not want to give up market interventions. The Commission has also proposed to abolish existing rules on keeping 10 per cent of farmers’ arable land untouched.
Unsurprisingly, the Commission’s proposed reform has not pleased France and Germany which united forces to defend the present CAP. France and Germany have been arguing that CAP is needed to keep food price stability in the EU as well as to protect farmers through the import tariff system. On the other hand, the UK has been demanding serious CAP reform. France and Germany are completely against the idea of cutting farm subsidies. Mr. Darling has called for a “phasing out all elements of the CAP that are designed to keep EU prices above world market levels (such measures cost EU consumers 43 billion euros in 2006), an end to direct payments for EU farmers (which cost EU taxpayers 34 billion euros in 2006).”
Mr Seehofer, Germany’s Agriculture Minister, has said “we have to make sure that we can provide this continent with food sustainability. This cannot be done by taking away subsidies from European farmers.” Yet, Alistair Darling believes that is “unacceptable that, at a time of significant food price inflation, the EU continues to apply very high import tariffs to many agricultural commodities.” According to Michel Barnier, French agriculture minister, “The solution to the crisis is not, first of all, through free trade (…).” Mariann Fischer Boel has dismissed the French claims, saying “I am not interested in a protectionistic approach to the agricultural production in Europe (…).” Nevertheless, she has also dismissed the UK position, while saying “The market has a very important role to play, but left to itself, it will not care for our landscapes or respond to other public demands.” Moreover, she said, “This is not the time to scrap the CAP, as some have proposed.”
The EU Agriculture Minister will further discuss the Commission’s CAP health check at the Agriculture Council in June which will face opposition from several Member States. On the one hand, France and Germany defend farm subsidies while on the other hand, the UK wants to scrap them. France will be wearing the EU helmet in July and ironically the CAP reform will be debated during its presidency. France being the biggest beneficiary of CAP does not want to see a reduction on farm subsidies. The Commission’s proposals are expected to be adopted by the Council by the end of the year and come into force in 2009.
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CAP has been through recent reforms but it continues to be one of the most expensive EU common policies, it imposes substantial costs on developing countries as well as on EU consumers and taxpayers. Tony Blair not only gave up part of the UK rebate but there appears to be no serious CAP reform on the way. The Government has stressed, on its longer term vision for the CAP, published in 2005, that “the CAP has been estimated to be equivalent to a value added tax on food of around 15 per cent” and that “removing market price support would bring a one-off reduction in inflation of 0.9 per cent.” The European Commission has proposed to increase decoupling, strengthen rules on cross compliance, reduce market intervention mechanisms and increasing modulation. However, the Commission’s proposal to reform CAP is far from satisfactory.
The Commission has proposed further decoupling, meaning reducing the link between how much farmers produce and how much financial support they receive from the CAP with the exceptions of suckler cows, goat and sheep premia where Member States would be allowed to maintain the coupled support. Whereas the UK favour direct aid to be completely decoupled from production, several EU Member States such as France, Portugal, Germany and Romania, are not convinced by the Commission’s proposals on decoupling as they believe it will not promote production.
The Commission has pointed out that in order to strengthen the EU efforts in the field of climate change, renewable energy, water management and biodiversity, additional funding is needed. The Commission believes that “the best way of meeting them is through Rural Development policy.” Therefore, it has proposed to increase the transfer of direct payments to the Rural Development budget by 8 per cent. Modulation provides a mean to ensure the transfer of subsidy funds from Pillar 1 of the CAP (guarantee expenditure and single farm payments) to Pillar 2 (rural development and agri-environmental schemes). Some Member States are concerned that the rural development support will come at expense of market supports and subsidies.
Presently, all direct aid payments of more than €5,000 are reduced by 5 per cent and the money is transferred into the Rural Development budget. The Commission wants to make further cuts for bigger farms. It has proposed that any amount of direct payments to be granted to a farmer that exceeds EUR 5,000 shall be reduced for each year until 2012 by the following way “2009: 7%, 2010: 9%, 2011: 11%, 2012: 13%.” However, several Member States such as Germany are concerned that reducing subsidies to big farmers might lead to splits into smaller farms in order to qualify for subsidies. The Commission has also proposed to replace the present intervention systems under which farmers are able to sell stock into EU reserves if they cannot get a decent price for their produce on the market into a “genuine safety net.” It has proposed to abolish the existing intervention mechanisms for durum wheat, rice and pig meat. Intervention will be set at zero for feed grains and tendering will be introduced for bread wheat, butter and skimmed milk powder. The UK has been demanding the end of all market instruments whereas France does not want to give up market interventions. The Commission has also proposed to abolish existing rules on keeping 10 per cent of farmers’ arable land untouched.
Unsurprisingly, the Commission’s proposed reform has not pleased France and Germany which united forces to defend the present CAP. France and Germany have been arguing that CAP is needed to keep food price stability in the EU as well as to protect farmers through the import tariff system. On the other hand, the UK has been demanding serious CAP reform. France and Germany are completely against the idea of cutting farm subsidies. Mr. Darling has called for a “phasing out all elements of the CAP that are designed to keep EU prices above world market levels (such measures cost EU consumers 43 billion euros in 2006), an end to direct payments for EU farmers (which cost EU taxpayers 34 billion euros in 2006).”
Mr Seehofer, Germany’s Agriculture Minister, has said “we have to make sure that we can provide this continent with food sustainability. This cannot be done by taking away subsidies from European farmers.” Yet, Alistair Darling believes that is “unacceptable that, at a time of significant food price inflation, the EU continues to apply very high import tariffs to many agricultural commodities.” According to Michel Barnier, French agriculture minister, “The solution to the crisis is not, first of all, through free trade (…).” Mariann Fischer Boel has dismissed the French claims, saying “I am not interested in a protectionistic approach to the agricultural production in Europe (…).” Nevertheless, she has also dismissed the UK position, while saying “The market has a very important role to play, but left to itself, it will not care for our landscapes or respond to other public demands.” Moreover, she said, “This is not the time to scrap the CAP, as some have proposed.”
The EU Agriculture Minister will further discuss the Commission’s CAP health check at the Agriculture Council in June which will face opposition from several Member States. On the one hand, France and Germany defend farm subsidies while on the other hand, the UK wants to scrap them. France will be wearing the EU helmet in July and ironically the CAP reform will be debated during its presidency. France being the biggest beneficiary of CAP does not want to see a reduction on farm subsidies. The Commission’s proposals are expected to be adopted by the Council by the end of the year and come into force in 2009.
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