European Commission Conference on Reforming the Budget – CAP Proves the Most Controversial Topic
On 12 November the Commission held a stakeholder conference in Brussels on the EU Budget Review. This marks the close of the consultation exercise which began in September 2007. The high profile event was organised for the Commission in order to present a summary of the over 300 consultation responses received, as well as to give an opportunity for the stakeholders to discuss their views in person. While the EU budget was once the preserve of a few suited negotiators and economists, the number, quality and diversity of consultation responses show that the subject is now a hot topic all around Europe. This consultation exercise will feed into the next stage of the budget review debate in which the Commission will publish its budget proposals in a ‘political window’ some time next year.
While the EU budget was once the preserve of a few suited negotiators and economists, the number, quality and diversity of consultation responses show that the subject is now a hot topic all around Europe.
Opening the conference, José Manuel Barroso kept to a conservative script, perhaps reflecting his anticipated bid for re-election as President of the Commission next year. However, he did stress that the size of the budget has not kept up with the increasing areas of EU competency and that the EU should not be expected to take on new responsibilities without the appropriate funds. Interestingly, and perhaps rather surprisingly, the memory of Margaret Thatcher was raised by Barroso as well as a number of other speakers at the conference. They argued that even Eurosceptics like Baroness Thatcher had agreed that the EU should spend 1.24 per cent of its GNI but in reality EU was spending much less, around 1 per cent.
The summary of consultation responses was presented by Dalia Grybauskaite, EU Budget Commissioner. A full summary has been published in a Commission Working Document posted on the conference website.
…the Commissioner claimed that the CAP was the most controversial topic in the consultation.
While there was a strong consensus on the need to increase future funding on climate change, there was also a relatively broad consensus about the need to further reform CAP spending. Of course the opinions differed on the level of reform needed, and indeed the Commissioner claimed that the CAP was the most controversial topic in the consultation. An expectation of reduced spending on CAP was highlighted, especially in Pillar 1, with the gradual elimination of direct aid proposed by some stakeholders. Respondents placed an emphasis on increasing the competitiveness of European agriculture as well as it becoming more responsive to climate change, and needs related to food safety and quality. Some stakeholders suggested the reinforcement of Pillar 2 as well as the co-financing of Pillar 1 but total renationalisation of the policy was not supported.
Perhaps the most provocative suggestion presented by the Commissioner was to shift rural development funding to cohesion policy and presumably out of the CAP. How far this suggestion is related to the growing debate on the concept of Territorial Cohesion, which implies a more localised approach, is unclear.
… the Commissioner is reported to believe that radical reform of the CAP will have to come, if not from the next financial programming period beginning in 2014, then from the subsequent one, starting in 2021.
Speaking out further in an interview for the ‘E! Sharp’ magazine (1) the Commissioner is reported to believe that radical reform of the CAP will have to come, if not from the next financial programming period beginning in 2014, then from the subsequent one, starting in 2021. By this time, she argues ‘we could envisage the farm subsidies regime as it stands today being phased out. In Europe, its always easier to agree on options for the long term than to agree what will happen tomorrow, especially for governments that are under immediate electoral pressure’.
During the working groups and debates at the conference there was an absence of participation by Commission officials from the sectors most affected and so the views of DGs Agriculture, Environment and REGIO were not apparent. There were also fewer environmental stakeholders present than had contributed responses to the consultation. Conversely, the UK Treasury was well represented.
Tony Long, Director of the WWF’s European Policy Office, reminded the participants of the imperative of the EU’s spending to support its environmental and climate commitments. Failure to do so, he warned, will undermine the credibility of the EU. Stefan Tangermann, Director of the OECD Trade and Agriculture Directorate, presented a vision of a future CAP in which spending is mainly for public goods and a shift is made from decoupling to targeting spending to new challenges, such as environmental issues.
Stephen Hale from the UK Green Alliance also argued that the EU Budget would not be reformed unless EU spending is radically reorganised so as to increase public and political confidence and to move the debate away from national interests. Spending on the CAP has become increasingly unpopular with EU citizens as well as a number of Member States.
The Commission is expected to publish its proposal for budgetary reform next year. However, the timing is unclear.
The Commission is expected to publish its proposal for budgetary reform next year. However, the timing is unclear. While originally scheduled for the Spring of 2009, the timing is now argued to depend on the ‘best political window of opportunity’. According to the Budget Commissioner, the European Parliament elections next June, the nomination of the new Commission College over the summer and a potential second Irish referendum on the Lisbon Treaty in October will all influence the timing. The proposal must, however, be presented by the end of 2009.
The Commission has stated its intention to present three options for reform ranging from less to more radical. Each option will consist of three elements. The first element will be about policies – their quality, which ones to reform and how deeply, and which policies should be slowly phased out or phased in. The second element will be how to finance the budget – the own resources system and the third will be about delivery mechanisms – how transparent, how accountable and how flexible the budget is in reacting to a changing environment.
It is not clear, however, whether the content will be at the level of principles and priorities, or if the Commission will begin to bring in discussion of concrete figures.
It is not clear, however, whether the content will be at the level of principles and priorities, or if the Commission will begin to bring in discussion of concrete figures. The level of interest generated amongst stakeholders by the consultation process and the Commission’s obvious interest to move the EU budget away from political manoeuvring and the logic of ‘juste retour’ appear to indicate that at least some of the ideas and preferences revealed in this consultation exercise are fed into the next stage of the debate i.e. the Commission’s proposal. However, some of the more radical suggestions regarding the CAP, for instance, are unlikely to be welcomed by many Member States. On the other hand, they could increase the pressure for reform of the CAP over the course of the next ten years.
(1) O’Connor S. (2008) Budgeting for Changing Times. E! Sharp November – December 2008 (www.esharp.eu).
14 Nov 2008
Camilla Adelle, IEEP
The Institute for European Environmental Policy coordinates CAP2020. It is an independent not for profit institute which undertakes research in a number of policy areas including agriculture and rural development.