Brussels, 31/10/2012 (Agence Europe) - On Wednesday 31 October, Bernard Cazeneuve, deputy French European affairs minister, rejected the suggested cut in funding for the Common Agricultural Policy (CAP) set out in the draft Cypriot compromise on the multiannual financial framework (MFF), the EU's budget for 2014-2020. France says the CAP was already seriously slimmed down in the European Commission's initial draft budget and France will not back a multiannual budget that does not maintain funding for the Common Agricultural Policy. The Committee of Member States' Permanent Representatives to the European Union, Coreper, at its meeting on 31 October, said that the revised Cypriot Presidency negotiating box for the 2014-2020 MFF goes too far, according to cohesion-friendly countries, or not far enough, according to net-contributors (Germany, the United Kingdom, the Netherlands, Sweden, Denmark and others). In addition, France, Ireland and Spain are unhappy about the gradual reductions in direct farm aid.
Against the backdrop of cuts in public spending in most countries of the European Union, France wants the contribution of countries to the European Union's budget to be both ambitious and responsible. It says that like the other budget headings, Cohesion Policy must help in the member states' efforts to restore sound public finances. The budget must be fairly allocated and deal fairly with regions of similar levels of wealth, says France, wanting the transition category and special conditions for the peripheral regions to continue in the budget. Cazeneuve added that France is convinced that savings can be made instead in other areas to bring the EU budget into line with the restrictions in public spending being operated by the member states. He said the way the EU's budget is financed must be overhauled and made fairer and more visible. France says it will not go along with the rebate system weighing disproportionately on member states like France.
Germany says the Cypriot Presidency's suggestions are a step in the right direction, but do not make enough reductions in the Commission's initial budget proposals. A source told this newsletter that Germany wants more than the €50 billion of cuts made in the Commission's draft and also wants everything that will help boost growth, jobs and innovation in the EU to be better reflected in the budget proposals. Germany has not yet taken a view on the suggestions for the Common Agricultural Policy (CAP) (gradually reducing aid to ensure better allocation of direct farm payments).
On Wednesday, British Prime Minister David Cameron said he was prepared to consider using his veto at the European Summit in November if he is unhappy with the draft compromise. He told the British parliament that the government would be taking the toughest line ever taken in the budget talks by any government since the UK joined the European Union, and would ideally like a reduction, but failing that for the budget to be frozen. He said he was fully prepared to use his veto rights if an agreement was not reached that was good for the United Kingdom.
Cohesion-friendly countries take up the challenge
Poland says the suggested cuts will affect cohesion more than agriculture, a Polish diplomatic source told this newsletter, adding that Poland could not be happy with the draft compromise. The country has been proactive in getting renewed talks off the ground and was prepared for cuts, but when it saw the Cypriot suggestions, it felt they were wholly unbalanced. Poland says the lop-sided cuts are not reflected equally across the headings and will hit Poland disproportionately, making a 32-35% cut in aid to Poland under the Cohesion Policy. Warsaw says the Cypriot draft compromise reduces the Commission's suggestions for Cohesion Policy by €12.5 billion, which is disproportionate, particularly given that Poland receives 20% of Cohesion Policy funding.
Spain says the Cypriot draft does not go in the right direction with its cuts in the CAP and the Cohesion Policy.
MEP Danuta Hübner (EPP, Poland) reacted strongly to the third series of cuts in the Cohesion Policy for going against the European Parliament's call for EU funding to remain at its current levels. Hübner, who is the chair of the Parliament's Regional Development Committee and former Regional Policy Commissioner, opposes the across-the-board budget cuts, saying that if they are not removed, they must be divided up equally, particularly when it comes to the Cohesion Policy, where the suggested cuts have already reached the outer limits of the acceptable. She added that the new cuts would threaten to undermine the structure of the Cohesion Policy, seriously affecting its key investment capabilities in this difficult period. She describes the nearly €3 billion cuts in European territorial cooperation are disproportionate and is unhappy that the cuts in the cap on Cohesion Policy funding and the safety net will have a negative impact on eight member states. She added that it was a basically a bad decision to suggest substantial cuts in the Cohesion Fund and called for the transition regions category to be retained in the future.
The regions are up in arms.
The Committee of the Regions (CoR) is joining forces with the European Parliament to defend Cohesion Policy and the Mechanism for Interconnection in Europe. In a press release, CoR president Ramón Valcárcel Siso says: “As stated by the EU democratic assemblies such as the European Parliament and the Committee of the Regions, a strong and reformed cohesion policy, together with a properly funded Connecting Europe Facility, are the engines of our plan for growth. We cannot weaken these tools widening the gap between demanding objectives and inadequate funding.” He sent a strong signal to the member states: “Regions and cities are working hard to implement the EUROPE 2020 Strategy and to improve citizens' opportunities, now member states must fully respect their commitment to that strategy and fulfil their duty of investing in smart, inclusive and sustainable growth, looking beyond immediate domestic political interests.”
The Council of Peripheral Maritime Regions (CPMR) regrets that many of the cuts are borne by the Cohesion Policy, but “the Cohesion Policy is the only investment and development policy that can ensure prosperity for Europe's citizens,” explained Eleni Marianou, the CPMR secretary general.
Farmers too.
On Wednesday 31 October, agricultural umbrella group COPA-COGECA rejected the Presidency's budget proposals, warning “they represent a significant cut in farm spending and risk threatening food security and rural development. This is totally unacceptable in view of rising food demand, higher production costs and substantial market volatility.” COPA-COGECA explains: “The Commission's proposals would already mean a cut in the CAP budget of 10% in real terms. Now the Cypriot Presidency is proposing further cuts and increased levels of flexibility between pillars. Agricultural spending, which is actually less than 1% of EU public expenditure, must at least be kept at current levels until 2020, to ensure farmers and their cooperatives have a viable future.” The organisation adds: “The Presidency also proposes that member states may transfer up to 15% of resources available for direct payments to farmers under the first pillar to the second pillar and that member states should not have to co-finance transferred funds. All second pillar expenditure should therefore be co-financed. The Presidency proposals are therefore totally unacceptable and I urge heads of state and governments to make sure they are revised.” (LC/transl.fl)