EU budget talks collapse puts CAP timetable under pressure

TALKS on a new EU budget settlement ended in failure in Brussels on Friday, putting renewed pressure on the timetable for agreeing Common Agriculture Policy (CAP) reform.

Talks on setting the 2014-2020 EU budget are expected to resume early next year.

But Friday’s breakdown of talks makes the timetable for agreeing CAP reform by the unofficial deadline of June 30, 2013, the end of the Irish presidency of the EU, even tighter.

All parties involved in the reform process accept that a deal will not be possible without agreement on the overall EU budget and the spending limits for the next CAP regime.

A statement from MEPs on the EU Agriculture Committee on how the negotiations will progress from here is expected on Monday, according to the UK farming unions’ office in Brussels.

A vote by the European Parliament on the reform package had already been delayed from November until January 23 and 24 as a result of delays in agreeing the EU budget and the time taken to incorporate more than 7,000 amendments suggested by MEPs into the proposals.

Plans by EU Agriculture Ministers to reach agreement on elements of the reform at a meeting in Brussels next week have also been put back as many of the relevant texts are not ready.

Scottish Liberal Democrat MEP George Lyon, who sits on the Parliament’s Agriculture Committee, warned earlier this week that a ‘no deal’ could derail the CAP reform timetable.,

Mr Lyon said the EU budget would realistically need to be agreed by ‘not much beyond early February’ to give the various EU institutions involved in the process time to reach agreement by June 30.

If it goes beyond that and into the Lithuanian presidency of the EU, with German elections looming, the timetable becomes ‘much more complicated’, he said.

It was clear even before the summit got underway on Thursday that it was going to be a huge task for EU leaders to reach a deal.

European Council president Herman Van Rompuy issued an updated negotiating paper on Friday morning that retained his original proposal for total a spending ceiling of 973bn euros but amended details of cuts in specific areas, including reduced cuts for the CAP budget.

The revised document went nowhere near far enough for member states demanding cuts to the EU budget, mainly the net contributors, led by the UK.

The majority of member states, primarily the net beneficiaries from EU, wanted to see EU spending rise and are backing the European Commission’s original proposal for 4.8 per cent budget increase over the 2014-2020 period.

Prime Minister David Cameron was seen the most likely of the EU leaders to scupper the deal as he was defending not only the UK’s entrenched position on the overall budget but also the UK rebate, worth 3bn euros year, which was under pressure.

But speaking after the talks collapsed on Friday afternoon, Mr Cameron said Britain was ‘not some sort of lone actor’ in opposing the deal and stressed that other member states that were also net contributors shared the UK’s stance.

He said Mr Van Rompuy’s revised deal was ‘not good enough’ and amounted to little more than ‘tinkering’ with spending.

“Together, we had a very clear message - ‘We are not going to be tough on budgets at home just to come here and sign up to big increases in European spending’,” Mr Cameron said.

He said he still believed a deal is ‘absolutely do-able’ when talks resume and claimed that freezing the EU budget was ‘not an extreme position’.

German Chancellor Angela Merkel and Mr Hollande were quoted on Friday morning as saying they had doubts about whether it will be possible to reach agreement at the Brussels summit.

Before the talks collapsed France appeared to have won a minor victory in its drive to protect the CAP budget.

Mr Van Rompuy’s revised figure of 278bn euros for CAP direct payments reined in his initial proposal to cut this budget by 7.7bn euros. While this still equated to cuts of more than 5bn euros to the direct payment budget on top of those originally proposed by the European Commission, it represented a notable concession.

It appeared to have been made largely in a bid to appease French president Francois Hollande, who had set out his stall to defend the CAP budget.

Newspaper reports on Friday suggested some member states, led by France, Italy and Ireland, were pushing for a further 6bn euros to be reinstated into the CAP budget.

EU farming umbrella body Copa-Cogeca secretary-general Pekka Pesonen said he was ‘disappointed’ at the lack of the agreement on the future CAP budget.

“EU Agriculture Ministers and the European Parliament will not be able to decide on which measures to introduce until they know what money and budget they will have available to them to fund the future CAP. We urge heads of state and government to make a rapid and positive decision on the European budget for the period 2014-2020,” he said.

“Farmers are currently delaying production and investment decisions because of uncertainty about the future CAP and if this continues it will have disastrous impact on employment in related sectors as well as market stability.” 

If there is no EU budget agreement before the end of 2013, the 2013 budget levels will be extended to 2014, plus a 2 per cent inflation adjustment.

But the Commission warns that the absence of an agreed financial framework would ‘considerably complicate the adoption of new programmes’, which include the new CAP.

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