In preparing the financial perspectives for the period 2028-2034, the European Commission is indulging in its favourite exercise: on the one hand, creating margins without any new financial margin, and on the other, trying to force the hand of the Member States on the financing of the European budget while retaining its role as principal.
Traditionally, the Commission primarily sounded out the capitals on acceptable cuts to the budgets of the main European policies and the acceptability of a slightly increased total European budget. In this first-round exercise, the CAP was put forward as a target (proposed to be cut by up to 30% in 2018 for instance).
In the current context of budgetary frugality, the Commission is trying a different route, ultimately drawing on the proposal for (administrative) reform of the CAP that it made in 2018.
It proposes grouping the 530 European programmes (representing a total budget of more than 12 trillion euros) into a single large European fund, called Pillar I. Alongside this pillar, two others would exist: one aimed at the financing of the services (thus allowing negotiations on the Commission’s operating budget to be decoupled a little more from discussions on the funding of European policies) and a third relating to enlargement and major investments of collective European interest, including defence (a pillar for which money has yet to be found).
Pillar I would therefore bring together all the major European policies. The Member States would be asked to draw up national strategic plans, setting out their priorities and their wishes as regards the mobilisation of the money allocated to them under the various policies.
The creation of such a fund undoubtedly implies a certain degree of fungibility of budgets previously allocated to one policy or another. We can assume that both the CAP and cohesion policy – whose budgets are always a source of envy in the absence of other truly common policies – would no longer see their funding protected over the programming period. Funding would be set at the beginning of the period according to national priorities and would no doubt be adjusted along the way, particularly if disbursements turned out to be lower than expected.
Under this scheme, transfers of funding to the Member States for the various policies would be conditional on respect for the rule of law and the implementation of priority measures defined at European level. The Member States would then be able to activate the measures provided for in the various policies, which would act as toolboxes that the Member States could activate or not.
In the case of the CAP, the Commission illustrates its point with two examples that raise questions about the detailed knowledge of agricultural issues on the part of a side of the European Commission. As a condition of Member States’ access to CAP money, it imagines “promoting organic farming”. An original example, when it is clear that the objective put forward by the Farm to Fork of 25% of land in organic farming corresponds neither to the expectations of the markets, nor to the imperatives of food sovereignty, nor to those of sustainability in Europe. As for the CAP’s ‘investment’ chapter, the Commission takes the example of direct payments. While these payments are certainly vital for farmers’ incomes at the moment, is this the most relevant example when we are aiming for investments to resolutely win the dual performance challenge: getting European agriculture back on the road to profitability while pursuing the path of greater sustainability? Not to mention the arrival of Ukraine.
This suggestion to overhaul the European budget and the way it operates raises a number of questions that the European Parliament raised when it considered the Commission’s 2018 CAP proposal, before reformatting it to give it a minimum common meaning.
This scheme would leave it up to the Member States to implement the bulk of European policies in accordance with their national priorities at the time, with the exception of a few ‘gateway’ measures to funding, a condition which the European Council (which must act unanimously on financial matters) would no doubt seriously water down.
As with the 2018 CAP proposal, we are now in a situation where all European policies under Pillar I are to be renationalised across the board. At the end of the day, Europe will only remain common to Pillar III (enlargement, major European investment plans).
So what of the single market?
What would be the economic efficiency of such a renationalised system, with the temptation for some to concentrate funding on a few sectors in order to subsidise them more so that they can gain an advantage over their European competitors? The money used in this way would not lead to European growth, but to more fractures and, in the end, a waste of the taxes paid by Europeans.
This idea of a large common pot is no doubt also related to the Commission President’s leitmotiv over the last few weeks (at least with regard to the CAP) of having a more targeted budget and more targeted measures. If the aim is to have more effective measures, everyone can agree. But if it’s a rhetorical device to get people to accept a lower budget by explaining that, despite everything, everything will be fine with more targeting, then doubts are permitted. At this stage, doubts exist about the European executive’s intentions with regard to agriculture and its funding.
Just one figure: if the CAP budget for the period 2028-2034 were to be maintained in current euros, this would mean that Europe is opting for a CAP whose economic value in 2034 (if inflation becomes low again) will be only 46% of the 2020 figure. Faced with the challenges of sovereignty, the loss of competitiveness over the last 2 decades, and enlargement to include Ukraine…
O artigo foi publicado originalmente em Farm Europe.