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Commissioner Grybauskaité: no future for direct payments

A major conference entitled “Reforming the Budget, Changing Europe” was held yesterday in Brussels, marking the end of the consultation phase of the ‘no taboos’ review of the future of the EU budget led by Budget Commissioner Dalia Grybauskaité. The former Lithuanian finance minister presented the results of the consultation process that received more than 300 responses including position papers from each of the twenty-seven member states along with NGOs, universities, regional and local governments, think tanks, lobby groups and businesses. It is clear that Grybauskaité is no friend of the Common Agricultural Policy, especially its €30 billion in direct payments.

Presenting an overview of the consultation responses Commissioner Grybauskaité identified the three top priorities: climate change, European competitiveness in a global economy and energy supply security. None of these currently figure greatly in the EU budget. The EU doesn’t even have a common energy policy. By contrast, the agriculture policy accounts for some €52 billion of the €130 billion annual EU budget, but according to the Commissioner, the responses were ‘unanimously negative’ in respect of the CAP.

Policy prescriptions for the CAP ranged from the modest – reform of existing instruments and focusing on new farm policy objectives – to the profound – major budget cuts for CAP including eliminating direct aids altogether or introducing co-financing to shifting current rural development policies into cohesion policy.

During her conference presentation, Grybauskaité referred directly to the potential of budget transparency (revealing the facts about who gets what) to strengthen the case for cutting the CAP budget. She said that transparency, and the work of investigative reporters and researchers in the farmsubsidy.org network gave a “very good message” to focus minds on the future of agriculture policy.

Separately, in an interview in the current edition of E-Sharp magazine, Commissioner Grybauskaité was quite blunt:

“Look at how inefficiently some of the money is used in agriculture. Seventy per cent of these resources go to ten or fifteen percent of the people working on the land, and mainly to large landowners or industries, not to agricultural people. In most cases the CAP is not even about agricultural policy.”

She is critical of the 2002 budget deal hatched by President Chirac and Chancellor Schroeder that preserves CAP spending through to 2013, “I am slightly allergic to the idea of planning ten years in the future due to my previous [Soviet era] experience. Policy stability is one thing, rigidity is another.”

However, she is aware of the political challenges of ridding farm subsidies from the EU budget. It will be a long haul perhaps not reaching its destination until 2021! By this time, she told E-Sharp,

“We could envisage the farm subsidies regime as it stands today being phased out. In Europe, it’s 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.”

But can Europe wait until 2021 before it prioritises action on climate change, energy policy, global competitiveness? And will Commissioner Grybauskaité be around to finish what she’s started? Apparently she is by far the most popular politician in her native Lithuania and it could be that the lure of domestic politics (as the next President?) might be too great, just as it was for her colleague Peter Mandelson. Grybauskaité is one of the most impressive members of the current Commission. Lithuania’s gain would be Europe’s loss.

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