Tag: EAFRD

Posted on

The CAP Transitional Regulation and Next Generation EU funds

The European Parliament approved last Tuesday evening the common position on the CAP Transitional Regulation previously agreed with the Council. Once the Council gives its formal approval, it will take effect from 1 January 2021. The Regulation provides legal certainty regarding the rules for payments to farmers by continuing the application of the rules of the current CAP framework in the two calendar years 2021 and 2022 under the ‘old rules, new money’ principle.

The Regulation makes necessary amendments to the four CAP Regulations that make up the 2013 CAP reform (direct payments, rural development, single common market organisation, and horizontal matters). It also governs the spending of the EAFRD element of the European Union Recovery Instrument (EURI) during the two-year period 2021-2022. In this post, we focus on the rules introduced to govern EURI expenditure.

Although the Transitional Regulation broadly continues existing rules, there are some novel features that are worth noting.… Read the rest

Posted on

When the CAP budget pendulum finally stopped swinging

In the early hours of Tuesday 21 July 2020, around 5.30 am, after four days and nights of negotiations, European Council leaders reached agreement on both the Next Generation EU recovery instrument and the Multi-annual Financial Framework (MFF) for the period 2021-2027. Reaching unanimous agreement among 27 leaders who entered the negotiations with widely different positions was an astounding political achievement. And although the inevitable compromises were accompanied by expressions of regret, it is extraordinary that every leader has expressed satisfaction with the final outcome.

There are many aspects of the European Council conclusions that warrant analysis: the agreement that the EU for the first time can issue debt to fund a stimulus package to address the catastrophic economic fall-out from the coronavirus pandemic; the future links between EU financial transfers to countries and the rule of law; the framework set out for additional own resources in the coming years; the continued relevance of budget rebates: and the extent to which the final outcome succeeded in ‘modernising’ the budget to reflect the EU’s new priorities.… Read the rest

Posted on

Commission proposes increased agricultural spending in reinforced MFF

My previous post discussed the rationale for the Commission’s revised MFF proposal put forward on 27 May 2020 which includes a proposal for a European Recovery Instrument (ERI) to finance front-loaded expenditure in the next MFF plus a slightly revised ‘standard’ MFF (which the Commission refers to as a ‘reinforced’ MFF). In broad terms, the reinforced MFF allows for commitment appropriations amounting to €1,100 billion over the 2021-2027 period, while the ERI would help to finance a further €750 billion of spending in the 2021-2024 period, in constant 2018 prices.  Together, they add up to a total proposed spending of €1,850 billion over the MFF period.  

The following table tracks the debate on the overall size of the MFF since the Commission’s initial proposal in May 2018. It also describes the allocation for the CAP budget in the various proposals. The farm unions and their supporters have paid particular attention to comparing the latest Commission proposal with commitment appropriations under the current MFF.… Read the rest

Posted on

Commission proposes European Recovery Fund as part of revised 2021-2017 MFF

The stakes for the European Union have never been higher. In a year when the latest Commission economic forecasts project a 8% decline in GDP as a result of the measures taken to contain the spread of the coronavirus, the question is whether the European Union can provide a response that is macroeconomically significant and builds on the principles of solidarity inherent in the concept of a common citizenship. If it fails to deliver, we can say good-bye to the European Union and prepare to take our chances in an unforgiving geo-political world where the only other leaders are an increasingly authoritarian and self-centred China and an increasingly unpredictable and self-centred America.

The Commission has done its homework. Building on a Franco-German initiative the previous week, it put forward on 27 May 2020 a proposal for a recovery plan instrument and a reinforced Multi-annual Financial Framework (MFF) that is innovative, ambitious, and worthy of support.… Read the rest

Posted on

Macroeconomic conditionality and rural development funding

The European Commission has proposed to extend the principle of macroeconomic conditionality which currently exists for the Cohesion Fund to all the ‘CSF’ funds in the next MFF period. The CSF funds are those covered by the Common Strategic Framework and include the EAFRD rural development fund as well as the regional, social, cohesion and fisheries funds. The basic idea is that commitments agreed for a member state under its Partnership Contract could be suspended if a member state is not compliant with its macroeconomic guidelines. As the Commission explains:

The draft Regulation seeks to establish a much closer linkage between EU cohesion policy and economic governance, on the grounds that sound economic policies are essential to ensure that CSF Funds are spent effectively. So, for example, the Commission may ask a Member State to amend its Partnership Contract to bring it into line with recommendations issued within the framework of the EU’s broad economic or employment guidelines or excessive deficit procedure, and may suspend CSF payments if a Member State fails to do so.

… Read the rest