Tag: European Recovery Instrument

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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

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The CAP in the 2021 budget negotiations

The Council Presidency, European Parliament negotiators and the Commission have had several trilateral meetings during August and September to try to reach agreement on the seven-year Multi-annual Financial Framework (MFF) following the European Council conclusions in July. The aim is to reach agreement by the end of October, but according to the Parliament’s negotiators, these discussions are not going well. The Parliament is pointing to the safety net procedure in the Treaty which, in the event of no agreement, provides for a contingency plan which would allow sectoral programmes to start functioning on 1 January 2021 on the basis of the 2020 amounts.

In parallel, the procedure is under way for approval of the EU’s 2021 annual budget which is the first year of the new MFF. This process is greatly complicated by the absence of an over-arching agreement on the new MFF. However, it is important because it will determine, inter alia, the funding available for CAP direct payments in 2020 and rural development spending in 2021.… Read the rest

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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