Sunday, June 17, 2007

Sarko's hard line could have a paradoxical end

The hard line being taken by France's new president, Nicolas Sarkozy, on the future of the CAP could have a paradoxical outcome: further re-nationalisation of the policy once seen as the cornerstone of the European Union.

Sarkozy has revived the notion of 'communiy preference', a term dating back to the 1950s which referred to favouring domestically produced goods over imports. The Commission's off the record reaction was 'That would be going back to the CAP of 20 years ago.'

The upcoming health check of the CAP will present some challenges for French policy. Farm Commissioner Mariann Fischer Boel wants aid to farmers to be fully decoupled from production, but France has been one of the most enthusiastic users of options for 'recoupling'. She is also thought to think that intervention purchasing should only be an emergency option.

In the longer run, Budget Commissioner Dalia Grybauskaite is said to favour a radical overhaul of the EU budget after 2013 with a major shift in spending away from farm support towards growth and competitiveness-related spending.

France will become a net contributor to the CAP after 2013. French centre-right MEP Alain Lamassoure, who has been advising Sarkozy on EU affairs, has published proposals which would see greater co-financing of support by national governments. This is not favoured in the Commission as a potential distortion of competition which would undermine the common character of the CAP.

Yet if the EU decides on cuts that are too radical for Sarkozy, or at any rate for domestic French opinion, the solution could be to pay subsidies to French farmers from national funds. Thus, the final outcome could be even more re-nationalisation of the CAP than that which arose from the compromises of the 2003 reform.

I shall be presenting a paper on the CAP in Paris on Thursday and it will be interesting to see what the state of French opinion is.

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