Blog: Dave LeggettEU summit mess

Dave Leggett | 20 June 2005

How much of the latest EU summit debacle did you understand from the news reports? It all had a familiar ring to me: highly charged pre-meetings (Chirac and Schroeder, this time) to apply pressure, the politicians then all meeting up, all smiles and self-conscious embraces for the cameras, followed by polite bust-ups and post-meeting press conferences at which smiles are through gritted teeth. This time the sacred cows were the - linked - British budget rebate and the Common Agricultural Policy (CAP) - a subsidy paid to farmers. 

The CAP channels a great deal of EU funding to farmers, so member states with bigger agricultural sectors - like France - are bigger net beneficiaries. Britain's annual EU budget rebate (approximately five billion euros) reflects the fact that it has a relatively small agricultural sector. Mrs Thatcher negotiated the rebate deal some time ago and any British PM who presided over its demise would be savaged by the British press. Tony Blair knows that.

No doubt some compromise deal will end up being done – perhaps Britain keeps its rebate with some sort of ceiling and the CAP is tinkered with at the edges.

But one thing puzzled me. I can understand French President Jacques Chirac’s and the French attachment to the CAP for domestic political reasons. Blair can argue till he is blue in the face that it is time for the CAP and indeed, the whole EU budget to be reformed – or at least be on the table for discussion. But endangering the CAP plays very badly in France. It is a position that is perhaps not quite right, but it is at least understandable and like so many EU policy positions adopted by member states, simply predicated on national concerns (something that also applies to the inflexible British rebate position of course). And in any discussions about CAP reform, it is only right that the French position gets a good hearing, of course.

But what is going on with Schroeder backing the French so strongly in this budgetary row that has so much underlying it? Is he really representing Germany’s interests by doing so? I recently heard heads of Germany’s auto industry saying some pretty strong things about the need for a more competitive industrial framework in Europe. In both tone and substance it was very much in line with the so-called ‘Anglo-Saxon’ sort of agenda  - modernisation might be a better word - that the British (and some others who keep quieter about it) are pushing for. I’d like to know what German industrialists make of the budget row that has been going on and Schroeder’s apparently unstinting support for Chirac’s position.
But the main difference between current rows and past ones is that some politicians (most notably Tony Blair), emboldened perhaps by the voters’ rejection of the proposed EU constitution, are looking for a proper debate about what the EU’s role and purpose is. Britain, a bit of a loner in Europe anyway, is naturally well placed to champion such a review. But it seems reasonable to have the big discussion now or over the next year or so, especially now that the EU has been expanded to some 25-member states with others knocking on the door. 

Is there a continuing role of some sort for agricultural support? I would guess so, but the EU now faces different challenges than it faced at formation in 1957. Berlin should perhaps be applying a little gentle pressure on Paris to recognise that and maybe act as a Britain-France go-between, offering some reassurances to the French on agricultural support that at least keep the discussion and review going after the compromise deal on the EU budget for this year has been struck. That could well turn out an outcome that is better for Germany, better for France, better for Britain and better for Europe as a whole.


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