Sunday, September 17, 2006

Battle of Europe over rural development money.

This is a fogblog - strictly for those who understand the difference between voluntary modulation and compulsory modulation. It is crucially important to those who are affected as well as being very difficult to follow. My aim is to clear the fog so others can understand what is going on when the row breaks out.
Last week I met the deputy Chef de Cabinet of Commissioner Mariann Fischer Boel's Cabinet, Klaus-Dieter Borchardt and three other members of the Cabinet in the Berlaymont in Brussels. Mr Borchart turned up mob-handed. He meant busines and he wanted me to know it. We talked about a few other issues but the key message was stark and emphatic. "There will be no discretion for member states to introduce 'voluntary' modulation within the Common Agricultural Policy to pay for member states next Rural Development Plans due to start on 1st Jan. '07." They will all have to make do with the EU agreed level of 5% 'compulsory' modulation. This completely derails the rural strategies of the Assembly and Westminster Governments - to such an extent that it is unacceptable. There is going to be a 'Battle of Europe'. There is also an added problem of the Parliament taking umbrage at not being properly consulted - and being intent on making its point by delaying matters.
The root of this problem is the pathetically small share of the rural development budget allocated to the UK in the recent EU budget agreement for 2007-2013 chaired by Tony Blair during the British Presidency - around 3% rather that the 10% it would be on a per capita calculation. The allocation is historically based - on what Mrs Thatcher claimed from the EU for rural development almost 20 years ago. In addition, the rural development budget for every nation state will be increased by 'compulsory' modulation (or top-slicing of other direct payments made to farmers) across the EU at the agreed EU rate of 5%. This is nothing like sufficient to fund the rural development plans of the UK Governments - and England in particular. In fact, the EU budget agreement allowed for 'voluntary' modulation at up to a rate of 20% which is probably about the level England needs. The EU position is simply not acceptable and there is going to be a real fight over this.
What is rather odd is that the EU Council of Ministers has agreed the principle of voluntary modulation already. It seems that Commissioner Fischer Boel does not accept the position or she has changed her mind. There was definitely a sense of 'Up Yours Brittania' about the tone coming out of the Commissioner's Cabinet. When I pointed out that this was a serious problem for UK Governments, the response was, in effect "tough". It seems that every other member state had asked for a bigger rural development pot during the budget discussions and had been given what were quaintly called 'presents'. But the UK delegation, led by the Prime Minister had not said a dickie-bird when it mattered.
In my opinion the Commissioner is going to have to give way on this. The stakes are too high. But there is no way in which the Rural Development Plans can be agreed in time for a Jan 1st start. I suspect that even the budget available will not be decided until sometime next year.
I hope that some of the fog has lifted - but I am not hopeful.

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