FOLLOWING THE EUROPEAN UNION

Poland, the biggest of the poor east European newcomers that stand to lose most from a budget delay, announced an initiative to try to salvage a deal, saying it would use a meeting with the French, German and British foreign ministers on June 27 to press for an early deal.

Key points• Blair tries to appease annoyed Euro states• UK blamed for causing problems at EU Summit by new EU members• But plans for UK's budget payments will meet criticism from opposition at home

[..] Story in full BRITAIN should pay more towards the European Union's budget, Tony Blair said yesterday, trying to soothe eastern European states who blame him for capsizing last week's EU summit.

New EU members have turned on the Prime Minister, accusing him of vetoing a budget deal and costing them millions in European aid.

[..] British officials fear that the anger of the "new" Europeans could undermine the UK presidency of the EU which begins next month, so Mr Blair yesterday risked Tory attacks by telling the House of Commons that he would like to reform the budget to take more money from countries such as Britain.

[..] The new EU countries have often supported Britain in Europe. Winning back their confidence will be a key aim of the British presidency, Mr Blair said. "We've got to be explaining to them that our opposition to the deal is not opposition to enlargement."

Berlusconi rubs salt in Finnish wound at food body

PARMA, Italy (Reuters) - Italian Prime Minister Silvio Berlusconi repeated one of his most famous diplomatic gaffes on Tuesday by insulting the cuisine of Finland which Italy beat to host the new European Food Safety Authority.

"I've been to Finland and I had to endure the Finnish diet so I am in a position to make a comparison," Berlusconi told local dignitaries ahead of the inauguration of the EFSA in the northern Italian town of Parma.

The 68-year-old media tycoon also said he had used his masculine charm to persuade Finland's president, Tarja Halonen, to give up her country's claim to host the European Union agency.

"I had to use all my playboy tactics, even if they have not been used for some time," said Berlusconi.

At the opening ceremony later in the day, European Commission President Jose Manuel Barroso would have the chance to sample Parma's famous smoked ham, Berlusconi said, and see for himself that it was better than traditional Finnish food.

"Barroso today will be able to taste our 'culatello' as opposed to smoked herrings from Finland," he said to laughter from the audience.

Italy fought hard to host the EU agency and Berlusconi reportedly told a summit of European leaders in December 2001: "Parma is synonymous with good cuisine. The Finns don't even know what prosciutto is."

The line has become one of the most memorable of Berlusconi's long list of indiscretions.

[..] During a photograph with other EU leaders in Spain in February 2002, Berlusconi raised two fingers behind the head of the then Spanish Foreign Minister Josep Pique, in the traditional Latin gesture for a cuckold.

I've stumbled over the moral high ground once. I've tried getting on it ever since, but I keep slipping off.

The famines in Europe were the direct result of wars started by Europeans and between them. They were not at all the result of any external (to Europe) action or threat. This is a rather specious rationalization.

Moreover these are the same arguments offered everywhere to justify protectionist economic and trade policies, whether involving agriculture, minerals, or manufactured products.

Thomas - not quite accurate: the defenders of the CAP do defend themselves on principle, this being not the irrational "20th century European famines could come back" argument proposed by Walter, but rather a self-defense argument against similarly massive subsidies by the US (sugar, rice, corn) Australia (fruit) and other trading blocs.

As Bob Geldof never ceases to point out, every cow in the European Union receives more money than the daily income of the average African.
http://www.globalpolicy.org/socecon/hunger/economy/2005/0620farmsubsidies.htm

The EU's Agricultural Dilemma

While German farmers protest against dumping prices for their products during their current annual meeting, others call for a reduction of EU agricultural subsidies that make up the largest part of the bloc's budget.

Brussels currently spends more than 45 billion euros ($54.1 billion) on agriculture with the biggest chunk reserved for subsidies that go to the union's 11 million farmers.

"The EU spends two euros a day per cow," Britain's new minister for European affairs, Douglas Alexander, recently summed up the situation.

These subsidies were one of the main reasons why negotiations over the EU budget failed at the June 16 -17 summit, plunging the 25-nation body into its worst crisis so far.

France especially opposed a reduction as Britain was unwilling to give up a decade-old rebate is receives as the country does not profit as much from the agricultural subsidies as other states. It means that the union will continue to spend 10 times more money on agriculture than it does on education and research.

Two billion for olive oil

The list of the EU's support for agriculture includes financial help for investments, funds for young farmers and payments to farmers who go into early retirement. The bloc subsidizes new farms in areas where few exist and supports efforts to improve the processing and marketing of agricultural products.

One important segment is the funding of specific products. A German farmer receives money for exporting eggs while a Spanish winegrower gets EU euros for his work. Grain subsidies make up the biggest portion with 11 billion euros while two billion euros are spent on aiding the production of olive oil.

In 2003, the distribution of aid changed profoundly as EU leaders did away with a system that remunerated farmers according to the amount they produced.

"This was meant to get farmers to adjust their production levels to market demands," said Monika Hartmann of the Institute for Agricultural Policies in Bonn.

Now, special requirements can be attached to payments.

"Cross-compliance makes it possible to check that farmers adhere to fertilization and labeling rules," said Udo Hemmerling, an expert on economic policies at the German Farmers' Association.

Some checks are in place

Farmers meanwhile are not in direct contact with Brussels at any time. Subsidies are distributed by local governments -- in Germany, that responsibility lies with the 16 states.

All member states also have control systems in place to prevent abuse. According to Hemmerling, agencies check 5 percent of farms each year. He added that as a result of the checks, reclaims can amount to hundreds of millions of euros in some member states.

A global problem

The reason why only few politicians are willing to criticize the subsidies has to do with national interests. While France heads the lists of subsidy backers, Germany's agriculture also could not survive without the help. In bad years, German farmers barely manage to make enough money to cover their costs -- a problem that's largely caused by price dumping in recent years.

International comparisons show that few countries can manage without agricultural subsidies. Switzerland, Japan and the US all protect their own farmers, making it even harder to scale back subsidies.

That's why researchers and farmer representatives see a multilateral approach as the only way to change things in the long run.
Daniel Wortmann (win)

Juncker plays the blame game as Blair prepares for EU presidency

By Stephen Castle in Brussels and John Lichfield in Paris
23 June 2005


Tony Blair is being portrayed as the architect of Europe's latest political crisis as he prepares to launch a British EU presidency which is in deep trouble even before it starts.

Ahead of his appearance in the European Parliament this morning, Mr Blair came under direct attack from the French President, Jacques Chirac, and from Jean-Claude Juncker, the Prime Minister of Luxembourg, who chaired last week's acrimonious Brussels summit.

Meanwhile, Jose Manuel Barroso, the European Commission president, called for a public debate on Turkey's ambitions to join the EU - one of the priorities for the British presidency which starts on 1 July.

Brussels is still in shock after last week's bitter summit clash in which a small group of countries, led by Britain, blocked a deal over the EU budget for 2007-13.

Yesterday Mr Juncker received two ovations from MEPs as he gave a blow-by-blow account of how Britain refused to surrender part of its annual budget rebate. Mr Juncker suggested that his plans to reform the rebate were deliberately misrepresented by a British premier determined not to compromise.

The main proposal rejected by the UK would have exempted the costs of spending in the new EU countries - apart from agriculture - from the scope of the rebate. That would have made it worth €5.5bn (£3.7bn) annually - considerably more than now.

"It is not true to say that the [Luxembourg] presidency wanted to kill the British rebate," said Mr Juncker, "we wanted to maintain it in the context of the 15 [countries which made up the EU before it enlarged last year]. We wanted this rebate to show greater solidarity to the new member states. It was wrong to reject this."

Mr Juncker said pointedly that he was explaining to MEPs, "because no one else will and because you're likely to hear other explanations in the near future" - a direct reference to Mr Blair's speech today.

And the Luxembourg premier referred to an offer by former Communist countries to sacrifice some of their subsidies in the interests of a deal. These countries, he said "were giving us a lesson in ambition. I think this is a good reason for those not able to speak the same language to be ashamed of what they did."

Speaking at the weekly cabinet meeting in Paris, M. Chirac argued that almost all governments, including France, had "done everything possible" to agree on an EU budget framework up to 2013. "Unfortunately this was not possible, because of British intransigence," he said.

M. Chirac once again rejected the UK argument that the Common Agricultural Policy must be radically reformed before the British EU rebate can be abolished or reduced. The CAP had been extensively reformed only three years ago, M. Chirac said.

After a meeting of the EU Commission, Mr Barroso questioned the policy of negotiating Turkey's EU entry. "We should discuss the signal that was sent by the electorate regarding Turkey," he said, though he added that plans to start talks on 3 October should continue.

The investigative newspaper Le Canard Enchainéreported that M. Chirac had come back from Brussels describing Mr Blair as "like Thatcher only worse - as arrogant as she was but even more selfish".

Diplomatic sources in Paris suggest, however, that M. Chirac was content with the summit. The row had distracted attention from the French "no" to the constitution and disrupted Mr Blair's hopes of introducing a British path to EU reform in the next six months.