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European Integration

What old-style CAP defenders claim

The CAP is a pillar of European integration. In no other field have so many competencies been transferred to the European level. The CAP is also a prerequisite for having a common market in agricultural products since national subsidies would distort competition. Scaling back the CAP would weaken the EU.

The CAP harms the internal market

Free trade of agricultural products within the EU does not depend on the CAP. A common market also exists for all other goods – including sensitive categories, such as steel and textiles. This works perfectly well just with EU control of national subsidies but without centralized EU-level subsidies. Indeed, the CAP treats different farmers, agricultural products, and member states very unevenly. This is likely to distort competition on the internal market more than a system relying mostly on national subsidies would.

The CAP endangers the EU budget

The CAP is also not needed to maintain the size of the EU budget (which one might take as a benchmark of European integration). Many other spending areas vie for the money, and they are more legitimate in the eyes of the public. The next long-term EU budget will be under pressure as the economic crisis has worsened public deficits and debts. If EU money is spent more wisely than on the CAP, the EU budget has better chances to get away unscathed.

The CAP tarnishes the EU’s reputation

Reforming and scaling back the CAP will thus bring no harm neither to the internal market nor to the European budget. Instead, important benefits for European integration can be expected. To start with, the CAP stands for the bureaucracy, intransparency, and mismanagement that tarnishes citizens’ perception of the EU. Progress towards simplification and accountability has been made – cucumbers are again allowed to be curved and the identity of subsidy recipients has finally been divulged. Yet, as long as the core of the CAP is not fundamentally overhauled, it will always be grist for the mills of those who discredit the EU as a undemocratic project run by technocrats and special interest groups.

The CAP absorbs the EU’s budget

The CAP absorbs more than 40% of the EU budget, depriving the EU of the renewed momentum it could gain if it became more relevant for attaining the priorities of the future. Citizens are ready to support an EU that creates real value added – by tackling climate change, promoting European infrastructure, or enhancing internal and external security. They are never going to endorse an EU that lavishes money on one politically powerful sector to the detriment of the entire economy.

The CAP damages policy quality in the EU

The CAP is at the core of the unworthy haggling over subsidies that damages policy quality. The CAP redistributes wealth without sound criteria that would direct the money to poor individuals, regions, or member states. As a result, every member state tries to grab the biggest share possible from the pie or to get some extra money in other policy fields as compensation for obtaining relatively few agricultural payments. What policy would serve the European interest best matters little when governments ellbow over the distribution of subsidies.

The CAP undermines financial solidarity in the EU

The CAP undermines European financial solidarity. Several member states that receive less money from the CAP than they contribute have secured exceptions when it comes to paying for the EU budget. The most well-known exception is the ‘UK rebate’ – but Austria, Germany, the Netherlands, and Sweden have also obtained preferential treatment. Limiting the CAP to the provision of European public goods that benefit all member states would be decisive for overcoming this focus on net budget contributions and to reestablish a financing mechanism for the EU budget with no (or fewer and more systematic) exceptions.

The CAP obstructs EU empowerment

The financial, economic and fiscal crisis has created, or revealed, the need to transfer new competencies to Brussels, with tighter oversight extending from private banks to public budgets. In agriculture, by contrast, centralisation as a means of safeguarding competition has been rendered less necessary by the shift from market intervention and production subsidies to direct income support and targeted payments for public goods; moreover, the need to respond to local demands argues for more decentralised decision-making. If the EU devolves powers in agriculture, it can credibly demonstrate that European integration is not a one-way road but, rather, a flexible process that adapts co-operation to changing needs.

Conclusions

Because of its tremendous size, the CAP is not simply an abortive sectoral policy but a burden on European integration. It creates an image of a bureaucratic, intransparent, and ill-managed EU. It wastes resources that could, if employed more wisely, convince European citizens of the benefits of integration. And it nurtures a culture of national egoism that stymies rational, efficiency-oriented decision-making on EU expenditures and budget financing.

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