CAP Budget Cuts

    EU Council Supports CAP Budget Cuts

    The major hold up for the CAP reform is agreement on the budget (known as the Multi-Annual Financial Framework). It is further complicated by different views between MEPs and the Council (representatives of the governments of the member states) and difference in power between them.

    The Council want the budget to be reduced while MEPs want the budget to be maintained at current levels or even increased.  Ultimately, Council and not the MEPs have the final say but the MEPs can be difficult and use levers such as the CAP reform to gain influence.
    Following a “watershed meeting” Cypriot Ambassador Andreas Mavroyiannis (Cyprus holds the Presidency of the Council of Ministers for the rest of 2012) stated that an agreement on the EU budget deal for 2014–2020 would happen this year.  This objective was strengthened by the separate announcement by the European Council President, Herman Van Rompuy, to set a date for an Extraordinary European Summit (for Heads of State) in November.
    Informal Council meetings, held once during a Presidency’s six-month period, enable member states to give their positions ‘without prejudice’ to their formal negotiating stances in the official discussions in Councils.  At the last official General Affairs Council on 24 July, member states voted through a €5.23bn cut in the Commission’s proposed 2013 budget.  The UK, Netherlands and Sweden voted against, saying that this left a 2.7% increase, which was still too much.  While the 2013 budget negotiation differs significantly from the 2014–2020 MFF negotiation, it gives an indication of the mood around which the MFF budget cuts will be discussed.
    Focusing specifically on the CAP, the paper says that there are “sharply opposite preferences of the member states” on whether there should be cuts at all and, if so, whether priority should be on Pillar 1 or Pillar 2 although the Presidency argues for flexibility between the two. 
    The real decision-makers will be the Heads of State and to this end, the November meeting arranged by van Rompuy will be critical if a deal in December is going to be achieved.  Odds remain in favour of a later settlement in 2013 (and thus CAP reform in 2015) rather than 2012 but have narrowed.
    The current MEP proposal is for an annualised cost of €38.3bn and De Castro representing MEPs wants it increased to €42.1bn to keep it constant in real terms, an increase of €3.8bn.  He justifies this increase on the grounds that Croatia will be joining the EU in July 2013 and extra funds will be needed for this accession.

     
     

    Key contacts

    Andrew Wraith

    Andrew Wraith

    Director
    Food & Farming

    Savills Lincoln

    +44 (0) 1522 508 973

    +44 (0) 1522 508 973

     

    Steve Hollis

    Steve Hollis

    Director
    Food & Farming

    Savills Salisbury

    +44 (0) 1722 426 853

    +44 (0) 1722 426 853

     

    Keith Preston

    Keith Preston

    Director
    Food & Farming

    Savills Oxford

    +44 (0) 1865 269 170

    +44 (0) 1865 269 170

     

    Ashley Lilley

    Ashley Lilley

    Director
    Food & Farming

    Savills Cheltenham

    +44 (0) 1242 548 012

    +44 (0) 1242 548 012

     

    Giles Hanglin

    Giles Hanglin

    Director
    Rural Research

    Savills Margaret Street

    +44 (0) 207 016 3786

    +44 (0) 207 016 3786