Concern EU will raid farm budget to fund massive European economy reboot after Covid-19
The European Parliament still has concerns that funds for the common agricultural policy, the CAP, will be raided over the next seven years as part of the massive rebooting of the European economy after the Covid-19 crisis , the parliament’s vice chair Mairead McGuinness has said.
EU leaders agreed last week at an emergency summit for the European Commission to map out ways of using a €1 trillion-plus package to help teetering businesses across Europe.
In a move to placate deep differences between member states on ways of funding a rescue package, leaders fell short of endorsing burden-sharing through issuing corona bonds to fund the costs that have crippled Italy, in particular, and have left even small economies like Ireland’s facing enormous costs as unemployment soars to over 25% this summer.
The divisions have pitted the so-called frugal northern European states such as Austria and the Netherlands against many other states, led by Italy and France, and including Ireland.
On Friday, continental European stock indices ended lower on fears the EU will in the end come up short in committing a big enough rescue package for a European economy that was already faltering before the onset of the deadly Covid-19 disease.
Ms McGuinness said that the mechanism agreed in using the still-to-be agreed EU’s next seven-year budget for 2021 to 2027 nonetheless marked a step in healing the differences over coronabonds.
The Commission will now have “to come up with something imaginative” in terms of details in the coming weeks, she told the .
She also thought that it significant Germany takes over the presidency of the EU this summer and that Angela Merkel will be seeking to steer Europe into funding the huge costs entailed by the crisis across the continent.
However, Ms McGuinness said there were already concerns well before the Covid-19 crisis that programmes such as the CAP would not be properly funded under the next budget and the crisis has only heightened those concerns.
“From an Irish point of view, there were already concerns about the budget from 2021 to 2027 because there is a division among the member states," she said.
"And there is a fear that instead of increasing the contributions -- and this is before the Covid-19 crisis -- there was a mood of retrenchment among the more frugal member states," Ms McGuinness added.
In light of Covid-19, we would need to be very conscious that the budget funds are not used for the recovery because the Irish foods and agriculture and supply chain will also need support now and when this crisis ends to deal with the closure of the food services industry.
She detected a feeling among the Council of Ministers that “an unprecedented” package is needed to restart the economy but "the bazooka" will be needed for Ireland and the rest of Europe for SMEs.
