Farmers in small, poorer European countries have become highly dependent on European agricultural aid. Farmers in countries like Bulgaria, which joined the EU in 2008, have been able to thrive off higher sales of wheat, barley, corn and sunflowers. But now as the United Kingdom’s exit leaves a hole in the European Budget, it appears that some of these farmers will become fighters in the European political debate.
This reduction in funds will test the EU’s ability to address the needs of farmers and will pose a fresh challenge to European political cohesion as deliberations begin over the bloc’s 2021-2027 spending program. Relations have been frayed in recent years by the Greece-triggered debt crisis, the largest flood of refugees since World War II, the U.K.’s vote to leave the bloc and democratic backsliding in eastern Europe.
National transfer filings account for about 80 per cent of the EU’s accounts and the UK is the second largest contributor behind Germany. The UK’s decision to leave the EU will leave a 10 billion euro hole and the EU now finds itself in a delicate situation. How does it pursue a united defence policy, maintain tighter borders, address concerns about Islamic terrorism and Russian aggression, assist its farmers and provide regional aid with a significantly reduced balance of payments? The result is that a food fight is about to break out in the EU.
This is because farm subsidies and regional aid accounts for about 70 per cent of the bloc’s outlays and yet the EU is set to introduce a 6 per cent cut in these two programs.
However, the multi-annual EU budget needs the unanimous support of national leaders and these countries are split on the best way to move ahead with these programs. France for example is set on retaining the farm subsidies whilst Austria and Sweden are allied in ruling out higher national contributions.
The division between all these countries on what to do with the subsidies is likely to have a substantial impact on a country like Bulgaria. As a net recipient of EU funding, Bulgaria is keenly aware of the economic importance of farm aid and of the political need for allies like France.
The Bulgarian agricultural industry has been designated 7.4 billion euros in the EU’s current 2014-2020 spending plan. The sector accounts for nearly 7 percent of the country’s jobs and more than 4 percent of its economy, almost three times the EU average. Grains are about a third of farm production in Bulgaria, the current holder of the 28-nation EU’s rotating six-month presidency.
“We received serious support, including from contributors like France, in our position to preserve this policy,” Liliana Pavlova, the Bulgarian minister in charge of the country’s EU presidency, said in Sofia on April 20.
The Bulgarian Government is currently receiving pressure from farming interest groups who insist that their government needs to show political courage in this potentially heated debate.
There is clearly trouble brewing in Brussels and the desire to boost security spending may end up creating a food fight that the EU wanted to avoid.
When Mr Oettinger hands down the statement tomorrow, it will be an interesting test to see how the EU handles division within its own bloc and how it handles political sensitivity. Despite what the EU says, it is a bloc terrified about the UK leaving as it now exposes division and tension within the trading bloc.