Reflecting on the future of EU finances. How much money will there be for CAP payments?

The Commission has recently issued a “reflection paper” (talking “eurospeak”) on the future of the EU finances. In spite of overall similarities to the style of the famous “Yes, minister”, especially the deliberation about the need to make provision for a strong EU civil service on page 23, there are parts in the document that can at least be used as the basis for further discussions.

Most important is the principle, long advocated by the civil society, that public money should be used to pay for public goods. Indeed, this is something that should form basis for any sound decision-making, so it is good it has finally been clearly spelled out in the Chapter 2 of the document.

This principle should be used consistently to eliminate all the spending without clear objectives, like the CAP Pillar I direct payments after 2020. Regrettably however the document falls short of its own stated principles and such a step is not even discussed; only reduction of the CAP direct payments is seen as a possible option. We need to be fully consistent in applying the principle of public payments for the public goods and that means eliminating the subisides that do not provide any.

Chapter 3 of the document looks at the results of the current spending but fails to analyse it systematically. CAP is presented as financing “sustainable agriculture” though we all know how far is current EU agriculture from true sustainability. It is important however that the extreme inequality of CAP support distribution is acknowledged in the document: 20% of the farms get 80% of the subsidies with the remaing 80% having to be content with 20% of the budget. This shows how hypocritic it is to use posters with pictures of small farms as justification of the CAP. Chapter 4 discusses the future of the policy areas, including the CAP but falls short of clear analysis and vision.

Chapter 5 presents possible scenarios for the future:

a) carrying on;

b) doing less together;

c) some do more;

d) radical redesign and

e) doing much more together.

Actually of course there is not much choise. Carrying on business as usual would be a slow suicide, doing less a bit quicker one. Simply doing (meaning: spending) more, a kind of bureaucratic dream, would be a disaster but is luckily simply impossible. Some doing more than others is what is to some extent already happening and will continue to be so, but making it the basic model would result in a dysfunctional system. Therefore the radical redesign is the only real option to consider.

Looking into the details of “radical redesign” presented in the document one cannot however avoid being dissappointed. This is “radical” in “Yes, minister” world, but in real terms it is just a bunch of very small steps in more or less right direction. For example, even in this “radical” scenario the CAP direct payments are only reduced, not abolished.

What we need is a real radical redesign. EU public money should be used for those and only those activities where it is the best way to achive public goods provision for Europe. We need a public debate to agree in public what kind of public goods do we need to provide with EU future finances.

Author: Aleksei Lotman