What kind of financial framework would help EU towards a genuine sustainability?

In my blog post from July 3I wrote about the reflection paper on the future of EU finances recently issued by the Commission. Out of five possible future scenarios the only one worth further discussion apperars to be the fourth one, so called “radical re-design”. This is however not really radical but just a bunch of small steps into more or less right direction. Therefore let us make one step futher and draft a proposal for financing real transition to sustainable Europe. This can be called scenario 4.1. “Financing sustainable Europe. Radical re-desing – really”. This blog is mostly about sustainable agriculture, therefore this part shall be drafted with slightly more detail.

General trend

1. Payments planned only for financing provision of public goods of European significance that are not sufficiently paid for by the markets.
2. Share of cohesion policy and common agricultural policy reduced.
3. Focus on future challenges for Europe.


Common agricultural policy
1. Direct payments in their present form, so called national envelopes and two-pillar structure of the policy abolished.
2. Focus on farmers providing public goods who would not survive on an open market without the subsidies (including when appropriate small farms and unfavourable areas).
3. Measures to decrease dependency of EU agriculture on mineral ferlisers, pesticides, fossil fuels and imported fodder.
4. Speeding up transition to circular economy, especially by means of increase in organic farming; support for transition to organic production, and if needed (not enough profitablity on the market) also to continued organic farming.
5. High nature value farming, especially management and restoration of semi-natural meadows and pastures secured on the scale needed for conservation of European biological and landscape diversity, with well-targeted support measures in place.
6. Genetic resources of European agriculture (plant varieties and animal breeds) efficiently conserved and sustably used, with necessary support made available.
7. Budget of agri-environment and -climate measures increased so as to make possible a palette of measures including both broad and more narrowly targeted measures.
8. Provision of same kind of public goods paid same support across EU unless clear differences in costs would occur, in which case the payment will be based on real costs.

Based on the experiences from LIFE programme sufficient funding for the environmental policy will be established.

Energy, industry and transport
Only projects with sufficent potential for significant EU-scale reduction of fossil fuel use and hence decrease of carbon dioxide emissions, and drive production towards circular economy will be supported.

1. Support for research helping to wean society from fossil fuels, mineral fertilisers as well as pesticides, biocides and other dangerous chemicals.
2. Support for research in conservation and sustainable use of biodiveristy.

Econimic, social and teeritorial cohesion
1. Support to poorer regions and cross-border cooperation.
2. Focus on social inclusion, employment, skills, innovation, climate change, energy and environmental transition.

New priorities
More efficient support for sustainable development globally, including in the source countries of migration.


1. Simplification of current system, including abolishing all rebates.
2. Establishing EU-wide environmental taxes on carbon dioxide, mineral nitrogen, taxes on most commonly used pesticides.
3. Introducing tax on international financial transaction if needed to finance EU priority expenditure.

An after-thought

Actually the proposed changes are not radical at all, they just constitute some common-sense ideas about stopping waste of money and starting financing activities necessary to secure our common future.

Post author: Aleksei Lotman


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